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Note N - Segment Information
 12 Months Ended
Jun. 30, 2025
Notes to Financial Statements  
Segment Reporting Disclosure [Text Block]

N. 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 and TriBsyn™ trademark.

 

The chief operating decision maker is the Company's Chief Executive Officer, who, in conjunction with senior management, evaluates segment 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.

 

Our operating results by business segment for the year ended June 30, 2025 were as follows (in thousands):

 

              

Natural

 
          

Corporate

  

Alternatives

 
  

Private-label

  

Patent and

  

expenses

  

International

 
  

contract

  

trademark

  

not allocated

  

Inc.

 
  

manufacturing

  

licensing

  

to segments

  

Consolidated

 
                 

Net sales

 $121,779  $8,081  $-  $129,860 

Cost of goods sold

  118,111   2,460   -   120,571 

Gross profit

  3,668   5,621   -   9,289 

Other selling, general and administrative expenses

  5,395   2,215   8,939   16,549 

Settlement of legal proceeding and associated expense

  -   -   1,400 (1)  1,400 
                 

(Loss) income from operations

  (1,727)  3,406   (10,339)  (8,660)
                 

Other income (expense):

                

Interest income

  168   -   -   168 

Interest expense

  (915)  -   -   (915)

Foreign exchange loss

  (1,340)  -   -   (1,340)

Other, net

  7   -   -   7 

Total other expense

  (2,080)  -   -   (2,080)
                 

(Loss) income before income taxes

  (3,807)  3,406   (10,339)  (10,740)

Provision for income taxes

           2,835 

Net loss

          $(13,575)
                 

Other supplemental information:

                

Stock-based compensation

 $887  $90  $-  $977 

Depreciation and amortization

  4,553   7   -   4,560 

Total assets

  113,843   38,096   -   151,939 

Capital expenditures

  3,614   -   -   3,614 

 

1

Expenses accrued for gross settlement of legal action pursuant to and in accordance with California's PAGA and related legal fees for services associated with the legal settlement were allocated to Corporate expenses.

 

Our operating results by business segment for the year ended June 30, 2024 were as follows (in thousands):

 

              Natural 
          Corporate  Alternatives 
  

Private-label

  

Patent and

  

expenses

  

International

 
  

contract

  

trademark

  

not allocated

  

Inc.

 
  

manufacturing

  

licensing

  

to segments

  

Consolidated

 
                 

Net sales

 $105,358  $8,438  $-  $113,796 

Cost of goods sold

  103,727   3,204   -   106,931 

Gross profit

  1,631   5,234   -   6,865 

Selling, general and administrative expenses

  5,097   1,915   8,387   15,399 
                 

(Loss) income from operations

  (3,466)  3,319   (8,387)  (8,534)
                 

Other income (expense):

                

Interest income

  176   -   -   176 

Interest expense

  (361)  -   -   (361)

Foreign exchange loss

  (652)  -   -   (652)

Other, net

  (93)  -   -   (93)

Total other expense

  (930)  -   -   (930)
                 

(Loss) income before income taxes

  (4,396)  3,319   (8,387)  (9,464)

Benefit for income taxes

           (2,247)

Net loss

          $(7,217)
                 
                 

Other supplemental information:

                

Stock-based compensation

 $1,104  $96  $-  $1,200 

Depreciation and amortization

  4,640   7   -   4,647 

Total assets

  127,786   34,556   -   162,342 

Capital expenditures

  3,017   -   -   3,017 

 

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, Mexico 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, for the two years ended June 30 were as follows (in thousands):

 

  

2025

  

2024

 

United States

 $79,128  $73,512 

Markets outside the United States

  50,732   40,284 

Total net sales

 $129,860  $113,796 

 

Products manufactured by NAIE accounted for 85% of consolidated net sales in markets outside the U.S. in fiscal 2025 and 79% of consolidated net sales in markets outside the U.S. in fiscal 2024. No products manufactured by NAIE were sold in the U.S. during the fiscal years ended June 30, 2025 and 2024.

 

Long-lived assets by geographic region, based on the location of the company or subsidiary at which they were located or made, for the two years ended June 30 were as follows (in thousands):

 

  

2025

  

2024

 

United States

 $76,212  $78,146 

Europe

  15,732   17,602 

Total Long-lived assets

 $91,944  $95,748 

 

Total assets by geographic region, based on the location of the company or subsidiary at which they were located or made, for the two years ended June 30 were as follows (in thousands):

 

  

2025

  

2024

 

United States

 $105,860  $118,878 

Europe

  46,079   43,464 

Total assets

 $151,939  $162,342 

 

Capital expenditures by geographic region, based on the location of the company or subsidiary at which they were located or made, for the two years ended June 30 were as follows (in thousands):

 

  

2025

  

2024

 

United States

 $2,862  $2,793 

Europe

  752   224 

Total capital expenditures

 $3,614  $3,017