Quarterly report pursuant to Section 13 or 15(d)

Segment Information

v2.4.0.8
Segment Information
 6 Months Ended
Jun. 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
June 30,

 

Six Months Ended
June 30,

 

 

 

2013

 

2012

 

2013

 

2012

 

Net sales revenue:

 

 

 

 

 

 

 

 

 

NSP Americas, Asia Pacific and Europe

 

$

53,416

 

$

53,536

 

$

106,553

 

$

107,471

 

NSP Russia, Central and Eastern Europe

 

14,978

 

13,209

 

31,118

 

28,799

 

Synergy WorldWide

 

25,281

 

26,246

 

52,483

 

49,589

 

Total net sales revenue

 

93,675

 

92,991

 

190,154

 

185,859

 

 

 

 

 

 

 

 

 

 

 

Contribution margin (1):

 

 

 

 

 

 

 

 

 

NSP Americas, Asia Pacific and Europe

 

22,305

 

21,855

 

44,261

 

43,195

 

NSP Russia, Central and Eastern Europe

 

5,523

 

5,020

 

11,506

 

11,026

 

Synergy WorldWide

 

8,692

 

9,966

 

17,812

 

18,178

 

Total contribution margin

 

36,520

 

36,841

 

73,579

 

72,399

 

 

 

 

 

 

 

 

 

 

 

Selling, general and administrative

 

28,709

 

26,530

 

58,826

 

52,914

 

Total operating income

 

7,811

 

10,311

 

14,753

 

19,485

 

 

 

 

 

 

 

 

 

 

 

Other income, net

 

1,482

 

165

 

1,812

 

55

 

Income before provision for income taxes

 

$

9,293

 

$

10,476

 

$

16,565

 

$

19,540

 

 

(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 six month periods ended June 30, 2013 and 2012 as follows:

 

 

 

Three Months Ended
June 30,

 

Six Months Ended
June 30,

 

 

 

2013

 

2012

 

2013

 

2012

 

Net sales revenue:

 

 

 

 

 

 

 

 

 

United States

 

$

40,195

 

$

40,410

 

$

79,343

 

$

80,147

 

Other

 

53,480

 

52,581

 

110,811

 

105,712

 

 

 

$

93,675

 

$

92,991

 

$

190,154

 

$

185,859

 

 

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

 

 

 

Three Months Ended
June 30,

 

Six Months Ended
June 30,

 

 

 

2013

 

2012

 

2013

 

2012

 

NSP Americas, Asia Pacific and Europe:

 

 

 

 

 

 

 

 

 

Herbal products

 

$

31,009

 

$

30,278

 

$

61,385

 

$

60,922

 

Vitamin, mineral and other nutritional supplements

 

20,086

 

20,725

 

40,570

 

41,187

 

Personal care products

 

1,353

 

1,579

 

2,607

 

3,301

 

Other products

 

968

 

954

 

1,991

 

2,061

 

 

 

53,416

 

53,536

 

106,553

 

107,471

 

NSP Russia, Central and Eastern Europe:

 

 

 

 

 

 

 

 

 

Herbal products

 

$

6,864

 

$

5,775

 

$

14,036

 

$

12,555

 

Vitamin, mineral and other nutritional supplements

 

7,001

 

5,764

 

14,483

 

12,732

 

Personal care products

 

1,066

 

1,627

 

2,495

 

3,420

 

Other products

 

47

 

43

 

104

 

92

 

 

 

14,978

 

13,209

 

31,118

 

28,799

 

Synergy WorldWide:

 

 

 

 

 

 

 

 

 

Herbal products

 

$

10,149

 

$

11,530

 

$

22,088

 

$

19,977

 

Vitamin, mineral and other nutritional supplements

 

13,426

 

13,028

 

26,758

 

26,065

 

Personal care products

 

1,364

 

1,188

 

2,934

 

2,626

 

Other products

 

342

 

500

 

703

 

921

 

 

 

25,281

 

26,246

 

52,483

 

49,589

 

 

 

$

93,675

 

$

92,991

 

$

190,154

 

$

185,859

 

 

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

 

 

 

June 30,
2013

 

December 31,
2012

 

Property, plant and equipment:

 

 

 

 

 

United States

 

$

21,579

 

$

20,923

 

Venezuela

 

3,407

 

3,535

 

Other

 

3,169

 

3,492

 

Total property, plant and equipment

 

$

28,155

 

$

27,950