Quarterly report pursuant to Section 13 or 15(d)

Segment Information

v3.19.1
Segment Information
 3 Months Ended
Mar. 31, 2019
Segment Reporting [Abstract]  
Segment Information
Segment Information
 
We have 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.

Our 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 our 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 our wholesale business, in which we sell our products to various locally-managed entities independent of the Company that we have 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. We evaluate performance based on contribution margin (loss) by segment before consideration of certain inter-segment transfers and expenses.

Reportable business segment information is as follows (dollar amounts in thousands):
 
 
Three Months Ended
March 31,
 
2019
 
2018
Net sales:
 

 
 

NSP Americas
$
38,667

 
$
41,872

NSP Russia, Central and Eastern Europe
11,358

 
9,551

Synergy WorldWide
34,994

 
31,817

NSP China
6,253

 
4,102

Total net sales
91,272

 
87,342

 
 
 
 
Contribution margin (1):
 

 
 

NSP Americas
17,351

 
17,335

NSP Russia, Central and Eastern Europe
3,795

 
3,204

Synergy WorldWide
10,731

 
9,508

NSP China
4,953

 
3,220

Total contribution margin
36,830

 
33,267

 
 
 
 
Selling, general and administrative (2)
33,852

 
32,386

Operating income
2,978

 
881

 
 
 
 
Other income, net
(48
)
 
740

Income before provision for income taxes
$
2,930

 
$
1,621

_________________________________________

(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 totaled $2.2 million and $1.5 million for the three-month periods ended March 31, 2019 and 2018, respectively. These service fees are included in our selling, general and administrative expenses.

From an individual country perspective, only the United States and South Korea comprised 10 percent or more of consolidated net sales for the three-month periods ended March 31, 2019 and 2018, as follows (dollar amounts in thousands):
 
 
Three Months Ended
March 31,
 
2019
 
2018
Net sales:
 

 
 

United States
$
33,961

 
$
35,227

South Korea
18,528

 
14,584

Other
38,783

 
37,531

 
$
91,272

 
$
87,342


 
Revenue generated by each of the Company’s product lines is set forth below (dollar amounts in thousands):
 
 
Three Months Ended
March 31,
 
2019
 
2018
NSP Americas:
 

 
 

General health
$
16,918

 
$
17,746

Immune
4,760

 
5,544

Cardiovascular
2,853

 
3,100

Digestive
11,051

 
11,712

Personal care
1,556

 
1,825

Weight management
1,529

 
1,945

 
38,667

 
41,872

NSP Russia, Eastern and Central Europe:
 

 
 

General health
$
4,599

 
$
4,131

Immune
1,335

 
1,029

Cardiovascular
903

 
695

Digestive
2,854

 
2,431

Personal care
1,414

 
960

Weight management
253

 
305

 
11,358

 
9,551

Synergy WorldWide:
 

 
 

General health
$
10,932

 
$
8,640

Immune
80

 
149

Cardiovascular
14,616

 
13,330

Digestive
3,929

 
3,825

Personal care
1,841

 
2,140

Weight management
3,596

 
3,733

 
34,994

 
31,817

NSP China:
 

 
 

General health
$
342

 
$
343

Immune
77

 
146

Cardiovascular
750

 
561

Digestive
1,567

 
2,456

Personal care
2,465

 
253

Weight management
1,052

 
343

 
6,253

 
4,102

 
$
91,272

 
$
87,342



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,
2019
 
December 31,
2018
Property, plant and equipment:
 

 
 

United States
$
58,969

 
$
60,606

Other
2,992

 
3,455

Total property, plant and equipment
$
61,961

 
$
64,061