G. Segment Information

Our business consists of

two

segments for financial reporting purposes. The

two

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, and (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® and SR CarnoSyn® trade names.

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. Transfers of raw materials between segments are recorded at cost. The accounting policies of our segments are the same as those described in the summary of significant accounting policies in Note A above and in the consolidated financial statements included in our

2018

Annual Report.

Our operating results by business segment were as follows (in thousands):

	Three months Ended September 30,
	2018		201 7
Net Sales
Private-label contract manufacturing	$	31,087	$	22,222
Patent and trademark licensing		5,445		5,852
	$	36,532	$	28,074

	Three months Ended September 30,
	2018			201 7
Income from Operations
Private-label contract manufacturing	$	3,145		$	2,257
Patent and trademark licensing		1,802			1,188
Income from operations of reportable segments		4,947			3,445
Corporate expenses not allocated to segments		(2,223	)		(1,562	)
	$	2,724		$	1,883

	September 30, 2018		June 30, 2018
Total Assets
Private-label contract manufacturing	$	72,677	$	69,037
Patent and trademark licensing		17,425		16,170
	$	90,102	$	85,207

Our private-label contract manufacturing products are sold both in the U.S. and in markets outside the U.S., including Europe, Canada, Australia, New Zealand, and Asia. Our primary markets outside the U.S. are Europe and Asia. Our patent and trademark licensing activities are primarily based in the U.S.

Net sales by geographic region, based on the customers’ location, were as follows (in thousands):

	Three months Ended September 30,
	2018		2017
United States	$	17,646	$	15,194
Markets outside the United States		18,886		12,880
Total net sales	$	36,532	$	28,074

Products manufactured by NAIE accounted for

72%

of net sales in markets outside the U.S. for the

three

months ended

September 30, 2018,

and

75%

for the

three

months ended

September 30, 2017.

products manufactured by NAIE were sold in the U.S. during the

three

months ended

September 30, 2018

and

2017.

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
									Three Months Ended
	September 30, 2018		June 30, 201 8		September 30, 2018		June 30, 2018		September 30, 2018		September 30, 201 7
United States	$	10,841	$	10,887	$	54,279	$	51,562	$	337	$	89
Europe		8,436		8,403		35,823		33,645		459		867
	$	19,277	$	19,290	$	90,102	$	85,207	$	796	$	956