Revenue from Contracts with Customers

9 Months Ended

Oct. 03, 2020

Revenue from Contracts with Customers

Revenue from Contracts with Customers

Note J – Revenue from Contracts with Customers

Revenue Recognition – Effective December 31, 2017, we adopted ASC 606. The adoption of this standard did not impact the timing of revenue recognition for customer sales. Revenue is recognized when obligations under the terms of a contract with our customer are satisfied; generally this occurs with the transfer of control of our goods at a point in time based on shipping terms and transfer of title. Revenue is measured as the amount of consideration we expect to receive in exchange for transferring goods. Sales, value add, and other taxes we collect concurrent with revenue-producing activities are excluded from revenue. Shipping and handling fees charged to customers are reported within revenue.

Gross-to-net sales adjustments – We recognize revenue net of various sales adjustments to arrive at net sales as reported on the statement of operations. These adjustments are referred to as gross-to-net sales adjustments and primarily fall into one of three categories; returns, warranties and customer allowances.

Returns – The Company records an accrued liability and reduction in sales for estimated product returns based upon historical experience. An accrued liability and reduction in sales is also recorded for approved return authorizations that have been communicated by the customer.

Warranties – Limited warranties are provided on certain products for varying periods. We record an accrued liability and reduction in sales for estimated future warranty claims based upon historical experience and management’s estimate of the level of future claims. Changes in the estimated amounts recognized in prior years are recorded as an adjustment to the accrued liability and sales in the current year.

Customer Allowances – Customer allowances are common practice in the industries in which the Company operates. These agreements are typically in the form of advertising subsidies, volume rebates and catalog allowances and are accounted for as a reduction to gross sales. The Company reviews such allowances on an ongoing basis and accruals are adjusted, if necessary, as additional information becomes available.

Disaggregation of Revenue – We generate revenue from the sale of widely recognized sporting goods brands in basketball goals, archery, indoor and outdoor game recreation and fitness products. These products are sold through multiple sales channels that include; mass merchants, specialty dealers, key on-line retailers (“E-commerce”) and international. The following table depicts the disaggregation of revenue according to sales channel:

	Three Months Ended				Nine Months Ended
	October 3,		October 5,		October 3,		October 5,
All Amounts in Thousands	2020		2019		2020		2019
Gross Sales by Channel:
Mass Merchants	$	36,234	$	20,757	$	77,418	$	51,025
Specialty Dealers		21,741		11,826		57,666		41,590
E-commerce		25,172		15,712		78,242		50,452
International		2,637		1,880		6,129		5,228
Other		598		637		1,669		2,079
Total Gross Sales		86,382		50,812		221,124		150,374
Less: Gross-to-Net Sales Adjustments
Returns		2,117		1,473		5,538		4,353
Warranties		376		360		1,152		1,092
Customer Allowances		5,820		3,223		15,552		11,432
Total Gross-to-Net Sales Adjustments		8,313		5,056		22,242		16,877
Total Net Sales	$	78,069	$	45,756	$	198,882	$	133,497