Note G - Economic Dependency

6 Months Ended

Dec. 31, 2020

Notes to Financial Statements

Concentration Risk Disclosure [Text Block]

G

. Economic Dependency

We had substantial net sales to certain customers during the periods shown in the following table. The loss of any of these customers, or a significant decline in (i) sales to these customers, (ii) the growth rate of sales to these customers, or (iii) these customers' ability to make payments when due, each individually could have a material adverse impact on our net sales and net income. Net sales to any

one

customer representing

10%

or more of the respective period's consolidated net sales were as follows (in thousands):

	Three Months Ended December 31,				Six Months Ended December 31,
	2020		2019		2020		2019
Customer 1	$	24,827	$	12,422	$	48,785	$	26,776
Customer 2		8,910		5,539		11,716		9,509
	$	33,737	$	17,961	$	60,501	$	36,285

We buy certain products, including beta-alanine, from a limited number of raw material suppliers who meet our quality standards. The loss of any of these suppliers could have a material adverse impact on our net sales and net income. Raw material purchases from any

one

supplier representing

10%

or more of the respective period's total raw material purchases were as follows (dollars in thousands):

	Three Months Ended December 31,				Six Months Ended December 31,
	2020		2019		2020		2019
Supplier 1	$	6,412		1,734	$	9,787		3,227
	$	6,412		1,734	$	9,787		3,227

Financial instruments that subject us to concentrations of credit risk consist primarily of cash and cash equivalents and accounts receivable. We place our cash and cash equivalents with highly rated financial institutions. Credit risk with respect to receivables is concentrated with

two

of our largest customers, whose receivable balances collectively represented

59.0%

of gross accounts receivable at

December 31, 2020

and

65.7%

at

June 

30,

2020.

As of

December 31, 2020

and

June 30, 2020,

we had a receivable balance of

$3.3

million from a former contract manufacturing customer that we have recorded a bad debt reserve equal to

100%

of this outstanding balance and thus did

not

reflect it in the percentages listed above. Additionally, amounts due related to our beta-alanine raw material sales were

4.5%

of gross accounts receivable at

December 31, 2020,

and

2.5%

of gross accounts receivable at

June 30, 2020.

Concentrations of credit risk related to the remaining accounts receivable balances are limited due to the number of customers comprising our remaining customer base.