| Revenue |
Note
2 – Revenue
The
Company records revenue net of discounts, which primarily consist of trade promotions, certain customer allowances and early pay discounts.
The
Company excludes sales taxes collected from revenues. Retail-partner based customers are not subject to sales tax.
The
Company’s direct-to-consumer (“DTC”) loyalty program enables customers to accumulate points based on their spending.
A portion of revenue is deferred at the time of sale when points are earned and recognized when the loyalty points are redeemed.
Revenue
channels
The
Company groups its revenue channels into four categories: E-commerce, which includes the sale of product to online retailers such as
Amazon and Chewy; Brick & Mortar, which primarily includes the sale of product to Pet Specialty retailers such as Petco, Pet Supplies
Plus and neighborhood pet stores, as well as to select grocery chains; DTC, which includes the sale of product through the Company’s
website; and International, which includes the sale of product to foreign distribution partners and to select international retailers
(transacted in U.S. dollars).
Information
about the Company’s net sales by revenue channel is as follows (in thousands):
Schedule of Information about Revenue Channels
| |
|
Three
Months Ended
September
30,
|
|
|
Nine
Months Ended
September
30,
|
|
| |
|
2023 |
|
|
2022 |
|
|
2023 |
|
|
2022 |
|
| E-commerce
(1) |
|
$ |
3,180 |
|
|
|
24 |
% |
|
$ |
3,530 |
|
|
|
30 |
% |
|
$ |
10,330 |
|
|
|
32 |
% |
|
$ |
11,035 |
|
|
|
24 |
% |
| Brick
& Mortar (2) |
|
|
2,249 |
|
|
|
17 |
% |
|
|
1,342 |
|
|
|
11 |
% |
|
|
5,669 |
|
|
|
17 |
% |
|
|
9,632 |
|
|
|
21 |
% |
| DTC |
|
|
1,298 |
|
|
|
10 |
% |
|
|
1,371 |
|
|
|
12 |
% |
|
|
4,316 |
|
|
|
13 |
% |
|
|
5,066 |
|
|
|
11 |
% |
| International
(3) |
|
|
6,390 |
|
|
|
49 |
% |
|
|
5,622 |
|
|
|
47 |
% |
|
|
12,575 |
|
|
|
38 |
% |
|
|
19,661 |
|
|
|
44 |
% |
| Net
Sales |
|
$ |
13,117 |
|
|
|
100 |
% |
|
$ |
11,865 |
|
|
|
100 |
% |
|
$ |
32,890 |
|
|
|
100 |
% |
|
$ |
45,394 |
|
|
|
100 |
% |
| (1)
|
The
Company’s E-commerce channel includes two customers that amounted to greater than 10% of the Company’s total net sales
for the three and nine months ended September 30, 2023, and 2022, respectively. These customers had $3.1 million and $10.0 million
of net sales for the three and nine months ended September 30, 2023 and $3.3 million and $10.6 million of net sales during the three
and nine months ended September 30, 2022, respectively. |
| |
|
| (2)
|
The
Company’s Brick & Mortar channel includes $4.3 million of net sales from one customer that amounted to greater than 10%
of the Company’s total net sales for the nine months ended September 30, 2022. None of the Company’s Brick & Mortar
customers represented greater than 10% of net sales during the three months ended September 30, 2022 or during the three and nine
months ended September 30, 2023. |
| |
|
| (3)
|
One
of the Company’s International customers that distributes products in China amounted to greater than 10% of the Company’s
total net sales during the three months and nine months ended September 30, 2023 represented $6.0 million and $11.0 million of net
sales, respectively. One of the Company’s International customers that distributes products in China amounted to greater than
10% of the Company’s total net sales during the three months and nine months ended September 30, 2022 represented $5.3 million
and $16.6 million of net sales, respectively. |
|