Quarterly report pursuant to Section 13 or 15(d)

Segment Information

v3.5.0.2
Segment Information
 9 Months Ended
Sep. 30, 2016
Segment Reporting [Abstract]  
Segment Information
Segment Information
 
The Company has four business segments. These business segments are components of the Company for which separate information is available that is evaluated regularly by the chief executive officer in deciding how to allocate resources and in assessing relative performance.
 
The Company's four business segments are divided based on the different characteristics of their distributor bases, selling and distributor compensation plans and product formulations, as well as the internal organization of its officers and their responsibilities and business operations.  Three business segments operate under the Nature’s Sunshine Products brand (NSP Americas; NSP Russia, Central and Eastern Europe; and China and New Markets). The Company’s China and New Markets segment anticipates deploying a multi-channel go-to-market strategy that offers select Nature’s Sunshine branded products through a direct selling model across China as well as through e-commerce channels.  The time to market will be dependent upon regulatory processes including product registration, permit and license approvals. The China and New Markets segment also includes the Company’s wholesale business, in which the Company sells its products to various locally managed entities independent of the Company that have distribution rights for the relevant market. The fourth business segment operates under the Synergy® WorldWide brand.

Reportable business segment information is as follows (dollar amounts in thousands):
 
 
Three Months Ended
September 30,
 
Nine Months Ended
September 30,
 
2016
 
2015
 
2016
 
2015
Net sales revenue:
 

 
 

 
 

 
 

NSP Americas
$
43,260

 
$
44,483

 
$
133,168

 
$
136,043

NSP Russia, Central and Eastern Europe
6,421

 
6,321

 
19,042

 
20,579

Synergy WorldWide
31,331

 
27,797

 
94,192

 
85,045

China and New Markets
4,429

 
985

 
10,807

 
3,044

Total net sales revenue
85,441

 
79,586

 
257,209

 
244,711

 
 
 
 
 
 
 
 
Contribution margin (1):
 

 
 

 
 

 
 

NSP Americas
19,057

 
18,685

 
57,077

 
57,232

NSP Russia, Central and Eastern Europe
2,231

 
2,287

 
6,477

 
7,197

Synergy WorldWide
9,556

 
8,809

 
28,740

 
26,677

China and New Markets
3,401

 
472

 
7,953

 
1,383

Total contribution margin
34,245

 
30,253

 
100,247

 
92,489

 
 
 
 
 
 
 
 
Selling, general and administrative (2)
29,187

 
27,115

 
88,821

 
80,837

Operating income
5,058

 
3,138

 
11,426

 
11,652

 
 
 
 
 
 
 
 
Other income (expense), net
20

 
(247
)
 
957

 
(567
)
Income from continuing operations before provision for income taxes
$
5,078

 
$
2,891

 
$
12,383

 
$
11,085

_________________________________________

(1)   Contribution margin consists of net sales revenue less cost of sales and volume incentives expense. For the China and New Markets segment, contribution margin does not include service fees related to pre-opening product sales through Hong Kong.

(2)  Service fees in the China and New Markets segment related to pre-opening product sales through Hong Kong totaled $1.5 million and $3.4 million for the three and nine-month periods ended September 30, 2016, respectively, compared to $0 for the three and nine-month periods ended September 30, 2015. These service fees are included in the Company's selling, general and administrative expenses.

From an individual country perspective, only the United States and South Korea comprise 10 percent or more of consolidated net sales revenue for the three and nine-month periods ended September 30, 2016 and 2015, as follows (dollar amounts in thousands):
 
 
Three Months Ended
September 30,
 
Nine Months Ended
September 30,
 
2016
 
2015
 
2016
 
2015
Net sales revenue:
 

 
 

 
 

 
 

United States
$
36,473

 
$
36,603

 
$
112,366

 
$
112,179

South Korea
14,083

 
12,191

 
42,754

 
36,341

Other
34,885

 
30,792

 
102,089

 
96,191

 
$
85,441

 
$
79,586

 
$
257,209

 
$
244,711


 
Revenue generated by each of the Company’s product lines is set forth below (dollar amounts in thousands):
 
 
Three Months Ended
September 30,
 
Nine Months Ended
September 30,
 
2016
 
2015
 
2016
 
2015
NSP Americas:
 

 
 

 
 

 
 

General health
$
19,063

 
$
20,119

 
$
58,914

 
$
59,607

Immune
4,599

 
5,095

 
13,913

 
16,350

Cardiovascular
3,193

 
3,026

 
9,723

 
9,670

Digestive
11,684

 
12,521

 
36,608

 
39,149

Personal care
1,925

 
952

 
5,708

 
2,792

Weight management
2,796

 
2,770

 
8,302

 
8,475

 
43,260

 
44,483

 
133,168

 
136,043

NSP Russia, Eastern and Central Europe:
 

 
 

 
 

 
 

General health
$
2,732

 
$
2,532

 
$
7,956

 
$
8,210

Immune
650

 
770

 
2,047

 
2,446

Cardiovascular
538

 
391

 
1,508

 
1,290

Digestive
1,741

 
1,829

 
5,269

 
5,651

Personal care
517

 
563

 
1,619

 
2,072

Weight management
243

 
236

 
643

 
910

 
6,421

 
6,321

 
19,042

 
20,579

Synergy WorldWide:
 

 
 

 
 

 
 

General health
$
8,711

 
$
8,006

 
$
27,045

 
$
23,353

Immune
205

 
91

 
455

 
368

Cardiovascular
13,188

 
11,831

 
39,386

 
36,898

Digestive
3,383

 
2,485

 
9,312

 
7,153

Personal care
1,838

 
1,784

 
5,725

 
5,346

Weight management
4,006

 
3,600

 
12,269

 
11,927

 
31,331

 
27,797

 
94,192

 
85,045

China and New Markets:
 

 
 

 
 

 
 

General health
$
575

 
$
471

 
$
2,583

 
$
1,428

Immune
206

 
123

 
553

 
384

Cardiovascular
948

 
70

 
2,471

 
224

Digestive
2,118

 
240

 
3,640

 
755

Personal care
189

 
24

 
650

 
70

Weight management
393

 
57

 
910

 
183

 
4,429

 
985

 
10,807

 
3,044

 
$
85,441

 
$
79,586

 
$
257,209

 
$
244,711



Beginning in 2016, for the Synergy WorldWide segment, the Company changed its allocation of products sold within promotional product kits from the category associated with the predominant product, to each individual product being included in its respective category. Prior periods have been reclassified to conform to the current period’s presentation.

From an individual country perspective, only the United States comprised 10 percent or more of consolidated property, plant and equipment as follows (dollar amounts in thousands):
 
 
September 30,
2016
 
December 31,
2015
Property, plant and equipment:
 

 
 

United States
$
70,420

 
$
66,044

Other
2,501

 
2,684

Total property, plant and equipment
$
72,921

 
$
68,728