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Revenue Recognition | 3 Months Ended
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Mar. 31, 2024
Revenue Recognition |
Revenue Recognition | 3. Revenue Recognition ​ The Company is a leading supplier of products and solutions that manage and conserve the flow of fluids and energy into, through and out of buildings in the commercial, industrial and residential markets. For 150 years, the Company has designed and produced valve systems that safeguard and regulate water systems, energy efficient heating and hydronic systems, drainage systems and water filtration technology that helps purify and conserve water. ​ The Company distributes products through four primary distribution channels: wholesale, original equipment manufacturers (“OEMs”), specialty, and do-it-yourself (“DIY”). The Company operates in three geographic segments: Americas, Europe, and Asia-Pacific, Middle East and Africa (“APMEA”). Each of these segments sells similar products, which consist of the following principal product categories: ​
| ● | Residential & commercial flow control and protection—includes products and solutions typically sold into plumbing and hot water applications such as backflow preventers, water pressure regulators, temperature and pressure relief valves, thermostatic mixing valves, leak detection and protection products, commercial washroom solutions and emergency safety products and equipment. Many of our flow control and protection products are now smart and connected enabled, warning of leaks, floods and freeze with alerts to Building Management Systems (“BMS”) and/or personal devices giving our customers greater insight into their water management and the ability to shut off the water supply to avoid waste and mitigate damage.
| ● | HVAC & gas—includes commercial high-efficiency boilers, water heaters and custom heat and hot water solutions, hydronic and electric heating systems for under-floor radiant applications, hydronic pump groups for boiler manufacturers and alternative energy control packages, and flexible stainless steel connectors for natural and liquid propane gas in commercial food service and residential applications. Most of our HVAC products and solutions feature advanced controls enabling customers to easily connect to the BMS for better monitoring, control and operation. HVAC is an acronym for heating, ventilation and air conditioning.
| ● | Drainage & water re-use—includes drainage products and engineered rain water harvesting solutions for commercial, industrial, marine and residential applications, including connected roof drain systems.
| ● | Water quality—includes point-of-use and point-of-entry water filtration, monitoring, conditioning and scale prevention systems for commercial, marine and residential applications.
​ The following table disaggregates revenue, which is presented as net sales in the financial statements, for each reportable segment, by distribution channel and principal product category: ​
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ | ​ | For the first quarter ended March 31, 2024
​ | ​ | ​ | ​ | (in millions) | ​ | ​
Distribution Channel | ​ | Americas | ​ | Europe | ​ | APMEA | ​ | Consolidated
Wholesale | ​ | $ | 272.2 | ​ | $ | 84.0 | ​ | $ | 19.0 | ​ | $ | 375.2
OEM | ​ | ​ | 26.0 | ​ |  | 38.7 | ​ |  | 1.7 | ​ |  | 66.4
Specialty | ​ | ​ | 97.5 | ​ |  | — | ​ |  | 8.1 | ​ |  | 105.6
DIY | ​ |  | 23.1 | ​ |  | 0.6 | ​ |  | — | ​ |  | 23.7
Total | ​ | $ | 418.8 | ​ | $ | 123.3 | ​ | $ | 28.8 | ​ | $ | 570.9
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ | ​ | For the first quarter ended March 31, 2024
​ | ​ | ​ | ​ | (in millions) | ​ | ​
Principal Product Category | ​ | Americas | ​ | Europe | ​ | APMEA | ​ | Consolidated
Residential & Commercial Flow Control | ​ | $ | 273.6 | ​ | $ | 47.2 | ​ | $ | 25.1 | ​ | $ | 345.9
HVAC and Gas Products | ​ | ​ | 85.1 | ​ |  | 52.2 | ​ |  | 2.8 | ​ |  | 140.1
Drainage and Water Re-use Products | ​ | ​ | 33.0 | ​ |  | 22.9 | ​ |  | 0.6 | ​ |  | 56.5
Water Quality Products | ​ |  | 27.1 | ​ |  | 1.0 | ​ |  | 0.3 | ​ |  | 28.4
Total | ​ | $ | 418.8 | ​ | $ | 123.3 | ​ | $ | 28.8 | ​ | $ | 570.9
​
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ | ​ | For the first quarter ended March 26, 2023
​ | ​ | ​ | ​ | (in millions) | ​ | ​
Distribution Channel | ​ | Americas | ​ | Europe | ​ | APMEA | ​ | Consolidated
Wholesale | ​ | $ | 188.8 | ​ | $ | 81.1 | ​ | $ | 18.5 | ​ | $ | 288.4
OEM | ​ | ​ | 23.1 | ​ |  | 46.5 | ​ |  | 1.7 | ​ |  | 71.3
Specialty | ​ | ​ | 90.5 | ​ |  | — | ​ |  | — | ​ |  | 90.5
DIY | ​ |  | 20.8 | ​ |  | 0.7 | ​ |  | — | ​ |  | 21.5
Total | ​ | $ | 323.2 | ​ | $ | 128.3 | ​ | $ | 20.2 | ​ | $ | 471.7
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ | ​ | For the first quarter ended March 26, 2023
​ | ​ | ​ | ​ | (in millions) | ​ | ​
Principal Product Category | ​ | Americas | ​ | Europe | ​ | APMEA | ​ | Consolidated
Residential & Commercial Flow Control | ​ | $ | 194.5 | ​ | $ | 45.5 | ​ | $ | 15.9 | ​ | $ | 255.9
HVAC and Gas Products | ​ | ​ | 78.2 | ​ |  | 62.3 | ​ |  | 3.4 | ​ |  | 143.9
Drainage and Water Re-use Products | ​ | ​ | 22.8 | ​ |  | 19.6 | ​ |  | 0.7 | ​ |  | 43.1
Water Quality Products | ​ |  | 27.7 | ​ |  | 0.9 | ​ |  | 0.2 | ​ |  | 28.8
Total | ​ | $ | 323.2 | ​ | $ | 128.3 | ​ | $ | 20.2 | ​ | $ | 471.7
