Segment Information

12 Months Ended

Dec. 31, 2017

Segment Reporting [Abstract]

Segment Information

SEGMENT INFORMATION

The Company sells products to a member network that operates in a seamless manner from market to market, except for the China market where it sells to consumers through an e-commerce platform, and the Russia and Kazakhstan market where the Company’s engagement of a third-party service provider results in a different economic structure than its other markets. Otherwise, the Company believes that all of its other operating segments have similar economic characteristics and are similar in the nature of the products sold, the product acquisition process, the types of customers products are sold to, the methods used to distribute the products, and the nature of the regulatory environment.

There is no separate segment manager who is held accountable by the Company’s chief operating decision-makers, or anyone else, for operations, operating results and planning for the China market or the Russia and Kazakhstan market on a stand-alone basis, and neither market is material for the periods presented. As such, the Company believes that all operating segments should be aggregated into a single reportable segment for disclosure purposes.

The Company’s net sales by geographic area are as follows (in thousands):

	Year Ended December 31,
	2017		2016		2015
Net sales from external customers:
United States	$	3,348	$	4,100	$	3,246
Canada	1,938		1,809		2,746
Peru	508		—		—
Hong Kong1	174,926		263,482		245,737
China	7,282		9,086		4,425
Taiwan	5,591		6,213		5,965
South Korea	466		691		1,129
Russia, Kazakhstan and Ukraine2	913		858		1,139
Europe	2,278		1,234		382
Other foreign countries	313		255		91
Total net sales	$	197,563	$	287,728	$	264,860

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¹ Substantially all of our Hong Kong revenues are derived from the sale of products that are delivered to members in China. See “Item 1A. Risk Factors”.

² The Company discontinued its Ukraine operations during the second quarter of 2015.

The Company’s net sales by product and service are as follows (in thousands):

	Year Ended December 31,
	2017			2016			2015
Net sales by product and service:
Product sales	$	187,591		$	269,731		$	253,041
Enrollment package revenue, freight and other	13,676			25,616			17,623
Less: sales returns	(3,704		)	(7,619		)	(5,804		)
Total net sales	$	197,563		$	287,728		$	264,860

Due to system constraints, it is impracticable for the Company to separately disclose sales by product category for the years presented.

The Company’s long-lived assets by geographic area are as follows (in thousands):

	December 31,
	2017		2016
Long-lived assets:
United States	$	648	$	763
Hong Kong	78		140
China	112		199
Other foreign countries	311		286
Total long-lived assets	$	1,149	$	1,388