Note 11 - Segment Information

6 Months Ended

Jun. 30, 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 June 30,						Six Months Ended June 30,
	2021			2020			2021			2020
Net sales:
Primary Reporting Segment	$	15,333		$	15,416		$	28,103		$	29,424
China		587			818			1,095			1,516
Russia and Kazakhstan		232			170			423			412
Total net sales	$	16,152		$	16,404		$	29,621		$	31,352
Income from operations:
Primary Reporting Segment	$	2,546		$	2,008		$	5,245		$	3,323
China		53			13			46			(70	)
Russia and Kazakhstan		(58	)		104			(106	)		22
Income from operations for reportable segments, net		2,541			2,125			5,185			3,275
Unallocated corporate expenses		(2,156	)		(1,942	)		(4,580	)		(4,540	)
Other income (expense), net		(59	)		125			(39	)		218
Income (loss) before income taxes	$	326		$	308		$	566		$	(1,047	)

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

	Three Months Ended June 30,				Six Months Ended June 30,
	2021		2020		2021		2020
Net sales from external customers:
United States	$	328	$	372	$	639	$	863
Canada		170		143		341		404
Peru		628		238		1,144		598
Hong Kong1		12,704		13,693		23,026		25,106
China		587		818		1,095		1,516
Taiwan		715		550		1,406		1,490
South Korea		83		41		151		168
Russia and Kazakhstan		232		170		423		412
Europe		261		255		611		488
Other foreign countries		444		124		785		307
Total net sales	$	16,152	$	16,404	$	29,621	$	31,352

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.