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Note 3 - Revenue From Contracts With Customers

6 Months Ended

Dec. 31, 2019

Notes to Financial Statements

Revenue from Contract with Customer [Text Block]

3) Revenue From Contracts With Customers

Effective July 1, 2018, the Company adopted the new accounting standard, ASU No. 2014-09, “Revenue from Contracts with Customers” (ASC 606) using the modified retrospective method to contracts that were not completed as of June 30, 2018. The adoption of ASC 606 represents a change in accounting principle that provides enhanced revenue recognition disclosures.

Most of the Company’s contracts have a single performance obligation which represents the product or service being sold to the customer. Some contracts include multiple performance obligations such as a product and the related installation and/or extended warranty. Additionally, most of the Company’s contracts offer assurance type warranties in connection with the sale of a product to customers. Assurance type warranties provide a customer with assurance that the product complies with agreed-upon specifications. Assurance type warranties do not represent a separate performance obligation.

In general, the Company recognizes revenue at the point in time control transfers to its customer based on predetermined shipping terms. Revenue recognized under long-term contracts within the Engineering Technologies group for highly customized customer products that have no alternative use and in which the contract specifies the Company has a right to payment for its costs, plus a reasonable margin are recognized over time. For products manufactured over time, the transfer of control is measured pro rata, based upon current estimates of costs to complete such contracts. Losses on contracts are fully recognized in the period in which the losses become determinable. Revisions in profit estimates are reflected on a cumulative basis in the period in which the basis for such revision becomes known.

Disaggregation of Revenue from Contracts with Customers

The following table presents revenue disaggregated by product line and segment (in thousands):

		*Three Months Ended*
Revenue by Product Line		*December 31, 2019*				*December 31, 2018*
Engraving Services			35,671				35,796
Engraving Products			2,585				2,689
Total Engraving			38,256				38,485

Electronics			45,834				52,700

Engineering Technologies Components			26,495				23,568

Hydraulics Cylinders and Systems			11,316				12,116

Refrigeration		$	52,274			$	52,217
Merchandising & Display			8,692				9,065
Pumps			7,718				7,371
Total Food Service Equipment			68,684				68,653

Total Revenue by Product Line		$	190,585			$	195,522

The following table presents revenue disaggregated by product line and segment (in thousands):

		*Six Months Ended*
Revenue by Product Line		*December 31, 2019*				*December 31, 2018*
Engraving Services			71,737				69,653
Engraving Products			4,950				4,813
Total Engraving			76,687				74,466

Electronics			92,452				104,150

Engineering Technologies Components			51,139				44,351

Hydraulics Cylinders and Systems			25,064				24,651

Refrigeration		$	107,407			$	106,664
Merchandising & Display			18,515				18,229
Pumps			15,759				16,098
Total Food Service Equipment			141,681				140,991

Total Revenue by Product Line		$	387,023			$	388,609

The following table presents revenue from continuing operations disaggregated by geography based on company’s locations (in thousands):

		*Three Months Ended*				*Six Months Ended*
Net sales		*December 31, 2019*				*December 31, 2019*
United States		$	129,126			$	263,419
Asia Pacific			24,560				48,906
EMEA (1)			32,462				66,762
Other Americas			4,437				7,936
Total		$	190,585			$	387,023

⁽¹⁾ EMEA consists primarily of Europe, Middle East and S. Africa.

The following table presents revenue from continuing operations disaggregated by timing of recognition (in thousands):

		*Three Months Ended*
Timing of Revenue Recognition		*December 31, 2019*				*December 31, 2018*
Products and services transferred at a point in time		$	181,117			$	188,093
Products transferred over time			9,468				7,429
Net Sales		$	190,585			$	195,522

		*Six Months Ended*
Timing of Revenue Recognition		*December 31, 2019*				*December 31, 2018*
Products and services transferred at a point in time		$	371,071			$	375,998
Products transferred over time			15,952				12,611
Net Sales		$	387,023			$	388,609

Contract Balances

Contract assets represent sales recognized in excess of billings related to work completed but not yet shipped for which revenue is recognized over time. Contract assets are recorded as prepaid and other current assets. Contract liabilities are customer deposits for which revenue has not been recognized. Current contract liabilities are recorded as accrued expenses.

The following table provides information about contract assets and liability balances as of December 31, 2019 (in thousands):

		*Balance at Beginning of Period*				*Additions*				*Deductions*				*Balance at End of Period*
Six months ended December 31, 2019
Contract assets:
Prepaid and other current assets			8,418				15,670				15,956				8,132
Contract liabilities:
Customer deposits			1,358				6,154				5,884				1,628

During the three and six months ended December 31, 2019, we recognized the following revenue as a result of changes in the contract liability balances (in thousands):

		*December 31, 2019*
Revenue recognized in the period from:		*Three months ended*				*Six months ended*
Amounts included in the contract liability balance at the beginning of the period		$	24			$	1,358

The timing of revenue recognition, invoicing and cash collections results in billed receivables, contract assets and contract liabilities on the consolidated balance sheets. When consideration is received from a customer prior to transferring goods or services to the customer under the terms of a contract, a contract liability is recorded. Contract liabilities are recognized as revenue after control of the goods and services are transferred to the customer and all revenue recognition criteria have been met.