SEGMENT INFORMATION

3 Months Ended

Mar. 31, 2020

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 some 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. Therefore, the Company aggregates its other operating segments into a single reporting segment (the “Primary Reporting Segment”).

The Company reviews its net sales and operating income (loss) by operating segment, and reviews its assets and capital expenditures on a consolidated basis and not by operating segment. As such, net sales and operating income (loss) are presented by reportable segment and assets and capital expenditures by operating segment are not presented. Segment operating income (loss) is adjusted for certain direct costs and commission allocation.

The Company’s operating information by geographic area are as follows (in thousands):

	Three Months Ended March 31,
	2020		2019
Net sales:
Primary Reporting Segment	$	14,008	$	18,054
China	698		1,056
Russia and Kazakhstan	242		218
Total net sales	$	14,948	$	19,328

Income (loss) from operations:
Primary Reporting Segment	$	1,315	$	822
China	(83)		(311)
Russia and Kazakhstan	(82)		(25)
Total income from operations for reportable segments	1,150		486
Unallocated corporate expenses	(2,598)		(3,195)
Other income, net	93		432
Loss before income taxes	$	(1,355)	$	(2,277)

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

	Three Months Ended March 31,
	2020		2019
Net sales from external customers:
United States	$	491	$	541
Canada	261		286
Peru	360		688
Hong Kong1	11,413		15,366
China	698		1,056
Taiwan	940		634
South Korea	127		106
Russia and Kazakhstan	242		218
Europe	233		343
Other foreign countries	183		90
Total net sales	$	14,948	$	19,328

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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” in this report and in our most recent Annual Report on Form 10-K.