Note 11 - Segment Information

3 Months Ended

Mar. 31, 2021

Notes to Financial Statements

Segment Reporting Disclosure [Text Block]

11.    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 March 31,
	2021			2020
Net sales:
Primary Reporting Segment	$	12,770		$	14,008
China		508			698
Russia and Kazakhstan		191			242
Total net sales	$	13,469		$	14,948
Income (loss) from operations:
Primary Reporting Segment	$	2,699		$	1,315
China		(7	)		(83	)
Russia and Kazakhstan		(48	)		(82	)
Total income (loss) from operations for reportable segments		2,644			1,150
Unallocated corporate expenses		(2,424	)		(2,598	)
Other income, net		20			93
Income (loss) before income taxes	$	240		$	(1,355	)

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

	Three Months Ended March 31,
	2021		2020
Net sales from external customers:
United States	$	311	$	491
Canada		171		261
Peru		516		360
Hong Kong1		10,322		11,413
China		508		698
Taiwan		691		940
South Korea		68		127
Russia and Kazakhstan		191		242
Europe		350		233
Other foreign countries		341		183
Total net sales	$	13,469	$	14,948

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.