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Revenues, Trade Accounts Receivable, Contract Assets and Contract Liabilities
 3 Months Ended
Mar. 31, 2023
Operating revenues:  
Revenues, Trade Accounts Receivable, Contract Assets and Contract Liabilities

Note 4. – Revenues, Trade Accounts Receivable, Contract Assets and Contract Liabilities

 

Disaggregation of Total Net Sales

 

The Company disaggregates its sales with customers by the revenue recognition method for its only segment, as the Company believes these factors affect the nature, amount, timing and uncertainty of the Company’s revenue and cash flows.

 

   2023   2022 
   Three months ended 
   March 31, 
   2023   2022 
Fixed price contracts  $29,093   $18,851 
Product sales   173,546    115,697 
Total Revenues  $202,639   $134,548 

 

The following table presents geographical information about revenues:

 

   Three months ended 
   March 31, 
   2023   2022 
Colombia  $5,740   $4,025 
United States   194,839    126,984 
Panama   270    799 
Other   1,790    2,740 
Total Revenues  $202,639   $134,548 

 

Trade Accounts Receivable

 

In the ordinary course of business, we extend credit to customers on a generally non-collateralized basis. The Company maintains an allowance for expected credit losses which is based on management’s assessments of the amount which may become uncollectible in the future and is determined through consideration of our write-off history, specific identification of uncollectible accounts based in part on the customer’s past due balance (based on contractual terms), and consideration of prevailing economic and industry conditions. Uncollectible accounts are written off after repeated attempts to collect from the customer have been unsuccessful.

 

 

Trade accounts receivable consist of the following:

 

   2023   2022
  

March 31,

2023

  

December 31,

2022

 
Trade accounts receivable   167,818    158,974 
Less: Allowance for credit losses   (681)   (577)
Total  $167,137   $158,397 

 

The changes in the allowance for credit losses for the three months ended March 31, 2023, are:

 

  

Three months ended

March 31, 2023

 
Balance at beginning of period  $577 
Provisions for credit losses   914 
Deductions and write-offs, net of foreign currency adjustment   (810)
Balance at end of period  $681 

 

Contract Assets and Liabilities

 

Contract assets represent accumulated incurred costs and earned profits on contracts with customers that have been recorded as sales but have not been billed to customers and are classified as current. In addition, a portion of the amounts billed on certain fixed price contracts are withheld by the customer as a retainage until a final good receipt of the complete project is delivered to the customers satisfaction. Contract liabilities consist of advance payments and billings in excess of costs incurred and deferred revenue, and represent amounts received in excess of sales recognized on contracts. The Company classifies advance payments and billings in excess of costs incurred as current, and deferred revenue as current or non-current based on the expected timing of sales recognition. Contract assets and contract liabilities are determined on a contract-by-contract basis at the end of each reporting period. The non-current portion of contract liabilities is included in long-term liabilities in the Company’s condensed consolidated balance sheets.

 

 

The table below presents the components of net contract assets (liabilities):

 

   March 31, 2023   December 31, 2022 
Contract assets — current  $18,982   $12,610 
Contract assets — non-current   4,415    8,875 
Contract liabilities — current   (58,591)   (49,601)
Contract liabilities — non-current   (11)   (11)
Net contract assets  $(35,205)  $(28,127)

 

The components of contract assets are presented in the table below:

 

   March 31, 2023   December 31, 2022 
Unbilled contract receivables, gross  $6,448   $5,738 
Retainage   16,949    15,747 
Total contract assets   23,397    21,485 
Less: current portion   18,982    12,610 
Contract Assets – non-current  $4,415   $8,875 

 

The components of contract liabilities are presented in the table below:

 

   March 31, 2023   December 31, 2022 
Billings in excess of costs  $18,292    14,724 
Advances from customers on uncompleted contracts   40,310    34,888 
Total contract liabilities   58,602    49,612 
Less: current portion   58,591    49,601 
Contract liabilities – non-current  $11    11 

 

During the three months ended March 31, 2023, the Company recognized $2,945 of sales related to its contract liabilities on January 1, 2023. During the three months ended March 31, 2022, the Company recognized $2,082 of sales related to its contract liabilities on January 1, 2022.

 

Remaining Performance Obligations

 

As of March 31, 2023, the Company had $499.1 million of remaining performance obligations, which represents the transaction price of firm orders minus sales recognized from inception to date. Remaining performance obligations exclude unexercised contract options, verbal commitments, Letters of Intent or written mandates, and potential orders under basic ordering agreements. The Company expects to recognize 100% of sales relating to existing performance obligations within three years, of which $358.1 million are expected to be recognized during the year ending December 31, 2023, $114.6 million during the year ending December 31, 2024 and $26.5 million during the year ending December 31, 2025.