Quarterly report pursuant to Section 13 or 15(d)

Note 2 - Revenue Recognition

v3.19.1
Note 2 - Revenue Recognition
9 Months Ended
Mar. 31, 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
March 31, 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
March 31, 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
March 31, 2019
and
June 30, 2018 
were approximately $
11.5
million and
$9.3
million, respectively. Contract liabilities as of
June 30, 2018
subsequently recognized as revenue during the quarter and
nine
month period ended
March 31, 2019 
were approximately
$0.9
 million and
$6.5
million, r
espectively. Contract 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:
 
   
Quarter Ended
March
31
,
   
Nine
Months Ended
March
31,
 
   
201
9
   
201
8
   
201
9
   
201
8
 
Consumables
  $
153,783
    $
139,416
    $
429,340
     
385,164
 
Instruments
   
16,104
     
13,197
     
51,116
     
44,047
 
Services
   
9,565
     
8,362
     
27,027
     
25,400
 
Total product and services revenue, net
   
179,452
     
160,975
    $
507,483
     
454,611
 
Royalty revenues
   
5,409
     
2,998
     
14,858
     
8,128
 
Total revenues, net
  $
184,861
    $
163,973
    $
522,341
     
462,739
 
 
Revenue by geography is as follows:
 
   
Quarter Ended
March
31,
   
Nine Months Ended
March
31,
 
   
201
9
   
201
8
   
201
9
   
201
8
 
United States
  $
98,228
    $
86,447
    $
281,585
    $
246,857
 
EMEA, excluding United Kingdom
   
42,339
     
39,318
     
116,018
     
107,082
 
United Kingdom
   
10,737
     
9,164
     
26,703
     
24,276
 
APAC, excluding Greater China
   
14,943
     
13,107
     
39,990
     
36,439
 
Greater China
   
12,993
     
11,097
     
42,727
     
35,006
 
Rest of World
   
5,621
     
4,840
     
15,318
     
13,079
 
Total revenues, net
  $
184,861
    $
163,973
    $
522,341
    $
462,739