Note 13 - Segment Information

12 Months Ended

Dec. 31, 2021

Notes to Financial Statements

Segment Reporting Disclosure [Text Block]

13.    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 retail 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 is adjusted for certain direct costs and commission allocation.

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

	Year Ended December 31,
	2021			2020
Net sales:
Primary Reporting Segment	$	56,914		$	58,243
China		2,237			2,940
Russia and Kazakhstan		854			888
Total net sales	$	60,005		$	62,071
Income (loss) from operations:
Primary Reporting Segment	$	10,366		$	9,277
China		74			330
Russia and Kazakhstan		(146	)		(96	)
Income from operations for reportable segments, net		10,294			9,511
Unallocated corporate expenses		(8,723	)		(8,842	)
Other income (expense), net		(61	)		821
Income before income taxes	$	1,510		$	1,490

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

	Year Ended December 31,
	2021		2020
Net sales from external customers:
United States	$	1,278	$	1,573
Canada		724		765
Peru		2,281		1,453
Hong Kong1		46,699		49,169
China		2,237		2,940
Taiwan		2,706		3,034
Russia and Kazakhstan		854		888
Europe		1,136		1,050
Other foreign countries		2,090		1,199
Total net sales	$	60,005	$	62,071

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.”

The Company’s net sales by product and service are as follows (in thousands):

	Year Ended December 31,
	2021			2020
Net sales by product and service:
Product sales	$	54,056		$	55,840
Administrative fees, freight and other		6,340			6,991
Less: sales returns		(391	)		(760	)
Total net sales	$	60,005		$	62,071

Due to system constraints, it is impracticable for the Company to separately disclose sales by product category for the years presented.

The Company’s long-lived assets by geographic area are as follows (in thousands):

	December 31,
	2021		2020
Long-lived assets:
United States	$	221	$	227
Hong Kong		105		146
China		90		47
Other foreign countries		47		119
Total long-lived assets	$	463	$	539