Note H - Segment Information

3 Months Ended

Sep. 30, 2022

Notes to Financial Statements

Segment Reporting Disclosure [Text Block]

H. 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 of these segments based on a number of factors. The primary performance measures for each segment are net sales and income or loss from operations before the allocation of certain corporate level expenses. 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 above and in the consolidated financial statements included in our 2022 Annual Report.

Our operating results by business segment were as follows (in thousands):

	Three Months Ended September 30,
	2022		2021
Net Sales
Private-label contract manufacturing	$	41,776	$	33,594
Patent and trademark licensing		1,351		4,746
Total Net Sales	$	43,127	$	38,340

	Three Months Ended September 30,
	2022			2021
Income from Operations
Private-label contract manufacturing	$	3,244		$	3,700
Patent and trademark licensing		347			2,636
Income from operations of reportable segments		3,591			6,366
Corporate expenses not allocated to segments		(2,049	)		(2,108	)
Total Income from Operations	$	1,542		$	4,228

	September 30, 2022		June 30, 2022
Total Assets
Private-label contract manufacturing	$	120,263	$	115,649
Patent and trademark licensing		29,305		30,354
	$	149,568	$	146,003

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, were as follows (in thousands):

	Three Months Ended September 30,
	2022		2021
United States	$	29,832	$	23,495
Markets outside of the United States		13,295		14,845
Total	$	43,127	$	38,340

Products manufactured by our Swiss subsidiary ("NAIE") accounted for 77% of net sales in markets outside the U.S. for the three months ended September 30, 2022. Products manufactured by our Swiss subsidiary ("NAIE") accounted for 80% of net sales in markets outside the U.S. for the three months ended September 30, 2021. No products manufactured by NAIE were sold in U.S. markets during the three month periods ended September 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, were as follows (in thousands):

	September 30, 2022		June 30, 2022
United States	$	50,732	$	43,769
Europe		21,788		22,505
Total Long-Lived Assets	$	72,520	$	66,274

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

	September 30, 2022		June 30, 2022
United States	$	93,248	$	83,443
Europe		56,320		62,560
Total Assets	$	149,568	$	146,003

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

	Three Months Ended September 30,
	2022		2021
United States	$	7,720	$	18,201
Europe		47		143
Total Capital Expenditures	$	7,767	$	18,344