​ The Company generally considers customer purchase orders, which in some cases are governed by master sales agreements, to represent the contract with a customer. The Company’s contracts with customers are generally for products only and typically do not include other performance obligations such as professional services, extended warranties, or other material rights. In situations where sales are to a distributor, the Company has concluded that its contracts are with the distributor as the Company holds a contract bearing enforceable rights and obligations only with the distributor. As part of its consideration of the contract, the Company evaluates certain factors, including the customer’s ability to pay (or credit risk). For each contract, the Company considers the promise to transfer products, each of which is distinct, to be the identified performance obligation. In determining the transaction price, the Company evaluates whether the price is subject to refund or adjustment to determine the net consideration to which the Company expects to be entitled. As the Company’s standard payment terms are less than one year, the Company has elected not to assess whether a contract has a significant financing component. The Company allocates the transaction price to each distinct product based on its relative standalone selling price. The product price as specified on the purchase order is considered the standalone selling price as it is an observable input which depicts the price as if sold to a similar customer in similar circumstances. Revenue is recognized when control of the product is transferred to the customer (i.e., when the Company’s performance obligation is satisfied), which typically occurs at shipment from the Company’s manufacturing site or distribution center, or delivery to the customer’s named location. In determining whether control has transferred, the Company considers if there is a present right to payment, physical possession and legal title, along with risks and rewards of ownership having transferred to the customer. In certain circumstances, the Company manufactures customized products without alternative use for its customers. However, as these arrangements do not entitle the Company to a right to payment of cost plus a profit for work completed, the Company has concluded that control transfers at the point in time and not over time. ​ At times, the Company receives orders for products to be delivered over multiple dates that may extend across reporting periods. The Company invoices for each delivery upon shipment and recognizes revenues for each distinct product delivered, assuming transfer of control has occurred. As scheduled delivery dates are within one year, under the optional exemption as provided for under ASC 606 (Revenue from Contracts with Customers), revenues allocated to future shipments of partially completed contracts are not disclosed. ​ The Company generally provides an assurance warranty that its products will substantially conform to their published specifications. The Company’s liability is limited to either a credit equal to the purchase price or replacement of the defective part. Returns under warranty have historically been immaterial. The Company does not consider activities related to such warranty, if any, to be a separate performance obligation. For certain of its products, the Company will separately sell extended warranty and service policies to its customers. The Company considers the sale of these policies as separate performance obligations. These policies typically are for periods ranging from one to three years. Payments received are deferred and recognized over the policy period. For all periods presented, the revenue recognized and the revenue deferred under these policies are not material to the consolidated financial statements. ​ The timing of revenue recognition, billings and cash collections from the Company’s contracts with customers can vary based on the payment terms and conditions in the customer contracts. In limited cases, customers will partially prepay for their goods. In addition, there are constraints which cause variability in the ultimate consideration to be recognized. These constraints typically include early payment discounts, volume rebates, rights of return, cooperative advertising, and market development funds. The Company includes these constraints in the estimated transaction price when there is a basis to reasonably estimate the amount of variable consideration. These estimates are based on historical experience, anticipated future performance and the Company’s best judgment at the time. The Company did not recognize any material revenue from obligations satisfied in prior periods. When the timing of the Company’s recognition of revenue is different from the timing of payments made by the customer, the Company recognizes a contract liability (customer payment precedes performance). For all periods presented, the recognized contract liabilities and the associated revenue deferred are not material to the consolidated financial statements. ​ The Company incurs costs to obtain and fulfill a contract; however, the Company has elected to recognize all incremental costs to obtain a contract as an expense when incurred if the amortization period is one year or less. The Company has elected to treat shipping and handling activities performed after the customer has obtained control of the related goods as a fulfillment cost, and the related cost is accrued for in conjunction with the recording of revenue for the goods.

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