v3.26.1
Note 11 - Segment Information
3 Months Ended
Mar. 31, 2026
Notes to Financial Statements  
Segment Reporting [Text Block]

NOTE 11: SEGMENT INFORMATION

 

The Company operates as a direct seller in the nutritional supplement industry. The Company's sole reporting segment is one in which it sells proprietary nutritional supplements, skin care and anti-aging products, and weight-management and fitness products operating in twenty-five markets. The products are primarily sold through a network marketing distribution channel of active associates and preferred customer positions who we refer to as current associates and preferred customers. Each of our subsidiaries sells similar products and exhibits similar economic characteristics, such as selling prices, paying commissions and incentives, gross margins and operating characteristics.

 

The Chief Operating Decision Maker (“CODM”) is the Company’s Chief Executive Officer. The CODM regularly reviews consolidated financial information and performance used to make decisions about the Company as a whole and without distinguishing or grouping of operations based on asset type, revenue, geographic location, tenant or other factors. Accordingly, for disclosure purposes, the Company has a single reportable segment, which is reported on the Company’s consolidated financial statements.

 

The CODM evaluates performance and allocates resources based on net income as reported in the consolidated statements of operations. Total expenditures for long-lived assets are reported on the consolidated statements of cash flows.

 

Measure of total assets is consistent with total assets reported on the consolidated balance sheets. The CODM reviews consolidated net income to evaluate performance and determine if resources should be deployed into other aspects of the Company, such as to repay debt, buy back common stock under the share repurchase program or pay dividends.

 

The following table presents the Company's segment revenue, segment expenses and segment income (loss) for the three months ended March 31, 2026 and 2025 (in thousands):

 

  

Three Months Ended

 
  

March 31,

 
  

2026

  

2025

 

Net Sales

 $24,917  $26,563 

Less:

        

Cost of sales

  6,056   6,827 

Commissions and incentives

  9,759   10,553 

Human Resources

  4,000   4,099 

Distribution and warehouse

  410   457 

Selling and administrative expenses

  4,611   5,167 

Depreciation and amortization

  261   293 

Interest expense

  126   133 

Interest income

  (22)  (60)

Other (income) expense

  (1,395)  418 

Income tax expense

  161   206 

Segment net income (loss)

 $950  $(1,530)
         

Reconciliation of profit or loss

        

Adjustments and reconciling items

      

Consolidated net income (loss)

 $950  $(1,530)

 

The Company currently sells its products in three regions: (i) the Americas (the United States, Canada and Mexico); (ii) Europe/the Middle East/Africa (“EMEA”) (Austria, the Czech Republic, Denmark, Estonia, Finland, Germany, the Republic of Ireland, Namibia, the Netherlands, Norway, South Africa, Spain, Sweden and the United Kingdom); and (iii) Asia/Pacific (Australia, Japan, New Zealand, the Republic of Korea, Singapore, Hong Kong, Taiwan, Thailand and China). It also ships products to customers in the following countries: Belgium, France, Greece, Italy, Luxembourg, and Poland.

 

Consolidated net sales shipped to customers in these regions, along with associate fee and product information for the three months ended March 31, were as follows (in millions, except percentages):

 

 

  

Three Months Ended

 
  

March 31,

 

Region

 

2026

  

2025

 

United States

 $4.6   18.5% $6.5   24.4%

Other Countries

  2.1   8.4%  2.5   9.4%

The Americas

 $6.7   26.9% $9.0   33.8%
                 

China

 $2.7   10.9% $2.0   7.5%

Korea

 $10.2   41.0%  10.6   39.8%

Other Countries

 $3.0   12.0%  2.8   10.5%

Asia/Pacific

 $15.9   63.9% $15.4   57.9%
                 

EMEA

  2.3   9.2%  2.2   8.3%

Total sales

 $24.9   100.0% $26.6   100.0%

 

 

  

Three Months Ended

 
  

March 31,

 
  

2026

  

2025

 

Product sales

 $24.5  $26.1 

Associate fees

  0.1   0.1 

Other

  0.3   0.4 

Total sales

 $24.9  $26.6 

 

              Long-lived assets, which include property and equipment and construction in process for the Company and its subsidiaries, as of March 31, 2026 and December 31, 2025, reside in the following regions, as follows (in millions):

 

Region

 

March 31, 2026

  

December 31, 2025

 

Americas

 $2.5  $2.6 

Asia/Pacific

  0.5   0.5 

EMEA

      

Total long-lived assets

 $3.0  $3.1 

 

Inventory balances, which consist of raw materials, finished goods, and promotional materials, as offset by the allowance for slow moving or obsolete inventories, reside in the following regions (in millions):

 

Region

 

March 31, 2026

  

December 31, 2025

 

Americas

 $4.1  $4.8 

Asia/Pacific

  4.4   4.3 

EMEA

  1.2   1.0 

Total inventory

 $9.7  $10.1