Accounts Receivable, net

9 Months Ended

Mar. 31, 2023

Accounts Receivable, net

Accounts Receivable, net

Note 5. Accounts Receivable, net

Accounts receivable, net consisted of the following components at March 31, 2023 and June 30, 2022:

	March 31,		June 30,
(In thousands)	2023		2022
Gross accounts receivable	$	180,873	$	199,242
Less: Chargebacks reserve		(48,532)		(54,501)
Less: Rebates reserve		(14,969)		(26,921)
Less: Returns reserve		(35,690)		(46,478)
Less: Other deductions		(12,580)		(14,117)
Less: Allowance for expected credit losses		(949)		(984)
Accounts receivable, net	$	68,153	$	56,241

For the three months ended March 31, 2023, the Company recorded a provision for chargebacks, rebates (including rebates presented as rebates payable), returns and other deductions of $95.5 million, $22.2 million, $6.6 million and $6.7 million, respectively. For the three months ended March 31, 2022, the Company recorded a provision for chargebacks, rebates (including rebates presented as rebates payable), returns and other deductions of $93.8 million, $22.1 million, $12.7 million and $11.9 million, respectively.

For the nine months ended March 31, 2023, the Company recorded a provision for chargebacks, rebates (including rebates presented as rebates payable), returns and other deductions of $276.4 million, $69.5 million, $20.2 million and $20.7 million, respectively. For the nine months ended March 31, 2022, the Company recorded a provision for chargebacks, rebates (including rebates presented as rebates payable), returns and other deductions of $339.7 million, $77.4 million, $26.0 million and $38.6 million, respectively.

The following table identifies the activity and ending balances of each major category of revenue-related reserve for the nine months ended March 31, 2023 and 2022:

Reserve Category
(In thousands)	Chargebacks		Rebates		Returns		Other		Total
Balance at June 30, 2022	$	54,501	$	48,489	$	46,478	$	14,117	$	163,585
Current period provision		276,392		69,483		20,195		20,677		386,747
Credits issued during the period		(282,361)		(89,578)		(30,983)		(22,214)		(425,136)
Balance at March 31, 2023	$	48,532	$	28,394	$	35,690	$	12,580	$	125,196

Reserve Category
(In thousands)	Chargebacks		Rebates		Returns		Other		Total
Balance at June 30, 2021	$	69,564	$	35,297	$	38,395	$	15,505	$	158,761
Current period provision		339,663		77,352		25,979		38,625		481,619
Credits issued during the period		(350,626)		(67,975)		(22,397)		(37,985)		(478,983)
Balance at March 31, 2022	$	58,601	$	44,674	$	41,977	$	16,145	$	161,397

For the three months ended March 31, 2023 and 2022, as a percentage of gross sales the provision for chargebacks was 47.1% and 43.4%, the provision for rebates was 10.9% and 10.2%, the provision for returns was 3.3% and 5.9% and the provision for other adjustments was 3.3% and 5.5%, respectively.

For the nine months ended March 31, 2023 and 2022, as a percentage of gross sales the provision for chargebacks was 45.7% and 45.9%, the provision for rebates was 11.5% and 10.5%, the provision for returns was 3.3% and 3.5% and the provision for other adjustments was 3.4% and 5.2%, respectively.

The decrease in the reserve for chargebacks from June 30, 2022 to March 31, 2023 was primarily attributable to changes in product and customer sales mix. Additionally, the reserve for rebates and returns decreased during the first six months of Fiscal 2023 due to the timing of payments. Higher than average returns in prior periods also contributed to the decrease in the reserve for returns during the period.