Note 10 - Segment Information

6 Months Ended

Jun. 30, 2020

Notes to Financial Statements

Segment Reporting Disclosure [Text Block]

10.    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 (including its Hong Kong operating segment) 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 June 30,						Six Months Ended June 30,
	2020			2019			2020			2019
Net sales:
Primary Reporting Segment	$	15,416		$	22,671		$	29,424		$	40,725
China		818			557			1,516			1,613
Russia and Kazakhstan		170			200			412			418
Total net sales	$	16,404		$	23,428		$	31,352		$	42,756
Income (loss) from operations:
Primary Reporting Segment	$	2,008		$	3,710		$	3,323		$	4,532
China		13			(424	)		(70	)		(735	)
Russia and Kazakhstan		104			(31	)		22			(56	)
Total income from operations for reportable segments		2,125			3,255			3,275			3,741
Unallocated corporate expenses		(1,942	)		(3,259	)		(4,540	)		(6,454	)
Other income, net		125			373			218			805
Income (loss) before income taxes	$	308		$	369		$	(1,047	)	$	(1,908	)

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

	Three Months Ended June 30,				Six Months Ended June 30,
	2020		2019		2020		2019
Net sales from external customers:
United States	$	372	$	514	$	863	$	1,055
Canada		143		210		404		496
Peru		238		669		598		1,357
Hong Kong1		13,693		19,524		25,106		34,890
China		818		557		1,516		1,613
Taiwan		550		1,057		1,490		1,691
South Korea		41		84		168		190
Russia and Kazakhstan		170		200		412		418
Europe		255		331		488		674
Other foreign countries		124		282		307		372
Total net sales	$	16,404	$	23,428	$	31,352	$	42,756

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.