Note 2 - Revenue Recognition

9 Months Ended

Dec. 31, 2021

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 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.

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)	2021		%			2020		%			$ Variance			% Variance
Reorder Sales	$	56,307		92.7	%	$	60,233		91.4	%	$	(3,926	)		-6.5	%
New Order Sales		4,410		7.3	%		5,663		8.6	%		(1,253	)		-22.1	%
Total Net Sales	$	60,717		100.0	%	$	65,896		100.0	%	$	(5,179	)		-7.9	%
Internet Sales	$	51,305		84.5	%	$	54,984		83.4	%	$	(3,679	)		-6.7	%
Contact Center Sales		9,412		15.5	%		10,912		16.6	%		(1,500	)		-13.7	%
Total Net Sales	$	60,717		100.0	%	$	65,896		100.0	%	$	(5,179	)		-7.9	%

Nine Months Ended December 31,
Sales (In thousands)	2021		%			2020		%			$ Variance			% Variance
Reorder Sales	$	189,260		91.2	%	$	208,419		87.7	%	$	(19,159	)		-9.2	%
New Order Sales		18,155		8.8	%		29,117		12.3	%		(10,962	)		-37.6	%
Total Net Sales	$	207,415		100.0	%	$	237,536		100.0	%	$	(30,121	)		-12.7	%
Internet Sales	$	173,713		83.8	%	$	199,192		83.9	%	$	(25,479	)		-12.8	%
Contact Center Sales		33,702		16.2	%		38,344		16.1	%		(4,642	)		-12.1	%
Total Net Sales	$	207,415		100.0	%	$	237,536		100.0	%	$	(30,121	)		-12.7	%

Virtually all of the Company’s sales are paid by credit cards and the Company usually receives the cash settlement in 2 to 3 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, 2021 or March 31, 2021.