Note G - Segment Information

3 Months Ended

Sep. 30, 2016

Notes to Financial Statements

Segment Reporting Disclosure [Text Block]

G. Segment Information

Our business consists of two segments for financial reporting purposes, identified as (i) private label contract manufacturing, which primarily relates to the provision of private label contract manufacturing services to companies that market and distribute nutritional supplements and other health care products; and (ii) patent and trademark licensing, which primarily includes direct raw material sales and royalty income from our license and supply agreements associated with the sale and use of beta-alanine under our CarnoSyn® trade name.

We evaluate performance based on a number of factors. The primary performance measures for each segment are net sales and income or loss from operations before corporate allocations. Operating income or loss for each segment does not include corporate general and administrative expenses, interest expense and other miscellaneous income and expense items. Corporate general and administrative expenses include, but are not limited to: human resources, corporate legal, finance, information technology, and other corporate level related expenses, which are not allocated to any segment. The accounting policies of our segments are the same as those described in Note A above and in the consolidated financial statements included in our 2016 Annual Report.

Our operating results by business segment were as follows (in thousands):

	Three Months Ended September 30,
	201 6		201 5
Net Sales
Private label contract manufacturing	$	27,379	$	16,265
Patent and trademark licensing		6,688		5,320
Total	$	34,067	$	21,585

	Three Months Ended September 30,
	2016			2015
Income from Operations
Private label contract manufacturing	$	3,314		$	2,060
Patent and trademark licensing		1,900			999
Income from operations of reportable segments		5,214			3,059
Corporate expenses not allocated to segments		(1,678	)		(1,331	)
Total	$	3,536		$	1,728

	September 30, 201 6		June 30, 201 6
Total Assets
Private label contract manufacturing	$	66,768	$	66,375
Patent and trademark licensing		8,339		7,800
	$	75,107	$	74,175

Our private label contract manufacturing products are sold both in the U.S. and in markets outside the U.S., including Europe, Australia and Asia, as well as Canada, Mexico and South Africa. Our primary market outside the U.S. is Europe. Our patent and rademark licensing activities are primarily based in the U.S.

Net sales by geographic region, based on the customers’ location, were as follows (in thousands):

	Three Months Ended September 30,
	201 6		201 5
United States	$	15,225	$	12,793
Markets outside the United States		18,842		8,792
Total net sales	$	34,067	$	21,585

Products manufactured by NAIE accounted for 48% of net sales in markets outside the U.S. for the three months ended September 30, 2016, and 79% for the three months ended September 30, 2015. No products manufactured by NAIE were sold in the U.S. during the three months ended September 30, 2016 and 2015

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Assets and capital expenditures by geographic region, based on the location of the company or subsidiary at which they were located or made, were as follows (in thousands):

	Long-Lived Assets				Total Assets				Capital Expenditures
									Three Months Ended
	September 30, 201 6		June 30, 201 6		September 30, 201 6		June 30, 201 6		September 30, 201 6		September 30, 201 5
United States	$	10,631	$	9,678	$	50,150	$	49,755	$	1,227	$	64
Europe		5,794		5,489		24,957		24,420		489		175
	$	16,425	$	15,167	$	75,107	$	74,175	$	1,716	$	239