Note 11 - Segment Information

6 Months Ended

Jun. 30, 2025

Notes to Financial Statements

Segment Reporting Disclosure [Text Block]

11. SEGMENT INFORMATION

The Company sells products to a member network that operates in a seamless manner from market to market, except for the China market where it sells to some consumers through an e-commerce retail platform, and the Russia and Kazakhstan market where the Company’s engagement of a third-party service provider results in a different economic structure than its other markets. The Company believes that all of its other operating segments have similar economic characteristics and are similar in the nature of the products sold, the product acquisition process, the types of customers products are sold to, the methods used to distribute the products, and the nature of the regulatory environment. Therefore, the Company aggregates its other operating segments (including its Hong Kong operating segment) into a single reporting segment (the “Primary Reporting Unit”).

The Company’s CODM is its President, who reviews financial information presented on a geographic basis. The CODM primarily uses net sales, gross profit and operating profit in assessing segment performance and determining the allocation of resources. The CODM also uses gross profit for evaluating pricing strategy. The CODM is the primary individual in control of resource allocation, and the allocation determinations are generally made in consultation with senior management, which the CODM is a member. Segment operating income is adjusted for certain direct costs and commission allocations. The CODM also regularly reviews inventory information by operating segment in assessing segment performance and determining the allocation of resources.

The Company’s financial information by segment is as follows (in thousands):

	Three Months Ended June 30, 2025											Three Months Ended June 30, 2024
	Primary Reporting Unit		China			Russia and Kazakhstan			Total			Primary Reporting Unit		China			Russia and Kazakhstan			Total
Net sales	$	9,493	$	219		$	101		$	9,813		$	10,023	$	336		$	116		$	10,475
Cost of sales		2,450		51			57			2,558			2,574		65			60			2,699
Gross profit		7,043		168			44			7,255			7,449		271			56			7,776
Less:
Commissions expense1		3,973		—			39			4,012			4,157		—			46			4,203
Employee-related costs		897		220			14			1,131			886		216			9			1,111
Facility costs		294		36			3			333			292		40			4			336
Other segment items2		319		81			12			412			404		91			14			509
Segment income (loss) from operations	$	1,560	$	(169	)	$	(24	)		1,367		$	1,710	$	(76	)	$	(17	)		1,617
Reconciliation of income before income taxes:
Unallocated corporate expenses										(1,700	)										(1,855	)
Other income, net										348											519
Income before income taxes									$	15										$	281

	Six Months Ended June 30, 2025											Six Months Ended June 30, 2024
	Primary Reporting Unit		China			Russia and Kazakhstan			Total			Primary Reporting Unit		China			Russia and Kazakhstan			Total
Net sales	$	19,899	$	453		$	198		$	20,550		$	20,489	$	720		$	217		$	21,426
Cost of sales		5,177		99			114			5,390			5,364		138			109			5,611
Gross profit		14,722		354			84			15,160			15,125		582			108			15,815
Less:
Commissions expense1		8,408		—			92			8,500			8,585		—			104			8,689
Employee-related costs		1,738		453			26			2,217			1,826		474			25			2,325
Facility costs		579		71			6			656			589		82			8			679
Other segment items2		764		145			24			933			789		196			28			1,013
Segment income (loss) from operations	$	3,233	$	(315	)	$	(64	)		2,854		$	3,336	$	(170	)	$	(57	)		3,109
Reconciliation of income before income taxes:
Unallocated corporate expenses										(3,532	)										(3,712	)
Other income, net										813											1,082
Income before income taxes									$	135										$	479

¹ Our China subsidiary maintains an e-commerce retail platform and does not pay commissions.

² Other segment items include credit card fees and assessments, marketing-related costs, professional fees and other business expenses.

The Company's segment assets are as follows (in thousands):

	June 30, 2025								December 31, 2024
	Primary Reporting Unit		China		Russia and Kazakhstan		Total		Primary Reporting Unit		China		Russia and Kazakhstan		Total
Inventories	$	1,914	$	165	$	67	$	2,146	$	2,422	$	159	$	36	$	2,617
Other inventories and inventory-related deposits1								760								971
Other assets2								42,256								51,771
Total assets							$	45,162							$	55,359

¹ Other inventories and inventory-related deposits pertain to the Company's trading company and are not specific to any of the Company's operating segments.

² Other assets primarily include cash, cash equivalents and marketable securities, but also includes all other current and noncurrent assets.

The Company’s net sales by geographic area are as follows (in thousands):

	Three Months Ended June 30,				Six Months Ended June 30,
	2025		2024		2025		2024
Net sales from external customers:
United States	$	299	$	263	$	585	$	525
Canada		130		142		231		253
Peru and Colombia		320		284		569		504
Hong Kong1		8,004		8,468		17,127		17,642
China		219		336		453		720
Taiwan		396		486		718		823
Japan		82		55		146		121
Malaysia and Singapore		82		66		132		119
Russia and Kazakhstan		101		116		198		217
Europe		120		157		270		309
Other foreign countries		60		102		121		193
Total net sales	$	9,813	$	10,475	$	20,550	$	21,426

¹ Substantially all of the Company's Hong Kong revenues are derived from the sale of products that are delivered to members in China. See “Item 1A. Risk Factors” in our most recent Annual Report on Form 10-K.