Note 11 - Segment Information

9 Months Ended

Sep. 30, 2023

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,
	2023			2022			2023			2022
Net sales:
Primary Reporting Segment	$	10,249		$	11,241		$	31,719		$	34,888
China		254			346			917			1,313
Russia and Kazakhstan		112			129			351			421
Total net sales	$	10,615		$	11,716		$	32,987		$	36,622
Income (loss) from operations:
Primary Reporting Segment	$	1,880		$	1,967		$	5,208		$	6,124
China		(160	)		(71	)		(423	)		(86	)
Russia and Kazakhstan		(47	)		(36	)		(131	)		(132	)
Income from operations for reportable segments, net		1,673			1,860			4,654			5,906
Unallocated corporate expenses		(1,965	)		(2,005	)		(6,083	)		(6,219	)
Other income, net		585			187			1,708			472
Income before income taxes	$	293		$	42		$	279		$	159

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

	Three Months Ended September 30,				Nine Months Ended September 30,
	2023		2022		2023		2022
Net sales from external customers:
United States	$	276	$	332	$	827	$	860
Canada		180		149		507		450
Peru		365		290		1,175		1,099
Hong Kong1		8,412		9,424		26,391		28,916
China		254		346		917		1,313
Taiwan		552		482		1,460		1,675
Japan		152		157		341		528
Malaysia and Singapore		54		96		207		316
Russia and Kazakhstan		112		129		351		421
Europe		182		188		567		693
Other foreign countries		76		123		244		351
Total net sales	$	10,615	$	11,716	$	32,987	$	36,622

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 our most recent Annual Report on Form 10-K.