Segment Information

3 Months Ended

Mar. 31, 2020

We have four business segments (Asia, Europe, North America, and Latin America and Other) based primarily upon the geographic region where each segment operates, as well as the internal organization of our officers and their responsibilities. Each of the geographic segments operate under the Nature’s Sunshine Products and Synergy® WorldWide brands. The Latin America and Other segment includes our wholesale business in which we sell products to various locally-managed entities independent of the Company that we have granted distribution rights for the relevant market.

Historically, our operating segments were based on brand, customer base, geographical operations with three operating business segments under the Nature’s Sunshine Products brand (NSP Americas; NSP Russia, Central and Eastern Europe; and NSP China), and one operating business segment under the Synergy® WorldWide brand.

During the second quarter of 2019, we realigned into geographic focused operating business segments across brands to further align regional strategies and drive synergies in product, organizational and go-to-market strategies in local markets. Our internal reporting structure was reorganized to support the new reporting segments and the chief operating decision maker now reviews the operating results of the four segments utilizing a geographic focused format. The presentation of the comparative information has been recast to conform to the 2020 presentation.

Net sales 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. We evaluate performance based on contribution margin by segment before consideration of certain inter-segment transfers and expenses.

Reportable business segment information is as follows (dollar amounts in thousands):


	Three Months Ended March 31,
	2020		2019
Net sales:
Asia	$	30,958	$	33,596
Europe	20,627		15,597
North America	38,757		36,523
Latin America and Other	5,584		5,556
Total net sales	95,926		91,272

Contribution margin (1):
Asia	14,527		15,725
Europe	6,831		4,941
North America	14,419		13,793
Latin America and Other	2,450		2,371
Total contribution margin	38,227		36,830

Selling, general and administrative expenses (2)	31,065		33,852
Operating income	7,162		2,978

Other loss, net	(2,410)		(48)
Income before provision for income taxes	$	4,752	$	2,930

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

(2) Service fees in China totaled $1.9 million and $2.2 million for the three-month periods ended March 31, 2020 and 2019, respectively. These service fees are included in selling, general and administrative expenses.

From an individual country perspective, the United States and South Korea comprise 10 percent or more of consolidated net sales for the three-month periods ended March 31, 2020 and 2019, as follows (dollar amounts in thousands):


	Three Months Ended March 31,
	2020		2019
Net sales:
United States	$	35,839	$	33,961
South Korea	16,389		18,528
Other	43,698		38,783
	$	95,926	$	91,272

Net sales generated by each of our product lines is set forth below (dollar amounts in thousands):


	Three Months Ended March 31,
	2020		2019
Asia
General health	$	9,046	$	8,084
Immune	201		158
Cardiovascular	9,339		11,833
Digestive	6,156		4,775
Personal care	3,005		4,267
Weight management	3,211		4,479
	30,958		33,596
Europe
General health	$	7,961	$	5,748
Immune	2,444		1,273
Cardiovascular	2,897		2,851
Digestive	4,931		3,631
Personal care	1,751		1,499
Weight management	643		595
	20,627		15,597
North America
General health	$	15,464	$	15,748
Immune	7,798		4,218
Cardiovascular	4,167		5,076
Digestive	8,241		8,721
Personal care	1,929		1,348
Weight management	1,158		1,412
	38,757		36,523
Latin America and Other
General health	$	1,614	$	1,612
Immune	809		608
Cardiovascular	378		339
Digestive	2,362		2,536
Personal care	252		257
Weight management	169		204
	5,584		5,556
	$	95,926	$	91,272

From an individual country perspective, only the United States comprised 10 percent or more of consolidated property, plant and equipment as follows (dollar amounts in thousands):


	March 31, 2020		December 31, 2019
Property, plant and equipment:
United States	$	53,450	$	54,470
Other	4,638		5,042
Total property, plant and equipment, net	$	58,088	$	59,512

Total assets per segment is set forth below (dollar amounts in thousands):


	March 31, 2020		December 31, 2019
Assets:
Asia	$	65,199	$	65,959
Europe	15,171		15,187
North America	127,178		124,337
Latin America and Other	7,894		7,585
Total assets	$	215,442	$	213,068