Quarterly report pursuant to Section 13 or 15(d)

Segment Information

v2.4.0.6
Segment Information
 3 Months Ended
Mar. 31, 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 (loss) 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
March 31,

 

 

 

2013

 

2012

 

Net sales revenue:

 

 

 

 

 

NSP Americas, Asia Pacific and Europe

 

$

53,137

 

$

53,935

 

NSP Russia, Central and Eastern Europe

 

16,140

 

15,590

 

Synergy WorldWide

 

27,202

 

23,343

 

Total net sales revenue

 

96,479

 

92,868

 

 

 

 

 

 

 

Contribution margin (1):

 

 

 

 

 

NSP Americas, Asia Pacific and Europe

 

21,956

 

21,340

 

NSP Russia, Central and Eastern Europe

 

5,983

 

6,006

 

Synergy WorldWide

 

9,120

 

8,212

 

Total contribution margin

 

37,059

 

35,558

 

 

 

 

 

 

 

Selling, general and administrative

 

30,117

 

26,384

 

Operating income

 

6,942

 

9,174

 

 

 

 

 

 

 

Other income (expense), net

 

330

 

(110

)

Income before provision for income taxes

 

$

7,272

 

$

9,064

 

 

 

(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-month periods ended March 31, 2013 and 2012 as follows:

 

 

 

Three Months Ended
March 31,

 

 

 

2013

 

2012

 

Net sales revenue:

 

 

 

 

 

United States

 

$

39,148

 

$

39,737

 

Other

 

57,331

 

53,131

 

 

 

$

96,479

 

$

92,868

 

 

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

 

 

 

Three Months Ended
March 31,

 

 

 

2013

 

2012

 

NSP Americas, Asia Pacific and Europe:

 

 

 

 

 

Herbal Products

 

$

30,376

 

$

30,644

 

Vitamins and Mineral and Other Nutritional Supplements

 

20,484

 

20,462

 

Personal Care Products

 

1,254

 

1,722

 

Other Products

 

1,023

 

1,107

 

 

 

53,137

 

53,935

 

NSP Russia, Eastern and Central Europe:

 

 

 

 

 

Herbal Products

 

$

7,172

 

$

6,780

 

Vitamins and Mineral and Other Nutritional Supplements

 

7,482

 

6,968

 

Personal Care Products

 

1,429

 

1,793

 

Other Products

 

57

 

49

 

 

 

16,140

 

15,590

 

Synergy WorldWide:

 

 

 

 

 

Herbal Products

 

$

11,939

 

$

8,447

 

Vitamins and Mineral and Other Nutritional Supplements

 

13,332

 

13,037

 

Personal Care Products

 

1,570

 

1,438

 

Other Products

 

361

 

421

 

 

 

27,202

 

23,343

 

 

 

$

96,479

 

$

92,868

 

 

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

 

 

 

March 31,
2013

 

December 31,
2012

 

Property, plant and equipment:

 

 

 

 

 

United States

 

$

21,081

 

$

20,923

 

Venezuela

 

3,516

 

3,535

 

Other

 

3,294

 

3,492

 

Total property, plant and equipment

 

$

27,891

 

$

27,950