Note H - Segment Information

9 Months Ended

Mar. 31, 2023

Notes to Financial Statements

Segment Reporting Disclosure [Text Block]

H. 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 of these segments 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 2022 Annual Report.

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

	Three Months Ended March 31,				Nine Months Ended March 31,
	2023		2022		2023		2022
Net Sales
Private label contract manufacturing	$	30,354	$	37,623	$	112,969	$	104,894
Patent and trademark licensing		2,345		4,750		5,152		13,546
Total Net Sales	$	32,699	$	42,373	$	118,121	$	118,440

	Three Months Ended March 31,						Nine Months Ended March 31,
	2023			2022			2023			2022
(Loss) Income from Operations
Private label contract manufacturing	$	(1,243	)	$	3,605		$	6,264		$	10,065
Patent and trademark licensing		790			1,813			1,485			6,206
(Loss) income from operations of reportable segments		(453	)		5,418			7,749			16,271
Corporate expenses not allocated to segments		(2,035	)		(2,144	)		(6,210	)		(6,368	)
Total (Loss) Income from Operations	$	(2,488	)	$	3,274		$	1,539		$	9,903

	March 31, 2023		June 30, 2022
Total Assets
Private-label contract manufacturing	$	113,098	$	115,649
Patent and trademark licensing		30,829		30,354
	$	143,927	$	146,003

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, Mexico, 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 March 31,				Nine Months Ended March 31,
	2023		2022		2023		2022
United States	$	24,254	$	29,382	$	82,995	$	78,279
Markets outside of the United States		8,445		12,991		35,126		40,161
Total	$	32,699	$	42,373	$	118,121	$	118,440

Products manufactured by our Swiss subsidiary ("NAIE") accounted for 81% of net sales in markets outside the U.S. for the three months ended March 31, 2023 and 76% for the nine months ended March 31, 2023. Products manufactured by our Swiss subsidiary ("NAIE") accounted for 85% of net sales in markets outside the U.S. for the three months ended March 31, 2022 and 84% for the nine months ended March 31, 2022.

Long-lived assets by geographic region, based on the location of the company or subsidiary at which they were located or made, were as follows (in thousands):

	March 31, 2023		June 30, 2022
United States	$	54,305	$	43,769
Europe		20,411		22,505
Total Long-Lived Assets	$	74,716	$	66,274

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

	March 31, 2023		June 30, 2022
United States	$	92,149	$	83,443
Europe		51,778		62,560
Total Assets	$	143,927	$	146,003

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):

	Nine Months Ended March 31,
	2023		2022
United States	$	12,983	$	20,766
Europe		256		702
Total Capital Expenditures	$	13,239	$	21,468