. Segment Information

Our business consists of

two

segments for financial reporting purposes. The

two

segments are 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 perf

ormance 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. Transfers of raw materials between segments are recorded at cost.

The accounting policies of our segments are the same as those described in the summary of significant accounting policies in Note A.

Our operating results by business segment for the years

ended

June

were as follows (in thousands):

	201 7		201 6
Net Sales
Private-label contract manufacturing	$	95,024	$	92,420
Patent and trademark licensing		26,922		21,781
Total net sales	$	121,946	$	114,201

	201 7			201 6
Income from Operations
Private-label contract manufacturing	$	8,569		$	12,184
Patent and trademark licensing		7,534			6,153
Income from operations of reportable segments		16,103			18,337
Corporate expenses not allocated to segments		(6,401	)		(6,079	)
Total income from operations	$	9,702		$	12,258

	201 7		201 6
Assets
Private-label contract manufacturing	$	60,489	$	66,375
Patent and trademark licensing		12,122		7,800
Total assets	$	72,611	$	74,175

Our private-label contract manufacturing products are sold both in the U.S. and in markets outside the U.S., including Europe, Canada, Mexico, Australia, South Africa and Asia. Our primary market outside the U.S. is

Europe. Our patent and trademark licensing activities are primarily based in the U.S.

Net sales by geographic region, based on the customers

’ location, for the

two

years ended

June

were as follows (in thousands):

	201 7		201 6
United States	$	63,104	$	50,575
Markets outside the United States		58,842		63,626
Total net sale	$	121,946	$	114,201

Products manufactured by NAIE accounted for

59%

of consolidated net sales in markets outside the U.S. in fiscal

2017

and

61%

in fiscal

2016.

products manufactured by NAIE were sold in the U.S. during the fiscal years ended

June

30,

2017

and

2016.

Assets and capital expenditures by geographic region, based on the location of the company or subsidiary at which they were located or made, for the

two

years ended

June

were as follows (in thousands):

201 7	Long-Lived Assets		Total Assets		Capital Expenditures
United States	$	10,753	$	47,777	$	2,365
Europe		7,383		24,834		2,989
	$	18,136	$	72,611	$	5,354

201 6	Long-Lived Assets		Total Assets		Capital Expenditures
United States	$	9,678	$	49,755	$	6,423
Europe		5,489		24,420		4,018
	$	15,167	$	74,175	$	10,441