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OPERATING BUSINESS SEGMENT AND INTERNATIONAL OPERATION INFORMATION | 12 Months Ended
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Dec. 31, 2012
OPERATING BUSINESS SEGMENT AND INTERNATIONAL OPERATION INFORMATION |
OPERATING BUSINESS SEGMENT AND INTERNATIONAL OPERATION INFORMATION | NOTE 15: OPERATING BUSINESS SEGMENT AND INTERNATIONAL OPERATION INFORMATION The Company has three business segments. These business segments are components of the Company for which separate information is available that is evaluated regularly by the chief executive officer in deciding how to allocate resources and in assessing relative performance. The Company has two business segments that operate under the Nature’s Sunshine Products brand and are divided based on the characteristics of their Distributor base, similarities in compensation plans, as well as the internal organization of NSP’s officers and their responsibilities (NSP Americas, Asia Pacific and Europe; and NSP Russia, Central and Eastern Europe). The Company’s third business segment operates under the Synergy WorldWide brand, which distributes its products through different marketing and Distributor compensation plans and products with formulations that are sufficiently different from those of the NSP Americas, Asia Pacific and Europe; and NSP Russia, Central and Eastern Europe to warrant accounting for these operations as a separate business segment. Net sales revenues for each segment have been reduced by intercompany sales as they are not included in the measure of segment profit or loss reviewed by the chief executive officer. The Company evaluates performance based on contribution margin (loss) by segment before consideration of certain inter-segment transfers and expenses. Historically, the Company had reported its two business segments that operate under the Nature’s Sunshine Products brand based upon their geographic operations in the United States (NSP United States) and in the countries outside the United States (NSP International). This was how the Company was regularly evaluated by the chief executive officer and executive team. During 2012, the Company engaged in a reorganization process in which the business segments, the roles of upper management responsible for the operating segments, and the information provided to the chief operating decision maker were reevaluated. As a result of the reorganization process, the two historical NSP segments (NSP United States and NSP International), which were previously separated based on geographical operations, were divided into two different identifiable segments (NSP Americas, Asia Pacific and Europe; and NSP Russia, Central and Eastern Europe) based on the nature of the business activities of each segment, the existence of Managers responsible for them, and information presented to the chief operating decision maker. The two new segments distribute products in differing ways in that NSP Americas, Asia Pacific and Europe sells products through a mixture of retailing, practitioners and direct selling while NSP Russia, Central and Eastern Europe’s business model is more oriented to a network marketing approach. The chief operating decision maker now reviews the operating results of the two new NSP segments. The new NSP segments also conform to the revised internal management structure. There was no change to the Synergy WorldWide segment. The presentation of the comparative information has been revised to conform to the 2012 presentation. Reportable business segment information for the years ended December 31, 2012, 2011 and 2010 is as follows:
Year Ended December 31, |  | 2012 |  | 2011 |  | 2010 |
Net sales revenue: |  |  |  |  |  |  |
NSP Americas, Asia Pacific and Europe |  | $ | 208,945 |  | $ | 216,912 |  | $ | 225,213 |
NSP Russia, Central and Eastern Europe |  | 57,853 |  | 56,986 |  | 56,141 |
Synergy WorldWide |  | 100,670 |  | 93,915 |  | 68,564 |
Total net sales revenue |  | 367,468 |  | 367,813 |  | 349,918 |
Contribution margin (1): |  |  |  |  |  |  |
NSP Americas, Asia Pacific and Europe |  | 82,778 |  | 86,004 |  | 86,570 |
NSP Russia, Central and Eastern Europe |  | 21,957 |  | 22,374 |  | 20,755 |
Synergy WorldWide |  | 36,142 |  | 36,143 |  | 22,962 |
Total contribution margin |  | 140,877 |  | 144,521 |  | 130,287 |
Selling, general and administrative |  | 106,861 |  | 109,606 |  | 119,024 |
Contract termination costs |  | — |  | 14,750 |  | — |
Operating income |  | 34,016 |  | 20,165 |  | 11,263 |
Other income, net |  | 1,480 |  | 1,847 |  | 2,727 |
Income before provision for income taxes |  | $ | 35,496 |  | $ | 22,012 |  | $ | 13,990 |
(1) Contribution margin consists of net sales revenue less cost of sales and volume incentives expense.
