Quarterly report pursuant to Section 13 or 15(d)

Segment Information

v3.8.0.1
Segment Information
 3 Months Ended
Mar. 31, 2018
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 has four business segments that are divided based on the different characteristics of their distributor and customer bases, 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 NSP China), and one business segment operates under the Synergy® WorldWide brand. The NSP Russia, Central and Eastern Europe 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 the Company has granted distribution rights for the relevant market. Net sales for each segment have been reduced by intercompany sales as they are not included in the measure of segment profit or loss reviewed by the chief executive officer. The Company evaluates performance based on contribution margin (loss) by segment before consideration of certain inter-segment transfers and expenses.

In the fourth quarter of 2017, the Company moved the reporting of its wholesale business, in which the Company sells its products to a locally managed entity independent of the Company that has distribution rights for the market, from the NSP China segment to the NSP Russia, Central and Eastern Europe segment. The net sales and contribution margin for the three months ended March 31, 2017 were recast to reflect that change.

Reportable business segment information is as follows (dollar amounts in thousands):
 
 
Three Months Ended
March 31,
 
2018
 
2017
Net sales:
 

 
 

NSP Americas
$
41,872

 
$
44,645

NSP Russia, Central and Eastern Europe
9,551

 
8,446

Synergy WorldWide
31,817

 
27,313

NSP China
4,102

 
2,694

Total net sales
87,342

 
83,098

 
 
 
 
Contribution margin (1):
 

 
 

NSP Americas
17,335

 
19,195

NSP Russia, Central and Eastern Europe
3,204

 
2,924

Synergy WorldWide
9,508

 
8,199

NSP China
3,220

 
2,069

Total contribution margin
33,267

 
32,387

 
 
 
 
Selling, general and administrative (2)
32,386

 
30,336

Operating income
881

 
2,051

 
 
 
 
Other income, net
740

 
1,275

Income before provision for income taxes
$
1,621

 
$
3,326

_________________________________________

(1) Contribution margin consists of net sales less cost of sales and volume incentives expense.

(2) Service fees in the NSP China segment related sales in China, occurring after the Company's receipt of its direct selling license and pre-opening sales through Hong Kong, totaled $1.5 million and $0.9 million for the three-month periods ended March 31, 2018 and 2017, respectively. 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 for the three-month periods ended March 31, 2018 and 2017, as follows (dollar amounts in thousands):
 
 
Three Months Ended
March 31,
 
2018
 
2017
Net sales:
 

 
 

United States
$
35,227

 
$
37,735

South Korea
14,584

 
11,346

Other
37,531

 
34,017

 
$
87,342

 
$
83,098


 
Revenue generated by each of the Company’s product lines is set forth below (dollar amounts in thousands):
 
 
Three Months Ended
March 31,
 
2018
 
2017
NSP Americas:
 

 
 

General health
$
17,746

 
$
19,866

Immune
5,544

 
5,073

Cardiovascular
3,100

 
3,316

Digestive
11,712

 
12,148

Personal care
1,825

 
1,886

Weight management
1,945

 
2,356

 
41,872

 
44,645

NSP Russia, Eastern and Central Europe:
 

 
 

General health
$
4,131

 
$
3,943

Immune
1,029

 
862

Cardiovascular
695

 
595

Digestive
2,431

 
2,088

Personal care
960

 
642

Weight management
305

 
316

 
9,551

 
8,446

Synergy WorldWide:
 

 
 

General health
$
8,640

 
$
6,687

Immune
149

 
121

Cardiovascular
13,330

 
11,103

Digestive
3,825

 
3,465

Personal care
2,140

 
2,067

Weight management
3,733

 
3,870

 
31,817

 
27,313

NSP China:
 

 
 

General health
$
343

 
$
495

Immune
146

 
47

Cardiovascular
561

 
517

Digestive
2,456

 
1,431

Personal care
253

 
42

Weight management
343

 
162

 
4,102

 
2,694

 
$
87,342

 
$
83,098



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):
 
 
March 31,
2018
 
December 31,
2017
Property, plant and equipment:
 

 
 

United States
$
64,032

 
$
65,928

Other
3,062

 
3,178

Total property, plant and equipment
$
67,094

 
$
69,106