Note 2 - Revenue Recognition

3 Months Ended

Jun. 30, 2018

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 mainly to retail customers. 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 to 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

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 June 30,
Revenue (In thousands)	2018		%			2017		%			$ Variance		% Variance
Reorder Sales	$	71,501		81.8	%	$	64,465		80.9	%	$	7,036		10.9	%
New Order Sales		15,889		18.2	%		15,192		19.1	%		697		4.6	%
Total Net Sales	$	87,390		100.0	%	$	79,657		100.0	%	$	7,733		9.7	%
Internet Sales	$	74,320		85.0	%	$	66,647		83.7	%	$	7,673		11.5	%
Contact Center Sales		13,070		15.0	%		13,010		16.3	%		60		0.5	%
Total Net Sales	$	87,390		100.0	%	$	79,657		100.0	%	$	7,733		9.7	%

The majority 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

June 30, 2018

or

March 31, 2018.