Note G - Economic Dependency

9 Months Ended

Mar. 31, 2022

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 March 31,				Nine Months Ended March 31,
	2022		2021		2022		2021
Customer 1	$	13,846	$	23,215	$	40,110	$	72,001
Customer 2		6,773	(a)			22,761		16,288
Customer 3		10,673	(a)			19,795	(a)
Customer 4	(a)			5,811	(a)		(a)
	$	31,292	$	29,026	$	82,666	$	88,289

(a)          Sales were less than 10% of the respective period’s total net sales.

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 March 31,				Nine Months Ended March 31,
	2022		2021		2022		2021
Supplier 1	$	2,946		5,978	$	10,800		15,765
	$	2,946		5,978	$	10,800		15,765

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 51.7% of gross accounts receivable at March 31, 2022 and 64.8% at June 30, 2021. As of March 31, 2022, and at June 30, 2021, we had a receivable balance of $3.4 million related to a former contract manufacturing customer. 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 14.1% of gross accounts receivable at March 31, 2022, and 8.6% of gross accounts receivable at June 30, 2021. Concentrations of credit risk related to the remaining accounts receivable balances are limited due to the number of customers responsible for the remaining accounts receivable.