Note N - Segment Information

12 Months Ended

Jun. 30, 2022

Notes to Financial Statements

Segment Reporting Disclosure [Text Block]

N. Segment Information

Our business consists of two segments for financial reporting purposes. The two segments are identified as (i) private-label contract manufacturing, which primarily relates to the provision of private-label contract manufacturing services to companies that market and distribute nutritional supplements and other health care products, and (ii) patent and trademark licensing, which primarily includes direct raw material sales and royalty income from our license and supply agreements associated with the sale and use of beta-alanine under our CarnoSyn® and SR CarnoSyn® trade names.

We evaluate performance based on a number of factors. The primary performance measures for each segment are net sales and income or loss from operations before corporate allocations. Operating income or loss for each segment does not include corporate general and administrative expenses, interest expense and other miscellaneous income and expense items. Corporate general and administrative expenses include, but are not limited to human resources, corporate legal, finance, information technology, and other corporate level related expenses, which are not allocated to any segment. Transfers of raw materials between segments are recorded at cost. The accounting policies of our segments are the same as those described in the summary of significant accounting policies in Note A.

Our operating results by business segment for the years ended June 30 were as follows (in thousands):

	2022		2021
Net Sales
Private-label contract manufacturing	$	154,798	$	164,310
Patent and trademark licensing		16,168		14,210
	$	170,966	$	178,520

	2022			2021
Income from Operations
Private-label contract manufacturing	$	15,667		$	17,744
Patent and trademark licensing		6,780			4,442
Income from operations of reportable segments		22,447			22,186
Corporate expenses not allocated to segments		(8,768	)		(8,514	)
	$	13,679		$	13,672

	2022		2021
Assets
Private-label contract manufacturing	$	115,649	$	95,324
Patent and trademark licensing		30,354		24,957
	$	146,003	$	120,281

Our private-label contract manufacturing products are sold both in the U.S. and in markets outside the U.S., including Europe, Canada, Australia, New Zealand, Mexico and Asia. Our primary markets outside the U.S. are Europe and Asia. Our patent and trademark licensing activities are primarily based in the U.S.

Net sales by geographic region, based on the customers’ location, for the two years ended June 30 were as follows (in thousands):

	2022		2021
United States	$	115,255	$	94,702
Markets outside the United States		55,711		83,818
Total net sales	$	170,966	$	178,520

Products manufactured by NAIE accounted for 84% of consolidated net sales in markets outside the U.S. in fiscal 2022 and 77% in fiscal 2021. No products manufactured by NAIE were sold in the U.S. during the fiscal years ended June 30, 2022 and 2021.

Long-lived assets by geographic region, based on the location of the company or subsidiary at which they were located or made, for the two years ended June 30 were as follows (in thousands):

	2022		2021
United States	$	43,769	$	21,109
Europe		22,505		17,039
Total Long-Lived Assets	$	66,274	$	38,148

Total assets by geographic region, based on the location of the company or subsidiary at which they were located or made, for the two years ended June 30 were as follows (in thousands):

	2022		2021
United States	$	83,443	$	67,307
Europe		62,560		52,974
Total Assets	$	146,003	$	120,281

Capital expenditures by geographic region, based on the location of the company or subsidiary at which they were located or made, for the two years ended June 30 were as follows (in thousands):

	2022		2021
United States	$	25,383	$	2,336
Europe		1,105		2,771
Total Capital Expenditures	$	26,488	$	5,107