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Note 11 - Segment Information
 9 Months Ended
Sep. 30, 2024
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,

 
  

2024

  

2023

  

2024

  

2023

 

Net sales:

                

Primary Reporting Segment

 $9,951  $10,249  $30,440  $31,719 

China

  601   254   1,321   917 

Russia and Kazakhstan

  139   112   356   351 

Total net sales

 $10,691  $10,615  $32,117  $32,987 
                 

Income (loss) from operations:

                

Primary Reporting Segment

 $1,511  $1,880  $4,847  $5,208 

China

  160   (160)  (10)  (423)

Russia and Kazakhstan

  (31)  (47)  (88)  (131)

Income from operations for reportable segments, net

  1,640   1,673   4,749   4,654 

Unallocated corporate expenses

  (1,915)  (1,965)  (5,627)  (6,083)

Other income, net

  441   585   1,523   1,708 

Income before income taxes

 $166  $293  $645  $279 

 

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

 

  

Three Months Ended September 30,

  

Nine Months Ended September 30,

 
  

2024

  

2023

  

2024

  

2023

 

Net sales from external customers:

                

United States

 $274  $276  $799  $827 

Canada

  134   180   387   507 

Peru

  340   365   844   1,175 

Hong Kong1

  8,356   8,412   25,998   26,391 

China

  601   254   1,321   917 

Taiwan

  454   552   1,277   1,460 

Japan

  81   152   202   341 

Malaysia and Singapore

  58   54   177   207 

Russia and Kazakhstan

  139   112   356   351 

Europe

  164   182   473   567 

Other foreign countries

  90   76   283   244 

Total net sales

 $10,691  $10,615  $32,117  $32,987 

 

1 Substantially all of the Company's 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.