Annual report pursuant to Section 13 and 15(d)

Note 2 - Revenue Recognition

v3.19.2
Note 2 - Revenue Recognition
12 Months Ended
Jun. 30, 2019
Notes to Financial Statements  
Revenue from Contract with Customer [Text Block]
Note
2
.
Revenue Recognition:
 
Consumables revenues consist of single-use products and are recognized at a point in time following the transfer of control of such products to the customer, which generally occurs upon shipment. Instruments revenues typically consist of longer-lived assets that, for the substantial majority of sales, are recognized at a point in time in a manner similar to consumables. The vast majority of service revenues consist of extended warranty contracts, post contract support (“PCS”), and custom development projects that are recognized over time as either the customers receive and consume the benefits of such services simultaneously or the underlying asset being developed has
no
alternative use for the Company at contract inception and the Company has an enforceable right to payment for the portion of the performance completed. The remaining service revenues were
not
material to the period and consist of laboratory services recognized at point in time. Given the Company does
not
have significant historical experience collecting payments from Medicare or insurance providers, the Company considered the variable consideration for such services to be constrained as it would
not
be probable that a significant amount of revenue would
not
need to be reversed in future periods for the services provided. Accordingly, the Company did
not
record revenue upon completion of the performance obligation, but rather upon cash receipt, which was subsequent to the performance obligation being satisfied. Royalty revenues are based on net sales of the Company’s licensed products by a
third
party. We recognize royalty revenues in the period the sales occur using 
third
party evidence. The Company has also elected the "right to invoice" practical expedient based on the Company's right to invoice a customer at an amount that approximates the value to the customer and the performance completed to date. 
 
The Company has elected the exemption to
not
disclose the unfulfilled performance obligations for contracts with an original length of
one
year or less and the exemption to exclude future performance obligations that are accounted under the sales-based or usage-based royalty guidance.  The Company's unfulfilled performance obligations were
not
material as of
June 30, 2019. 
 
Contracts with customers that contain instruments
may
include multiple performance obligations. For these contracts, the Company allocates the contract’s transaction price to each performance obligation on a relative standalone selling price basis. Allocation of the transaction price is determined at the contracts’ inception.
 
Payment terms for shipments to end-users are generally net
30
days. Payment terms for distributor shipments
may
range from
30
to
90
days. Service arrangements commonly call for payments in advance of performing the work (e.g. extended warranty and service contracts), upon completion of the service (e.g. custom development manufacturing) or a mix of both.
 
Contract assets include revenues recognized in advance of billings. Contract assets are included within other current assets in the accompanying balance sheet as the amount of time expected to lapse until the company's right to consideration becomes unconditional is less than
one
year. We elected the practical expedient allowing us to expense costs of obtaining contracts less than
one
year that would otherwise be capitalized and amortized over the contract period. Contract assets as of
June 30, 2019
are
not
material.
 
Contract liabilities include billings in excess of revenues recognized, such as those resulting from customer advances and deposits and unearned revenue on warranty contracts. Contract liabilities as of
June 30, 2019
and
June 30, 2018 
were approximately
$10.4
 million and
$9.3
million, respectively. Contract liabilities as of
June 30, 2018
subsequently recognized as revenue during the year ended
June 30, 
2019
 were approximately
$7.0
million
. C
ontract liabilities in excess of
one
year are included in Other long-term liabilities on the balance sheet. 
 
Any claims for credit or return of goods must be made within
10
days of receipt. Revenues are reduced to reflect estimated credits and returns. Although the amounts recorded for these revenue deductions are dependent on estimates and assumptions, historically our adjustments to actual results have
not
been material.
 
Taxes collected from customers relating to product sales and remitted to governmental authorities are excluded from revenue. Amounts billed to customers for shipping and handling are included in revenue, while the related shipping and handling costs are reflected in cost of products. We have elected the practical expedient that allows us to account for shipping and handling activities that occur after the customer has obtained control of a good as a fulfillment cost, and we accrue costs of shipping and handling when the related revenue is recognized.
 
The following tables present our disaggregated revenue for the periods presented.
 
Revenue by type is as follows:
 
   
Year ended June 30,
         
   
2019
   
2018
   
2017
 
Consumables
  $
588,979
    $
534,738
    $
476,541
 
Instruments
   
67,538
     
61,784
     
47,751
 
Services
   
38,050
     
34,137
     
23,652
 
Total product and services revenue, net
   
694,567
    $
630,659
     
547,944
 
Royalty revenues
   
19,439
     
12,334
     
15,059
 
Total revenues, net
  $
714,006
    $
642,993
    $
563,003
 
 
Revenue by geography is as follows:
 
   
Year Ended June 30,
 
   
2019
   
2018
   
2017
 
Net sales:
                       
United States
  $
391,191
    $
346,293
    $
313,195
 
EMEA, excluding U.K.
   
155,821
     
148,599
     
125,126
 
U.K.
   
34,975
     
33,704
     
28,401
 
APAC, excluding Greater China
   
52,913
     
48,392
     
41,463
 
Greater China
   
57,799
     
47,950
     
39,078
 
Rest of world
   
21,307
     
18,055
     
15,740
 
Total external sales
  $
714,006
    $
642,993
    $
563,003