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Note H - Segment Information
 9 Months Ended
Mar. 31, 2016
Notes to Financial Statements  
Segment Reporting Disclosure [Text Block]
H. Segment Information
 
Our business consists of three segments for financial reporting purposes. The three segments are identified as (i) private label contract manufacturing, which primarily relates to the provision of private label contract manufacturing services to companies that market and distribute nutritional supplements and other health care products, (ii) patent and trademark licensing, which primarily includes direct raw material sales and royalty income from our license and supply agreements associated with the sale and use of beta-alanine under our CarnoSyn® trade name, (iii) branded products, which relates to the marketing and distribution of our branded nutritional supplements and consists primarily of the products sold under our Pathway to Healing® product line.
 
Due to the steady decline in sales of our Pathway to Healing® product line over the prior several years, we decided to discontinue the product line. Pursuant to the license agreements between NAI and each of Dr. Reginald Cherry and the Cherry Ministries Inc. dated as of September 1, 2004 as amended (the License Agreements). Dr. Cherry and Cherry Ministries licensed to NAI the name, likeness, style, persona and other attributes of Dr. Cherry in connection with the sale of nutritional products that were marketed by NAI under its Pathway to Healing brand. Pursuant to the License Agreements, NAI was permitted to terminate the License Agreements by written notice at any time. We notified Dr. Cherry and Cherry Ministries of our decision to discontinue the product line and the termination of the related license agreement was effective as of September 15, 2014. All termination activities related to the Pathway to Healing® product line were substantially completed by December 31, 2014. We did not change the financial presentation in this report to reflect the branded products segment as “Discontinued Operations” as the wind down of this product line did not meet the criteria for discontinued operations presentation as prescribed by applicable accounting regulations (ASC 205-20)
.
 
We evaluate performance based on a number of factors. The primary performance measures for each segment are net sales and income or loss from operations before corporate allocations. Operating income or loss for each segment does not include corporate general and administrative expenses, interest expense and other miscellaneous income and expense items. Corporate general and administrative expenses include, but are not limited to: human resources, corporate legal, finance, information technology, and other corporate level related expenses, which are not allocated to any segment. The accounting policies of our segments are the same as those described in Note A above and in the consolidated financial statements included in our 2015 Annual Report.
 
Our operating results by business segment were as follows (in thousands):
 
 
 
Three Months Ended
March
31,
 
 
Nine
Months Ended
March
31,
 
 
 
201
6
 
 
201
5
 
 
201
6
 
 
201
5
 
Net Sales
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Private label contract manufacturing
   $ 24,493     $ 17,322     $ 62,377     $ 51,519  
Patent and trademark licensing
     5,513       2,290       16,125       4,709  
Branded products
     —       1       —       698  
    $ 30,006     $ 19,613     $ 78,502     $ 56,926  
 
 
 
Three Months Ended
March
31,
 
 
Nine
Months Ended
March
31,
 
 
 
201
6
 
 
201
5
 
 
201
6
 
 
201
5
 
Income from Operations
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Private label contract manufacturing
   $ 2,915     $ 963     $ 7,518     $ 3,874  
Patent and trademark licensing
     1,750       1,355       4,440       2,720  
Branded products
     —       4       —       248  
Income from operations of reportable segments
     4,665       2,322       11,958       6,842  
Corporate expenses not allocated to segments
     (1,560 )     (1,283 )     (4,390 )     (3,853 )
    $ 3,105     $ 1,039     $ 7,568     $ 2,989  
 
 
 
 
March 31,
 
 
June 30,
 
 
 
201
6
 
 
201
5
 
Total Assets
 
 
 
 
 
 
 
 
Private label contract manufacturing
   $ 58,556     $ 50,313  
Patent and trademark licensing
     6,537       3,503  
Branded products
     —       —  
    $ 65,093     $ 53,816  
 
Our private label contract manufacturing products are sold both in the U.S. and in markets outside the U.S., including Europe, Canada, Mexico, Africa, Australia and Asia. Our primary market outside the U.S. is Europe. Our patent and trademark licensing activities are primarily based in the U.S. and our branded products were only sold in the U.S.
 
Net sales by geographic region, based on the customers’ location, were as follows (in thousands):
 
 
 
Three Months Ended
March 31,
 
 
Nine Months Ended
March 31,
 
 
 
2016
 
 
2015
 
 
2016
 
 
2015
 
Net Sales
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
United States
   $ 13,374     $ 11,857     $ 38,665     $ 30,941  
Markets outside the United States
     16,632       7,756       39,837       25,985  
                                 
    $ 30,006     $ 19,613     $ 78,502     $ 56,926  
 
Products manufactured by NAIE accounted for approximately 57% of net sales in markets outside the U.S. for the three months ended March 31, 2016 and 74% for the three months ended March 31, 2015. NAIE accounted for 67% of net sales in markets outside the U.S. for the nine months ended March 31, 2016 and 72% for the nine months ended March 31, 2015. No products manufactured by NAIE were sold in the U.S. during the nine months ended March 31, 2016 and 2015.
 
Assets and capital expenditures by geographic region, based on the location of the company or subsidiary at which they were located or made, were as follows (in thousands):
 
 
 
Long-Lived Assets
 
 
Total Assets
 
 
Capital Expenditures
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Nine
Months Ended
 
 
 
March
31,

201
6
 
 
June 30,
201
5
 
 
March
31,

201
6
 
 
June 30,
201
5
 
 
March 31,

2016
 
 
March
31,
201
5
 
United States
   $ 8,501     $ 5,525     $ 42,210     $ 34,988     $ 5,004     $ 956  
Europe
     3,575       2,108       22,883       18,828       1,955       406  
    $ 12,076     $ 7,633     $ 65,093     $ 53,816     $ 6,959     $ 1,362