G. 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® and SR CarnoSyn® trade names.

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 the allocation of certain corporate level expenses. 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 above and in the consolidated financial statements included in our

2018

Annual Report.

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

	Three Months Ended December 31,				Six Months Ended December 31,
	2018		2017		2018		2017
Net Sales
Private label contract manufacturing	$	31,660	$	29,355	$	62,747	$	51,577
Patent and trademark licensing		4,383		3,980		9,828		9,832
Total Net Sales	$	36,043	$	33,335	$	72,575	$	61,409

	Three Months Ended December 31,						Six Months Ended December 31,
	2018			2017			2018			2017
Income from Operations
Private label contract manufacturing	$	2,853		$	3,385		$	5,999		$	5,641
Patent and trademark licensing		1,475			504			3,276			1,692
Income from operations of reportable segments		4,328			3,889			9,275			7,333
Corporate expenses not allocated to segments		(2,121	)		(1,608	)		(4,344	)		(3,169	)
Total Income from Operations	$	2,207		$	2,281		$	4,931		$	4,164

	December 31 , 2018		June 30, 2018
Total Assets
Private-label contract manufacturing	$	74,685	$	69,037
Patent and trademark licensing		18,145		16,170
	$	92,830	$	85,207

Our private-label contract manufacturing products are sold both in the U.S. and in markets outside the U.S., including Europe, Canada, Australia, New Zealand, and Asia. Our primary markets outside the U.S. are Europe and Asia. Our patent and trademark 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 December 31,				Six Months Ended December 31,
	2018		2017		2018		2017

United States	$	18,549	$	16,426	$	36,195	$	31,620
Markets outside of the United States		17,494		16,909		36,380		29,789
Total	$	36,043	$	33,335	$	72,575	$	61,409

Products manufactured by our Swiss subsidiary ("NAIE") accounted for

90%

of net sales in markets outside the U.S. for the

three

months ended

December 31, 2018,

and

80%

for the

six

months ended

December 31, 2018.

Products manufactured by NAIE accounted for

81%

of net sales in markets outside the U.S. for the

three

months ended

December 31, 2017,

and

79%

for the

six

months ended

December 31, 2017.

products manufactured by NAIE were sold in U.S. markets during the

three

month or

six

month periods ended

December 31, 2018

and

2017.

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
									Six Months Ended
	December 31 , 2018		June 30, 201 8		December 31 , 2018		June 30, 2018		December 31 , 2018		December 31 , 201 7
United States	$	10,831	$	10,887	$	55,162	$	51,562	$	708	$	426
Europe		9,506		8,403		37,668		33,645		1,954		1,669
	$	20,337	$	19,290	$	92,830	$	85,207	$	2,662	$	2,095