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Note H - Segment Information
6 Months Ended
Dec. 31, 2023
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 2023 Annual Report.

 

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

 

  

Three Months Ended

  

Six Months Ended

 
  

December 31,

  

December 31,

 
  

2023

  

2022

  

2023

  

2022

 

Net Sales

                

Private-label contract manufacturing

 $23,050  $40,839  $55,239  $82,615 

Patent and trademark licensing

  2,152   1,456   3,932   2,807 

Total Net Sales

 $25,202  $42,295  $59,171  $85,422 

 

  

Three Months Ended

  

Six Months Ended

 
  

December 31,

  

December 31,

 
  

2023

  

2022

  

2023

  

2022

 

(Loss) Income from Operations

                

Private-label contract manufacturing

 $(2,368) $4,266  $(1,360) $7,510 

Patent and trademark licensing

  947   347  $1,391   694 

(Loss) income from operations of reportable segments

  (1,421)  4,613  $31   8,204 

Corporate expenses not allocated to segments

  (2,092)  (2,128) $(4,088)  (4,177)

Total (Loss) Income from Operations

 $(3,513) $2,485  $(4,057) $4,027 

 

  

December 31,

  

June 30,

 
  

2023

  

2023

 

Total Assets

        

Private-label contract manufacturing

 $122,934  $102,495 

Patent and trademark licensing

  32,799   31,657 
  $155,733  $134,152 

 

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

  

Six Months Ended

 
  

December 31,

  

December 31,

 
  

2023

  

2022

  

2023

  

2022

 
                 

United States

 $16,585  $28,908  $41,533  $58,740 

Markets outside of the United States

  8,617   13,387   17,638   26,682 

Total

 $25,202  $42,295  $59,171  $85,422 

 

Products manufactured by our Swiss subsidiary ("NAIE") accounted for 70% of net sales in markets outside the U.S. for the three months ended December 31, 2023, and 80% for the six months ended December 31, 2023. Products manufactured by our Swiss subsidiary ("NAIE") accounted for 73% of net sales in markets outside the U.S. for the three months ended December 31, 2022, and 75% for the six months ended December 31, 2022.

 

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):

 

  

December 31, 2023

  

June 30, 2023

 

United States

 $79,028  $53,536 

Europe

  19,173   20,674 

Total Long-Lived Assets

 $98,201  $74,210 

 

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):

 

  

December 31, 2023

  

June 30, 2023

 

United States

 $111,799  $89,167 

Europe

  43,934   44,985 

Total Assets

 $155,733  $134,152 

 

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):

 

  

Six Months Ended

 
  

December 31,

 
  

2023

  

2022

 

United States

 $1,617  $11,486 

Europe

  90   154 

Total Capital Expenditures

 $1,707  $11,640