Note 2 - Revenue Recognition

6 Months Ended

Sep. 30, 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 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 September 30,
Sales (In thousands)	2020		%			2019		%			$ Variance			% Variance
Reorder Sales	$	67,761		89.8	%	$	61,851		88.4	%	$	5,910			9.6	%
New Order Sales		7,675		10.2	%		8,085		11.6	%		(410	)		-5.1	%
Total Net Sales	$	75,436		100.0	%	$	69,936		100.0	%	$	5,500			7.9	%
Internet Sales	$	62,697		83.1	%	$	58,453		83.6	%	$	4,244			7.3	%
Contact Center Sales		12,739		16.9	%		11,483		16.4	%		1,256			10.9	%
Total Net Sales	$	75,436		100.0	%	$	69,936		100.0	%	$	5,500			7.9	%

Six Months Ended September 30,
Sales (In thousands)	2020		%			2019		%			$ Variance		% Variance
Reorder Sales	$	148,186		86.3	%	$	129,593		86.4	%	$	18,593		14.3	%
New Order Sales		23,454		13.7	%		20,331		13.6	%		3,123		15.4	%
Total Net Sales	$	171,640		100.0	%	$	149,924		100.0	%	$	21,716		14.5	%
Internet Sales	$	144,208		84.0	%	$	125,476		83.7	%	$	18,732		14.9	%
Contact Center Sales		27,432		16.0	%		24,448		16.3	%		2,984		12.2	%
Total Net Sales	$	171,640		100.0	%	$	149,924		100.0	%	$	21,716		14.5	%

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 September 30, 2020 or March 31, 2020.