Note 10 - Segment Information

9 Months Ended

Sep. 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 September 30,						Nine Months Ended September 30,
	2020			2019			2020			2019
Net sales:
Primary Reporting Segment	$	13,294		$	16,254		$	42,718		$	56,979
China		640			525			2,156			2,138
Russia and Kazakhstan		190			244			602			662
Total net sales	$	14,124		$	17,023		$	45,476		$	59,779
Income (loss) from operations:
Primary Reporting Segment	$	2,715		$	2,974		$	6,038		$	7,506
China		134			(795	)		64			(1,530	)
Russia and Kazakhstan		(59	)		(82	)		(37	)		(138	)
Total income from operations for reportable segments		2,790			2,097			6,065			5,838
Unallocated corporate expenses		(2,122	)		(3,161	)		(6,662	)		(9,615	)
Other income, net		385			323			603			1,128
Income (loss) before income taxes	$	1,053		$	(741	)	$	6		$	(2,649	)

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

	Three Months Ended September 30,				Nine Months Ended September 30,
	2020		2019		2020		2019
Net sales from external customers:
United States	$	338	$	551	$	1,202	$	1,607
Canada		132		313		536		808
Peru		357		581		954		1,938
Hong Kong1		11,132		13,575		36,238		48,465
China		640		525		2,156		2,138
Taiwan		771		649		2,261		2,340
South Korea		52		98		220		288
Russia and Kazakhstan		190		244		602		662
Europe		259		343		747		1,017
Other foreign countries		253		144		560		516
Total net sales	$	14,124	$	17,023	$	45,476	$	59,779

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.