Segment Information

As a direct selling platform, the Company has a variety of products offerings sold primarily by independent sales force members across many countries around the world. During the fiscal year ended December 31, 2016 and December 31, 2015, gross revenue generated in international markets totaled approximately $115.9 million or 80.4% and $98.2 million or 71.0%, respectively. The Company's long-lived assets are concentrated in the United States, even after the acquisitions of Kleeneze and Betterware.

The Company shows results for four operating segments, three of which qualify as reportable segments. The Company has grouped the operating segments into the following product offerings: "gourmet food," "nutritional and wellness," "home décor" and "other." Of these operating segments, the home décor segment, nutritional-and-wellness segment, and gourmet food segment qualify as reportable segments under the SEC reporting regulations.

Each identified reportable segment engages in business activities, incurs expenses, and produces revenue. The operating results of these segments are regularly reviewed by CODMs and there is discrete financial information available for each unit. In addition, the gross revenue of each reportable segment, both external and inter-company, equates and/ or exceeds 10% of the Company's consolidated gross revenue. As such, the CODMs view these segments as appropriate for decision making purposes because they each represent a significant part of the business.

The following is a brief description of each reportable segment:

Home Décor - This segment consists of operations related to the production, sourcing, and sale of premium hand-crafted baskets and the selling of products for the home, including pottery, cleaning, beauty, outdoor, and customizable vinyl expressions for display. These operations are primarily located within the United States and the United Kingdom. Kleeneze, Betterware, Longaberger, and Uppercase Living are the primary subsidiaries involved in this reportable segment.

Nutritional and Wellness - This segment consists of operations related to the selling of nutritional supplements and skin care products. These operations have a presence in approximately 50 countries, such as Italy, Russia, and Thailand. Agel is the primary subsidiary in this reportable segment.

Gourmet Food - This segment consists of operations related to the production and sale of hand-crafted spices, oils and other food products from around the world. These operations have a presence in many of the Company's markets both in the U.S. and internationally such as in Australia, New Zealand, Canada, and the United Kingdom. The subsidiaries involved in this line of business are Your Inspiration at Home and My Secret Kitchen.

The Company notes that these three segments exceed 75% of the Company's consolidated revenue. Therefore, no further aggregation or disclosures are required for the remaining operating segments.

In addition to the reportable segments, the Company has included an "other" segment in all tables to provide increased transparency and ease the reconciliation process to the results found on the consolidated statements of operations. The "other" segment consists of operations related HCG, Paperly, and Tomboy Tools.

Post the 2015 acquisitions, the CODMs began placing a greater focus on the management of the segments. Prior to 2016, the CODMs only looked at the revenue and gross profit of the segments, as shown below in the 2015 table. Currently, the Company's CODMs look at each segment's gross profit, operating income, and other non-GAAP measures such as EBITDA to evaluate performance of the segments. As a result, the Company has presented the 2016 revenue, gross profit, operating expenses, and other expenses by operating segment in the table below. None of the reportable segments cross sell to other reportable segments.

Segment information, which includes all operating segments, for the fiscal year ended December 31, 2016 and December 31, 2015 are shown in the tables below (in thousands):



	Gourmet Food			Home Décor			Nutritional and Wellness			Other			Consolidated
2016
Revenue	$	12,686		$	105,239		$	25,337		$	983		$	144,245
Gross profit	7,040			51,644			19,157			583			78,424
Operating expenses	10,231			64,435			28,185			5,900			108,751
Gain on sale of marketable securities	—			—			—			(12		)	(12		)
Interest expense	9			2,263			42			1,858			4,172
Loss before income tax provision	$	(3,200	)	$	(15,054	)	$	(9,070	)	$	(7,163	)	$	(34,487	)

2015
Revenue	$	18,243		$	88,048		$	30,629		$	1,432		$	138,352
Gross profit	10,282			43,813			24,086			910			79,091
Operating expenses													98,847
Gain on sale of marketable securities													(189		)
Gain on acquisition of a business													(3,625		)
Interest expense													2,588
Loss before income tax provision													$	(18,530	)

The following table shows the total assets for each reportable segment as of December 31, 2016 and 2015 (in thousands):



	December 31, 2016		December 31, 2015
Gourmet food	$	347	$	197
Home décor	40,962		60,895
Nutritional and wellness	2,343		7,092
Other	9,839		14,320
Consolidated total assets	$	53,491	$	82,504

The following table summarizes goodwill for each reportable segment as of December 31, 2016 and 2015 (in thousands):



	December 31, 2016		December 31, 2015
Gourmet food	$	—	$	1,161
Home décor	1,846		2,137
Nutritional and wellness	—		1,938
Other	—		191
Consolidated goodwill	$	1,846	$	5,427