Quarterly report pursuant to Section 13 or 15(d)

Segment Information

v3.20.2
Segment Information
 6 Months Ended
Jun. 30, 2020
Segment Reporting [Abstract]  
Segment Information Segment Information
 
We have four business segments (Asia, Europe, North America, and Latin America and Other) based primarily upon the geographic region where each segment operates, as well as the internal organization of our officers and their responsibilities. Each of the geographic segments operate under the Nature’s Sunshine Products and Synergy® WorldWide brands. The Latin America and Other segment includes our wholesale business in which we sell products to various locally-managed entities independent of the Company that we have granted distribution rights for the relevant market.

Historically, our operating segments were based on brand, customer base, geographical operations with three operating business segments under the Nature’s Sunshine Products brand (NSP Americas; NSP Russia, Central and Eastern Europe; and NSP China), and one operating business segment under the Synergy® WorldWide brand.

During the second quarter of 2019, we realigned into geographic focused operating business segments across brands to further align regional strategies and drive synergies in product, organizational and go-to-market strategies in local markets. Our internal reporting structure was reorganized to support the new reporting segments and the chief operating decision maker now reviews the operating results of the four segments utilizing a geographic focused format. The presentation of the comparative information has been recast to conform to the 2019 realignment.

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 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
June 30,		 Six Months Ended
June 30,
  2020 2019 2020 2019
Net sales:        
Asia $ 32,757    $ 35,162    $ 63,715    $ 68,758   
Europe 15,465    15,075    36,092    30,672   
North America 34,471    34,620    73,228    71,143   
Latin America and Other 4,593    5,867    10,177    11,423   
Total net sales 87,286    90,724    183,212    181,996   
Contribution margin (1):        
Asia 16,052    16,677    30,579    32,402   
Europe 5,202    4,886    12,033    9,827   
North America 11,904    11,625    26,323    25,418   
Latin America and Other 1,946    2,369    4,396    4,740   
Total contribution margin 35,104    35,557    73,331    72,387   
Selling, general and administrative expenses (2) 28,504    31,019    59,569    64,871   
Operating income 6,600    4,538    13,762    7,516   
Other income (loss), net 1,509    306    (901)   258   
Income before provision for income taxes $ 8,109    $ 4,844    $ 12,861    $ 7,774   
_________________________________________

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

(2)  Service fees in China totaled $2.9 million and $4.8 million for the three and six-month periods ended June 30, 2020, respectively, compared to $2.3 million and $4.5 million for the three and six-month periods ended June 30, 2019. These service fees are included in 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, 2020 and 2019, as follows (dollar amounts in thousands):
 
  Three Months Ended
June 30,		 Six Months Ended
June 30,
  2020 2019 2020 2019
Net sales:        
United States $ 32,147    $ 32,194    $ 67,986    $ 66,155   
South Korea 14,466    18,923    30,855    37,451   
Other 40,673    39,607    84,371    78,390   
  $ 87,286    $ 90,724    $ 183,212    $ 181,996   
Net sales generated by each of our product lines is set forth below (dollar amounts in thousands):
 
  Three Months Ended
June 30,		 Six Months Ended
June 30,
  2020 2019 2020 2019
Asia        
General health $ 8,263    $ 10,752    $ 17,309    $ 18,836   
Immune 179    199    380    357   
Cardiovascular 9,323    11,561    18,662    23,394   
Digestive 8,391    7,333    14,547    12,108   
Personal care 1,877    1,820    4,882    6,087   
Weight management 4,724    3,497    7,935    7,976   
  32,757    35,162    63,715    68,758   
Europe        
General health $ 6,816    $ 5,372    $ 14,776    $ 11,120   
Immune 1,370    1,090    3,814    2,363   
Cardiovascular 2,215    2,766    5,112    5,617   
Digestive 3,781    3,550    8,713    7,181   
Personal care 718    1,661    2,469    3,160   
Weight management 565    636    1,208    1,231   
  15,465    15,075    36,092    30,672   
North America        
General health $ 14,887    $ 14,934    $ 30,351    $ 30,682   
Immune 5,049    3,340    12,847    7,558   
Cardiovascular 3,679    4,935    7,846    10,011   
Digestive 7,858    8,523    16,099    17,244   
Personal care 1,975    1,598    3,904    2,946   
Weight management 1,023    1,290    2,181    2,702   
  34,471    34,620    73,228    71,143   
Latin America and Other        
General health $ 1,350    $ 1,783    $ 2,964    $ 3,395   
Immune 380    602    1,489    1,210   
Cardiovascular 263    361    641    700   
Digestive 2,264    2,645    4,326    5,181   
Personal care 212    260    464    517   
Weight management 124    216    293    420   
  4,593    5,867    10,177    11,423   
  $ 87,286    $ 90,724    $ 183,212    $ 181,996   

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,
2020		 December 31,
2019
Property, plant and equipment:    
United States $ 52,467    $ 54,470   
Other 4,220    5,042   
Total property, plant and equipment, net $ 56,687    $ 59,512   
Total assets per segment is set forth below (dollar amounts in thousands):

June 30,
2020		 December 31,
2019
Assets:    
Asia $ 72,608    $ 65,959   
Europe 17,952    15,187   
North America 128,358    124,337   
Latin America and Other 8,011    7,585   
Total assets $ 226,929    $ 213,068