Year Ended December 31, |  | 2012 |  | 2011 |  | 2010 |
Capital expenditures: |  |  |  |  |  |  |
NSP Americas, Asia Pacific and Europe |  | $ | 5,684 |  | $ | 993 |  | $ | 1,898 |
NSP Russia, Central and Eastern Europe |  | 44 |  | 66 |  | — |
Synergy WorldWide |  | 1,051 |  | 1,183 |  | 779 |
Total capital expenditures |  | $ | 6,779 |  | $ | 2,242 |  | $ | 2,677 |
Depreciation and amortization: |  |  |  |  |  |  |
NSP Americas, Asia Pacific and Europe |  | $ | 3,339 |  | $ | 3,827 |  | $ | 3,721 |
NSP Russia, Central and Eastern Europe |  | 36 |  | 43 |  | 23 |
Synergy WorldWide |  | 703 |  | 492 |  | 510 |
Total depreciation and amortization |  | $ | 4,078 |  | $ | 4,362 |  | $ | 4,254 |
As of December 31, |  | 2012 |  | 2011 |
Assets: |  |  |  |  |
NSP Americas, Asia Pacific and Europe |  | $ | 136,237 |  | $ | 124,483 |
NSP Russia, Central and Eastern Europe |  | 8,558 |  | 9,030 |
Synergy WorldWide |  | 49,124 |  | 42,298 |
Total assets |  | $ | 193,919 |  | $ | 175,811 |
From an individual country perspective, only the United States comprises approximately 10 percent or more of consolidated net sales revenue for any of the years ended December 31, 2012, 2011 and 2010 as follows:
Year Ended December 31, |  | 2012 |  | 2011 |  | 2010 |
Net sales revenue: |  |  |  |  |  |  |
United States |  | $ | 154,716 |  | $ | 159,471 |  | $ | 156,767 |
Other |  | 212,752 |  | 208,342 |  | 193,151 |
Total net sales revenue |  | $ | 367,468 |  | $ | 367,813 |  | $ | 349,918 |
Revenue generated by each of the Company’s product lines is set forth below (U.S. dollars in thousands):
Year Ended December 31, |  | 2012 |  | 2011 |  | 2010 |
NSP Americas, Asia Pacific and Europe: |  |  |  |  |  |  |
Herbal Products |  | $ | 118,211 |  | $ | 121,907 |  | $ | 118,531 |
Vitamins and Mineral and Other Nutritional Supplements |  | 80,567 |  | 81,974 |  | 91,852 |
Personal Care Products |  | 6,150 |  | 7,503 |  | 7,924 |
Other Products |  | 4,017 |  | 5,528 |  | 6,906 |
|  | 208,945 |  | 216,912 |  | 225,213 |
NSP Russia, Central and Eastern Europe: |  |  |  |  |  |  |
Herbal Products |  | $ | 25,311 |  | $ | 25,120 |  | $ | 26,867 |
Vitamins and Mineral and Other Nutritional Supplements |  | 26,147 |  | 24,202 |  | 24,416 |
Personal Care Products |  | 6,203 |  | 7,479 |  | 4,638 |
Other Products |  | 192 |  | 185 |  | 220 |
|  | 57,853 |  | 56,986 |  | 56,141 |
Synergy WorldWide: |  |  |  |  |  |  |
Herbal Products |  | $ | 39,607 |  | $ | 33,563 |  | $ | 28,045 |
Vitamins and Mineral and Other Nutritional Supplements |  | 54,128 |  | 50,936 |  | 32,296 |
Personal Care Products |  | 5,350 |  | 7,526 |  | 6,542 |
Other Products |  | 1,585 |  | 1,890 |  | 1,681 |
|  | 100,670 |  | 93,915 |  | 68,564 |
Total net sales revenue |  | $ | 367,468 |  | $ | 367,813 |  | $ | 349,918 |
From an individual country perspective, only the United States and Venezuela comprise 10 percent or more of consolidated property, plant and equipment as follows:
As of December 31 |  | 2012 |  | 2011 |
Property, plant and equipment |  |  |  |  |
United States |  | $ | 20,923 |  | $ | 18,119 |
Venezuela |  | 3,535 |  | 3,939 |
Other |  | 3,492 |  | 3,079 |
Total property, plant and equipment |  | $ | 27,950 |  | $ | 25,137 |

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- Definition The entire disclosure for reporting segments including data and tables. Reportable segments include those that meet any of the following quantitative thresholds a) it's reported revenue, including sales to external customers and intersegment sales or transfers is 10 percent or more of the combined revenue, internal and external, of all operating segments b) the absolute amount of its reported profit or loss is 10 percent or more of the greater, in absolute amount of 1) the combined reported profit of all operating segments that did not report a loss or 2) the combined reported loss of all operating segments that did report a loss c) its assets are 10 percent or more of the combined assets of all operating segments. + References Reference 1: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 29 -URI http://asc.fasb.org/extlink&oid=6534315&loc=d3e8864-108599 Reference 2: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 30 -URI http://asc.fasb.org/extlink&oid=6534315&loc=d3e8906-108599 Reference 3: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 32 -URI http://asc.fasb.org/extlink&oid=6534315&loc=d3e8933-108599 Reference 4: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 35 -URI http://asc.fasb.org/extlink&oid=6534315&loc=d3e8984-108599 Reference 5: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 1 -URI http://asc.fasb.org/extlink&oid=6534315&loc=d3e8380-108599 Reference 6: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 10 -URI http://asc.fasb.org/extlink&oid=6534315&loc=d3e8538-108599 Reference 7: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 42 -URI http://asc.fasb.org/extlink&oid=6534315&loc=d3e9054-108599 Reference 8: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 12 -URI http://asc.fasb.org/extlink&oid=6534315&loc=d3e8595-108599 Reference 9: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Statement of Financial Accounting Standard (FAS) -Number 131 -LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy. Reference 10: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 34 -URI http://asc.fasb.org/extlink&oid=6534315&loc=d3e8981-108599 Reference 11: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 33 -URI http://asc.fasb.org/extlink&oid=6534315&loc=d3e8971-108599 Reference 12: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 26 -URI http://asc.fasb.org/extlink&oid=6534315&loc=d3e8844-108599 Reference 13: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 31 -URI http://asc.fasb.org/extlink&oid=6534315&loc=d3e8924-108599 Reference 14: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 40 -URI http://asc.fasb.org/extlink&oid=6534315&loc=d3e9031-108599 Reference 15: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 41 -URI http://asc.fasb.org/extlink&oid=6534315&loc=d3e9038-108599 + Details
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