Note

Revenue Recognition

We design, manufacture, market, sell, and maintain quality control instruments and software, consumables, and services driven primarily by the regulatory requirements of niche markets. Our newly acquired division, Biopharmaceutical Development, designs, manufactures, markets, and sells instruments, such as protein synthesizers that are used to process immunoassay samples and related software designed to enhance productivity; consumable chemical solutions and CDs designed for use in testing; and on-demand and long-term service contracts to support customers use of the equipment. The division generates revenue from the same general categories as those we have identified for the rest of our business and recognizes revenue consistently with our policies. Our consumables, such as biological indicator test strips are typically used on a standalone basis; however, some, such as CDs used in protein synthesis and calibration solutions, are also critical to the ongoing use of our instruments. Hardware and software sales, such as medical meters, protein synthesizers, wireless sensor systems, and data loggers are generally driven by our acquisition of new customers, growth of existing customers, or customer replacement of existing equipment. Hardware sales

may

be offered with perpetual or annual software licenses, which in some cases are required for the hardware to function. We evaluate our revenues internally by product line, timing of revenue generation, and the nature of goods and services provided. Typically, discrete revenue is recognized at the shipping point or upon completion of the service, while contracted revenue is recognized over a period of time reflective of the performance obligation period in the applicable contract.

Substantially all of our revenues and related receivables are generated from contracts with customers that are

months or less in duration. For both discrete and contracted revenue, evidence of an arrangement is typically in the form of a formal contract and/or purchase order. Prices are fixed at the time of the order and

price protections or variables are offered. Collectability is reasonably assured through our customer credit and review process, and payment is typically due within

days or less. Revenue is recognized when performance obligations under the terms of the contracts with our customers are satisfied. We expense commission costs as incurred.

Our performance obligations related to the sale of instruments and consumables generally consist of the promise to sell tangible goods to distributors or end users. Ownership of these goods is typically transferred at time of shipment, at which point we have satisfied our performance obligation and we recognize revenue.

Our performance obligations related to services

may

include testing, installation, and/or maintenance of our products, either on-site at our customers’ facilities or in our own calibration laboratories. Performance obligations arise from service contracts when discrete services are contracted in advance and performed at a future time, often at the time of the customer’s choosing. In this case, the performance obligation is satisfied, and revenue is recognized, upon the customer’s acceptance of the completion of the specified work. Alternatively, service revenue

may

be recognized for contracted services or maintenance provided continually over a period of time, and our performance obligations are satisfied by completing any service that is contractually required, if applicable, or simply by the passage of time if

services are required or requested. For contracted services, revenue is recognized on a straight-line basis over the life of the service contract, which is a faithful depiction of these annual service contracts, which

may

not

be invoked.

The following tables present disaggregated revenues for the

three

and

nine

months ended

December 31, 2019

and

three

and

nine

months ended

December 31, 2018

respectively:

	Three Months Ended December 31, 2019
	Sterilization and Disinfection Control		Instruments		Biopharmaceutical Development		Cold Chain Monitoring		Cold Chain Packaging		Total
Discrete Revenues
Consumables	$	9,948	$	781		1,941	$	13	$	229	$	12,912
Hardware and Software		95		6,881		2,571		2,562		--		12,109
Services		360		2,352		656		849		--		4,217
Contracted Revenues
Services		1,216		--		469		732		--		2,417
Total Revenues	$	11,619	$	10,014	$	5,637	$	4,156	$	229	$	31,655

	Three Months Ended December 31, 2018
	Sterilization and Disinfection Control		Instruments		Biopharmaceutical Development		Cold Chain Monitoring		Cold Chain Packaging		Total
Discrete Revenues
Consumables	$	9,853	$	834		--	$	151	$	1,868	$	12,706
Hardware and Software		110		6,417		--		1,980		49		8,556
Services		372		2,090		--		534		135		3,131
Contracted Revenues
Services		1,210		--		--		1,079		--		2,289
Total Revenues	$	11,545	$	9,341	$	--	$	3,744	$	2,052	$	26,682

	Nine Months Ended December 31, 2019
	Sterilization and Disinfection Control		Instruments		Biopharmaceutical Development		Cold Chain Monitoring		Cold Chain Packaging		Total
Discrete Revenues
Consumables	$	30,487	$	2,364		1,941	$	34	$	2,415	$	37,241
Hardware and Software		429		19,282		2,571		6,374		--		28,656
Services		1,301		6,872		656		1,959		27		10,815
Contracted Revenues
Services		3,606		--		469		2,692		--		6,767
Total Revenues	$	35,823	$	28,518	$	5,637	$	11,059	$	2,442	$	83,479

	Nine Months Ended December 31, 2018
	Sterilization and Disinfection Control		Instruments		Biopharmaceutical Development		Cold Chain Monitoring		Cold Chain Packaging		Total
Discrete Revenues
Consumables	$	29,478	$	2,272		--	$	351	$	5,139	$	37,240
Hardware and Software		487		18,039		--		4,951		105		23,582
Services		884		6,465		--		1,507		277		9,133
Contracted Revenues
Services		3,626		--		--		3,108		--		6,734
Total Revenues	$	34,475	$	26,776	$	--	$	9,917	$	5,521	$	76,689

Revenues from external customers are attributed to individual countries based upon locations to which the product is shipped or exported, as follows:

	Three Months Ended December 31,				Nine Months Ended December 31,
	2019		2018		2019		2018
United States	$	17,810	$	17,003	$	48,007	$	49,167
Foreign		13,845		9,679		35,472		27,522
Total revenues	$	31,655	$	26,682	$	83,479	$	76,689

foreign country exceeds

10%

of total revenues.

Contract Balances

Our contracts have varying payment terms and conditions. Some customers prepay for services, resulting in unearned revenues or customer deposits, called contract liabilities, which are included within other accrued expenses and unearned revenues in the accompanying Condensed Consolidated Balance Sheets. Contract assets would exist when sales are recorded (i.e. the control of the goods or services has been transferred to the customer), but customer payment is contingent on a future event besides the passage of time (such as satisfaction of additional performance obligations). We do

not

have any contract assets. Unbilled receivables, which are

not

classified as contract assets, represent arrangements in which sales have been recorded prior to billing and right to payment is unconditional.

A summary of contract liabilities is as follows:

Contract liabilities balance as of March 31, 2019	$	4,426
Prior year liabilities recognized in revenues during the nine months ended December 31, 2019		(4,432	)
Contract liabilities added during the nine months ended December 31, 2019, net of revenues recognized		6,834
Contract liabilities balance as of December 31, 2019	$	6,828