Annual report pursuant to Section 13 and 15(d)

OPERATING BUSINESS SEGMENT AND INTERNATIONAL OPERATION INFORMATION

v2.4.0.8
OPERATING BUSINESS SEGMENT AND INTERNATIONAL OPERATION INFORMATION
12 Months Ended
Dec. 31, 2013
OPERATING BUSINESS SEGMENT AND INTERNATIONAL OPERATION INFORMATION  
OPERATING BUSINESS SEGMENT AND INTERNATIONAL OPERATION INFORMATION

NOTE 13:  OPERATING BUSINESS SEGMENT AND INTERNATIONAL OPERATION 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 selling and Distributor compensation plans and products with formulations that are sufficiently different from those of the 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 (loss) by segment before consideration of certain inter-segment transfers and expenses.

 

Reportable business segment information for the years ended December 31, 2013, 2012 and 2011 is as follows:

 

Year Ended December 31,

 

2013

 

2012

 

2011

 

Net sales revenue:

 

 

 

 

 

 

 

NSP Americas, Asia Pacific and Europe

 

$

207,059

 

$

208,945

 

$

216,912

 

NSP Russia, Central and Eastern Europe

 

62,747

 

57,853

 

56,986

 

Synergy WorldWide

 

108,290

 

100,670

 

93,915

 

Total net sales revenue

 

378,096

 

367,468

 

367,813

 

Contribution margin (1):

 

 

 

 

 

 

 

NSP Americas, Asia Pacific and Europe

 

84,247

 

82,778

 

86,004

 

NSP Russia, Central and Eastern Europe

 

22,542

 

21,957

 

22,374

 

Synergy WorldWide

 

38,011

 

36,142

 

36,143

 

Total contribution margin

 

144,800

 

140,877

 

144,521

 

 

 

 

 

 

 

 

 

Selling, general and administrative

 

120,743

 

106,861

 

109,606

 

Contract termination costs

 

 

 

14,750

 

Operating income

 

24,057

 

34,016

 

20,165

 

 

 

 

 

 

 

 

 

Other income, net

 

1,596

 

1,480

 

1,847

 

Income before provision for income taxes

 

$

25,653

 

$

35,496

 

$

22,012

 

 

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

 

Year Ended December 31,

 

2013

 

2012

 

2011

 

Capital expenditures:

 

 

 

 

 

 

 

NSP Americas, Asia Pacific and Europe

 

$

8,018

 

$

5,684

 

$

993

 

NSP Russia, Central and Eastern Europe

 

4

 

44

 

66

 

Synergy WorldWide

 

534

 

1,051

 

1,183

 

Total capital expenditures

 

$

8,556

 

$

6,779

 

$

2,242

 

 

 

 

 

 

 

 

 

Depreciation and amortization:

 

 

 

 

 

 

 

NSP Americas, Asia Pacific and Europe

 

$

3,568

 

$

3,339

 

$

3,827

 

NSP Russia, Central and Eastern Europe

 

27

 

36

 

43

 

Synergy WorldWide

 

871

 

703

 

492

 

Total depreciation and amortization

 

$

4,466

 

$

4,078

 

$

4,362

 

 

As of December 31,

 

2013

 

2012

 

Assets:

 

 

 

 

 

NSP Americas, Asia Pacific and Europe

 

$

148,278

 

$

136,237

 

NSP Russia, Central and Eastern Europe

 

11,233

 

8,558

 

Synergy WorldWide

 

40,101

 

49,124

 

Total assets

 

$

199,612

 

$

193,919

 

 

From an individual country perspective, only the United States comprises approximately 10 percent or more of consolidated net sales revenue for any of the years ended December 31, 2013, 2012 and 2011 as follows:

 

Year Ended December 31,

 

2013

 

2012

 

2011

 

Net sales revenue:

 

 

 

 

 

 

 

United States

 

$

152,209

 

$

154,716

 

$

159,471

 

Other

 

225,887

 

212,752

 

208,342

 

Total net sales revenue

 

$

378,096

 

$

367,468

 

$

367,813

 

 

Revenue generated by each of the Company’s product lines is set forth below (U.S. dollars in thousands):

 

Year Ended December 31,

 

2013

 

2012

 

2011

 

NSP Americas, Asia Pacific and Europe:

 

 

 

 

 

 

 

General health

 

$

88,239

 

$

91,994

 

$

95,342

 

Immunity

 

25,187

 

25,331

 

26,099

 

Cardiovascular

 

14,004

 

13,897

 

15,095

 

Digestive

 

59,877

 

58,127

 

62,175

 

Personal care

 

5,543

 

6,400

 

5,908

 

Weight management

 

14,209

 

13,196

 

12,293

 

 

 

207,059

 

208,945

 

216,912

 

NSP Russia, Central and Eastern Europe:

 

 

 

 

 

 

 

General health

 

$

22,690

 

$

20,540

 

$

19,448

 

Immunity

 

7,902

 

7,365

 

7,558

 

Cardiovascular

 

4,324

 

4,367

 

5,342

 

Digestive

 

15,693

 

14,501

 

14,857

 

Personal care

 

8,817

 

8,908

 

7,848

 

Weight management

 

3,321

 

2,172

 

1,933

 

 

 

62,747

 

57,853

 

56,986

 

Synergy WorldWide:

 

 

 

 

 

 

 

General health

 

$

36,723

 

$

33,969

 

$

29,592

 

Immunity

 

1,394

 

1,104

 

802

 

Cardiovascular

 

42,154

 

42,696

 

41,163

 

Digestive

 

16,897

 

14,904

 

13,606

 

Personal care

 

7,097

 

5,631

 

6,674

 

Weight management

 

4,025

 

2,366

 

2,078

 

 

 

108,290

 

100,670

 

93,915

 

Total net sales revenue

 

$

378,096

 

$

367,468

 

$

367,813

 

 

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

 

As of December 31 

 

2013

 

2012

 

Property, plant and equipment

 

 

 

 

 

United States

 

$

25,713

 

$

20,923

 

Venezuela

 

3,207

 

3,535

 

Other

 

3,102

 

3,492

 

Total property, plant and equipment

 

$

32,022

 

$

27,950