Quarterly report pursuant to Section 13 or 15(d)

Segment Information

v3.10.0.1
Segment Information
 6 Months Ended
Jun. 30, 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 and 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 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. 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 and six months ended June 30, 2017 were recast to reflect that change.

Reportable business segment information is as follows (dollar amounts in thousands):
 
 
Three Months Ended
June 30,
 
Six Months Ended
June 30,
 
2018
 
2017
 
2018
 
2017
Net sales:
 

 
 

 
 

 
 

NSP Americas
$
38,386

 
$
39,421

 
$
80,257

 
$
84,066

NSP Russia, Central and Eastern Europe
9,407

 
7,160

 
18,958

 
15,606

Synergy WorldWide
36,719

 
30,363

 
68,537

 
57,676

NSP China
6,754

 
4,400

 
10,856

 
7,094

Total net sales
91,266

 
81,344

 
178,608

 
164,442

 
 
 
 
 
 
 
 
Contribution margin (1):
 

 
 

 
 

 
 

NSP Americas
15,189

 
16,495

 
32,524

 
35,690

NSP Russia, Central and Eastern Europe
3,135

 
2,508

 
6,339

 
5,432

Synergy WorldWide
11,755

 
9,410

 
21,263

 
17,609

NSP China
5,417

 
3,446

 
8,637

 
5,515

Total contribution margin
35,496

 
31,859

 
68,763

 
64,246

 
 
 
 
 
 
 
 
Selling, general and administrative expenses (2)
33,310

 
31,836

 
65,696

 
62,172

Operating income
2,186

 
23

 
3,067

 
2,074

 
 
 
 
 
 
 
 
Other income (loss), net
(1,807
)
 
441

 
(1,067
)
 
1,716

Income before provision for income taxes
$
379

 
$
464

 
$
2,000

 
$
3,790

_________________________________________

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

(2)  Service fees in the NSP China segment related to sales in China, occurring after the Company's receipt of its direct selling license and pre-opening product sales through Hong Kong, totaled $2.5 million and $4.0 million for the three and six-month periods ended June 30, 2018, respectively, compared to $1.7 million and $2.6 million for the three and six-month periods ended June 30, 2017. These service fees are included in the Company's selling, general and administrative expenses.

From an individual country perspective, the United States and South Korea comprise 10 percent or more of consolidated net sales for the three and six-month periods ended June 30, 2018 and 2017, as follows (dollar amounts in thousands):
 
 
Three Months Ended
June 30,
 
Six Months Ended
June 30,
 
2018
 
2017
 
2018
 
2017
Net sales:
 

 
 

 
 

 
 

United States
$
32,913

 
$
33,805

 
$
68,140

 
$
71,540

South Korea
19,608

 
12,486

 
34,192

 
23,832

Other
38,745

 
35,053

 
76,276

 
69,070

 
$
91,266

 
$
81,344

 
$
178,608

 
$
164,442



Net sales generated by each of the Company’s product lines is set forth below (dollar amounts in thousands):
 
 
Three Months Ended
June 30,
 
Six Months Ended
June 30,
 
2018
 
2017
 
2018
 
2017
NSP Americas:
 

 
 

 
 

 
 

General health
$
17,058

 
$
18,181

 
$
34,800

 
$
38,047

Immune
3,845

 
3,169

 
9,389

 
8,242

Cardiovascular
2,874

 
2,820

 
5,974

 
6,136

Digestive
11,242

 
11,660

 
22,954

 
23,808

Personal care
1,510

 
1,487

 
3,335

 
3,373

Weight management
1,857

 
2,104

 
3,805

 
4,460

 
38,386

 
39,421

 
80,257

 
84,066

NSP Russia, Eastern and Central Europe:
 

 
 

 
 

 
 

General health
$
4,120

 
$
3,203

 
$
8,251

 
$
7,146

Immune
893

 
674

 
1,922

 
1,536

Cardiovascular
672

 
512

 
1,367

 
1,107

Digestive
2,510

 
2,150

 
4,941

 
4,238

Personal care
902

 
442

 
1,862

 
1,084

Weight management
310

 
179

 
615

 
495

 
9,407

 
7,160

 
18,958

 
15,606

Synergy WorldWide:
 

 
 

 
 

 
 

General health
$
10,562

 
$
7,624

 
$
19,203

 
$
14,311

Immune
140

 
117

 
289

 
238

Cardiovascular
15,383

 
12,603

 
28,713

 
23,706

Digestive
4,037

 
4,154

 
7,862

 
7,619

Personal care
2,308

 
1,926

 
4,448

 
3,993

Weight management
4,289

 
3,939

 
8,022

 
7,809

 
36,719

 
30,363

 
68,537

 
57,676

NSP China:
 

 
 

 
 

 
 

General health
$
795

 
$
824

 
$
1,138

 
$
1,318

Immune
10

 
84

 
156

 
131

Cardiovascular
1,848

 
940

 
2,409

 
1,457

Digestive
2,868

 
1,692

 
5,324

 
3,124

Personal care
1,007

 
27

 
1,260

 
69

Weight management
226

 
833

 
569

 
995

 
6,754

 
4,400

 
10,856

 
7,094

 
$
91,266

 
$
81,344

 
$
178,608

 
$
164,442



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):
 
 
June 30,
2018
 
December 31,
2017
Property, plant and equipment:
 

 
 

United States
$
63,721

 
$
65,928

Other
2,759

 
3,178

Total property, plant and equipment
$
66,480

 
$
69,106