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Note 2 - Revenue Recognition
 9 Months Ended
Dec. 31, 2020
Notes to Financial Statements  
Revenue from Contract with Customer [Text Block]

Note 2:

Revenue Recognition

 

The Company generates revenue by selling pet medication products and pet supplies. Certain pet supplies offered on the Company’s website are drop shipped to customers. The Company considers itself the principal in the arrangement because the Company controls the specified good before it is transferred to the customer. Revenue contracts contain one performance obligation, which is delivery of the product; customer care and support is deemed not to be a material right in the contract. The transaction price is adjusted at the date of sale for any applicable sales discounts and an estimate of product returns, which are estimated based on historical patterns, however, this is not considered a key judgment. There are no amounts excluded from variable consideration. Revenue is recognized when control transfers to the customer at the point in time in which shipment of the product occurs. This key judgment is determined as the shipping point represents the point in time in which the Company has a present right to payment, title has transferred to the customer, and the customer has assumed the risks and rewards of ownership. Outbound shipping and handling fees are an accounting policy election, and are included in sales as the Company considers itself the principal in the arrangement given responsibility for supplier selection and discretion over pricing. Shipping costs associated with outbound freight after control over a product has transferred to a customer are an accounting policy election and are accounted for as fulfillment costs and are included in cost of sales.

 

The Company disaggregates revenue in the following two categories: (1) Reorder revenue vs. new order revenue, and (2) Internet revenue vs. contact center revenue. The following table illustrates revenue by various classifications:

 

 

Three Months Ended December 31,

 

Revenue (In thousands)

 

2020

  

%

  

2019

  

%

  

$ Variance

  

% Variance

 
                         

Reorder Sales

 $60,233   91.4% $53,808   89.8% $6,425   11.9%

New Order Sales

  5,663   8.6%  6,107   10.2%  (444)  -7.3%
                         

Total Net Sales

 $65,896   100.0% $59,915   100.0% $5,981   10.0%
                         

Internet Sales

 $54,984   83.4% $50,000   83.5% $4,984   10.0%

Contact Center Sales

  10,912   16.6%  9,915   16.5%  997   10.1%
                         

Total Net Sales

 $65,896   100.0% $59,915   100.0% $5,981   10.0%

 

 

Nine Months Ended December 31,

 

Sales (In thousands)

 

2020

  

%

  

2019

  

%

  

$ Variance

  

% Variance

 
                         

Reorder Sales

 $208,419   87.7% $183,401   87.4% $25,018   13.6%

New Order Sales

  29,117   12.3%  26,438   12.6%  2,679   10.1%
                         

Total Net Sales

 $237,536   100.0% $209,839   100.0% $27,697   13.2%
                         

Internet Sales

 $199,192   83.9% $175,476   83.6% $23,716   13.5%

Contact Center Sales

  38,344   16.1%  34,363   16.4%  3,981   11.6%
                         

Total Net Sales

 $237,536   100.0% $209,839   100.0% $27,697   13.2%

 

Virtually all of the Company’s sales are paid by credit cards and the Company usually receives the cash settlement in two to three banking days. Credit card sales minimize the accounts receivable balances relative to sales. The Company had no material contract asset or contract liability balances as of December 31, 2020 or March 31, 2020.