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Note 3 - Revenue From Contracts With Customers
 9 Months Ended
Mar. 31, 2020
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

  

March 31, 2020

    

March 31, 2019

  
Electronics   $ 48,069     $ 50,197  
                 
Engraving Services     31,893       34,505  
Engraving Products     3,538       2,630  

Total Engraving

     35,431       37,135  
                 
Engineering Technologies Components     26,730       27,467  
                 
Hydraulics Cylinders and Systems     13,549       15,106  
                 
Refrigeration     14,670       13,539  
Merchandising & Display     7,719       7,645  
Pumps     9,306       9,366  

Total Food Service Equipment

     31,695       30,550  
                 

Total Revenue by Product Line

   $ 155,474     $ 160,455  

 

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

 

   

Nine Months Ended

  

Revenue by Product Line

  

March 31, 2020

    

March 31, 2019

  
Electronics   $ 140,521     $ 154,347  
                 
Engraving Services     103,630       104,159  
Engraving Products     8,488       7,443  

Total Engraving

     112,118       111,602  
                 
Engineering Technologies Components     77,869       71,818  
                 
Hydraulics Cylinders and Systems     38,613       39,758  
                 
Refrigeration     44,834       42,329  
Merchandising & Display     26,234       25,874  
Pumps     24,961       25,461  

Total Food Service Equipment

     96,029       93,664  
                 

Total Revenue by Product Line

   $ 465,150     $ 471,189  

 

 

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

 

   

Three Months Ended

    

Nine Months Ended

  

Net sales

  

March 31, 2020

    

March 31, 2020

  
United States   $ 95,643     $ 282,146  
Asia Pacific     22,583       71,495  
EMEA (1)     33,781       100,543  
Other Americas     3,467       10,966  

Total

   $ 155,474     $ 465,150  

 

(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

  

March 31, 2020

    

March 31, 2019

  
Products and services transferred at a point in time   $ 145,498     $ 151,634  
Products transferred over time     9,976       8,821  

Net Sales

   $ 155,474     $ 160,455  

 

   

Nine Months Ended

  

Timing of Revenue Recognition

  

March 31, 2020

    

March 31, 2019

  
Products and services transferred at a point in time   $ 439,222     $ 449,757  
Products transferred over time     25,928       21,432  

Net Sales

   $ 465,150     $ 471,189  

 

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 March 31, 2020 (in thousands):

 

   

Balance at Beginning of Period

    

Additions

    

Deductions

    

Balance at End of Period

  

Nine months ended March 31, 2020

                                

Contract assets:

                                

Prepaid and other current assets

     8,418       25,683       24,213       9,888  

Contract liabilities:

                                

Customer deposits

     1,358       8,567       7,942       1,983  

 

 

During the three and nine months ended March 31, 2020, we recognized the following revenue as a result of changes in the contract liability balances (in thousands):

 

   

March 31, 2020

  

Revenue recognized in the period from:

  

Three months ended

    

Nine months ended

  
Amounts included in the contract liability balance at the beginning of the period   $1,628     $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.