Note 11 - Segment Information

9 Months Ended

Sep. 30, 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 September 30,						Nine Months Ended September 30,
	2022			2021			2022			2021
Net sales:
Primary Reporting Segment	$	11,241		$	13,576		$	34,888		$	41,679
China		346			501			1,313			1,596
Russia and Kazakhstan		129			199			421			622
Total net sales	$	11,716		$	14,276		$	36,622		$	43,897
Income (loss) from operations:
Primary Reporting Segment	$	1,967		$	2,558		$	6,124		$	7,803
China		(71	)		5			(86	)		51
Russia and Kazakhstan		(36	)		5			(132	)		(101	)
Income from operations for reportable segments, net		1,860			2,568			5,906			7,753
Unallocated corporate expenses		(2,005	)		(2,089	)		(6,219	)		(6,669	)
Other income (expense), net		187			(53	)		472			(92	)
Income before income taxes	$	42		$	426		$	159		$	992

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

	Three Months Ended September 30,				Nine Months Ended September 30,
	2022		2021		2022		2021
Net sales from external customers:
United States	$	332	$	279	$	860	$	918
Canada		149		140		450		481
Peru		290		608		1,099		1,752
Hong Kong1		9,424		11,201		28,916		34,227
China		346		501		1,313		1,596
Taiwan		482		584		1,675		1,990
Japan		157		204		528		540
Malaysia and Singapore		96		120		316		326
Russia and Kazakhstan		129		199		421		622
Europe		188		258		693		869
Other foreign countries		123		182		351		576
Total net sales	$	11,716	$	14,276	$	36,622	$	43,897

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.