Revenue Recognition

On July 1, 2018, the Company adopted ASU 2014-09, using the modified retrospective method for all contracts not completed as of the date of adoption. Adoption of ASU 2014-09 did not have a material effect on the results of operations, financial position or cash flows of the Company. See Note 2.

The Company’s primary sources of revenue are sales of coffee, tea and culinary products. The Company recognizes revenue when control of the promised good or service is transferred to the customer and in amounts that the Company expects to collect. The timing of revenue recognition takes into consideration the various shipping terms applicable to the Company’s sales.

The Company delivers products to customers primarily through two methods, DSD to the Company’s customers at their place of business and direct ship from the Company’s warehouse to the customer’s warehouse or facility. Each delivery or shipment made to a third party customer is to satisfy a performance obligation. Performance obligations generally occur at a point in time and are satisfied when control of the goods passes to the customer. The Company is entitled to collection of the sales price under normal credit terms in the regions in which it operates.

ASC Topic 606, “Revenue from Contracts with Customers” (“ASC Topic 606”), provides certain practical expedients in order to ease the burden of implementation. The Company elected to apply the practical expedient related to applying the guidance to a portfolio of contracts with similar characteristics as the Company does not expect the effects on its consolidated financial statements to differ materially from applying the guidance to the individual contracts within that portfolio. For customers that have executed substantially similar contracts, including the ones utilizing our standard forms, the Company believes that evaluation of these contracts on an individual basis would not result in a material difference. Therefore, the Company has adopted the practical expedient and applied one accounting treatment to all such contracts.

In accordance with ASC Topic 606, the Company disaggregates net sales from contracts with customers based on the characteristics of the products sold:



	For the Years Ended June 30,
	2019				2018				2017
(In thousands)	$		% of total		$		% of total		$		% of total
Net Sales by Product Category:
Coffee (Roasted)	$	378,583	63.5	%	$	379,951	62.6	%	$	339,358	62.7	%
Coffee (Frozen Liquid)	34,541		5.8	%	34,794		5.7	%	32,827		6.1	%
Tea (Iced & Hot)	33,109		5.6	%	32,477		5.4	%	29,256		5.4	%
Culinary	64,100		10.8	%	64,432		10.6	%	55,592		10.3	%
Spice	24,101		4.0	%	25,150		4.2	%	24,895		4.6	%
Other beverages(1)	58,367		9.8	%	66,699		11.0	%	56,653		10.4	%
Net sales by product category	592,801		99.5	%	603,503		99.5	%	538,581		99.5	%
Fuel surcharge	3,141		0.5	%	3,041		0.5	%	2,919		0.5	%
Net sales	$	595,942	100.0	%	$	606,544	100.0	%	$	541,500	100.0	%

____________

(1) Includes all beverages other than roasted coffee, frozen liquid coffee, and iced and hot tea, including cappuccino, cocoa, granitas, and concentrated and ready-to drink cold brew and iced coffee.

The Company does not have any material contract assets and liabilities as of June 30, 2019. Receivables from contracts with customers are included in “Accounts receivable, net” on the Company’s condensed consolidated balance sheets. At June 30, 2019, 2018 and 2017, “Accounts receivable, net” included, $53.6 million, $54.5 million and $44.5 million, respectively, in receivables from contracts with customers.