Note 11 - Segment Information

3 Months Ended

Mar. 31, 2022

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 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,
	2022			2021
Net sales:
Primary Reporting Segment	$	10,877		$	12,770
China		481			508
Russia and Kazakhstan		188			191
Total net sales	$	11,546		$	13,469
Income (loss) from operations:
Primary Reporting Segment	$	1,915		$	2,699
China		8			(7	)
Russia and Kazakhstan		(47	)		(48	)
Income from operations for reportable segments, net		1,876			2,644
Unallocated corporate expenses		(2,259	)		(2,424	)
Other income, net		110			20
Income (loss) before income taxes	$	(273	)	$	240

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

	Three Months Ended March 31,
	2022		2021
Net sales from external customers:
United States	$	256	$	311
Canada		137		171
Peru		482		516
Hong Kong1		8,776		10,322
China		481		508
Taiwan		569		691
Japan		235		149
Malaysia and Singapore		125		75
Russia and Kazakhstan		188		191
Europe		201		350
Other foreign countries		96		185
Total net sales	$	11,546	$	13,469

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.