Quarterly report pursuant to Section 13 or 15(d)

Segment Information

v2.4.0.8
Segment Information
 9 Months Ended
Sep. 30, 2013
Segment Information  
Segment Information

(8)                     Segment Information

 

The Company has three 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 two business segments that operate under the Nature’s Sunshine Products brand and are divided based on the characteristics of their Distributor base, similarities in compensation plans, as well as the internal organization of NSP’s officers and their responsibilities (NSP Americas, Asia Pacific and Europe; and NSP Russia, Central and Eastern Europe). The Company’s third business segment operates under the Synergy WorldWide brand, which distributes its products through different marketing and Distributor compensation plans and products with formulations that are sufficiently different from those of NSP Americas, Asia Pacific and Europe; and NSP Russia, Central and Eastern Europe to warrant accounting for these operations as a separate business segment. Net sales revenues 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 by segment before consideration of certain inter-segment transfers and expenses.

 

During 2012, the Company engaged in a reorganization process in which the business segments, the roles of upper management responsible for operating the business segments, and the information provided to the chief executive officer were reevaluated.  As a result of the reorganization process, the two historical NSP segments (NSP United States and NSP International), which were separated based on their geographical operations, were divided into two new segments (NSP Americas, Asia Pacific and Europe; and NSP Russia, Central and Eastern Europe) based on the nature of their business activities, and the information presented to the chief executive officer. NSP Americas, Asia Pacific and Europe distributes products through a mixture of retailing, practitioners and direct selling while NSP Russia, Central and Eastern Europe is more oriented to a network marketing approach. The new NSP segments conform to a revised internal management structure, and report their operating results separately to the chief executive officer. There was no change to the Synergy WorldWide segment.  The presentation of the comparative information has been revised to conform to the new presentation.

 

Reportable business segment information is as follows:

 

 

 

Three Months Ended
September 30,

 

Nine Months Ended
September 30,

 

 

 

2013

 

2012

 

2013

 

2012

 

Net sales revenue:

 

 

 

 

 

 

 

 

 

NSP Americas, Asia Pacific and Europe

 

$

50,560

 

$

51,783

 

$

157,113

 

$

159,254

 

NSP Russia, Central and Eastern Europe

 

14,577

 

13,187

 

45,695

 

41,986

 

Synergy WorldWide

 

27,321

 

26,262

 

79,804

 

75,851

 

Total net sales revenue

 

92,458

 

91,232

 

282,612

 

277,091

 

 

 

 

 

 

 

 

 

 

 

Contribution margin (1):

 

 

 

 

 

 

 

 

 

NSP Americas, Asia Pacific and Europe

 

19,973

 

20,513

 

64,234

 

63,708

 

NSP Russia, Central and Eastern Europe

 

5,409

 

5,043

 

16,915

 

16,069

 

Synergy WorldWide

 

9,501

 

9,377

 

27,313

 

27,555

 

Total contribution margin

 

34,883

 

34,933

 

108,462

 

107,332

 

 

 

 

 

 

 

 

 

 

 

Selling, general and administrative

 

28,170

 

26,228

 

86,996

 

79,142

 

Total operating income

 

6,713

 

8,705

 

21,466

 

28,190

 

 

 

 

 

 

 

 

 

 

 

Other income (expense), net

 

(269

)

(214

)

1,543

 

(159

)

Income before provision for income taxes

 

$

6,444

 

$

8,491

 

$

23,009

 

$

28,031

 

 

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

 

From an individual country perspective, only the United States comprises 10 percent or more of consolidated net sales revenue for the three and nine month periods ended September 30, 2013 and 2012 as follows:

 

 

 

Three Months Ended
September 30,

 

Nine Months Ended
September 30,

 

 

 

2013

 

2012

 

2013

 

2012

 

Net sales revenue:

 

 

 

 

 

 

 

 

 

United States

 

$

37,209

 

$

38,243

 

$

116,552

 

$

118,390

 

Other

 

55,249

 

52,989

 

166,060

 

158,701

 

 

 

$

92,458

 

$

91,232

 

$

282,612

 

$

277,091

 

 

Revenue generated by each of the Company’s product lines is set forth below:

 

 

 

Three Months Ended
September 30,

 

Nine Months Ended
September 30,

 

 

 

2013

 

2012

 

2013

 

2012

 

NSP Americas, Asia Pacific and Europe:

 

 

 

 

 

 

 

 

 

Herbal products

 

$

29,372

 

$

28,888

 

$

90,757

 

$

89,809

 

Vitamin, mineral and other nutritional supplements

 

19,102

 

20,379

 

59,672

 

61,566

 

Personal care products

 

1,179

 

1,560

 

3,786

 

4,861

 

Other products

 

907

 

956

 

2,898

 

3,018

 

 

 

50,560

 

51,783

 

157,113

 

159,254

 

NSP Russia, Central and Eastern Europe:

 

 

 

 

 

 

 

 

 

Herbal products

 

$

6,656

 

$

5,834

 

$

20,692

 

$

18,389

 

Vitamin, mineral and other nutritional supplements

 

6,854

 

5,954

 

21,337

 

18,686

 

Personal care products

 

1,016

 

1,354

 

3,511

 

4,775

 

Other products

 

51

 

45

 

155

 

136

 

 

 

14,577

 

13,187

 

45,695

 

41,986

 

Synergy WorldWide:

 

 

 

 

 

 

 

 

 

Herbal products

 

$

9,520

 

$

10,005

 

$

31,608

 

$

29,982

 

Vitamin, mineral and other nutritional supplements

 

15,967

 

14,510

 

42,725

 

40,575

 

Personal care products

 

1,471

 

1,394

 

4,405

 

4,020

 

Other products

 

363

 

353

 

1,066

 

1,274

 

 

 

27,321

 

26,262

 

79,804

 

75,851

 

 

 

$

92,458

 

$

91,232

 

$

282,612

 

$

277,091

 

 

From an individual country perspective, only the United States and Venezuela comprise 10 percent or more of consolidated property, plant and equipment as follows:

 

 

 

September 30,
2013

 

December 31,
2012

 

Property, plant and equipment:

 

 

 

 

 

United States

 

$

23,001

 

$

20,923

 

Venezuela

 

3,297

 

3,535

 

Other

 

3,049

 

3,492

 

Total property, plant and equipment

 

$

29,347

 

$

27,950