(

)

Revenue Recognition

The Company recognizes revenue when a customer obtains control of a promised good or service. The amount of revenue recognized reflects the consideration that the Company expects to be entitled to in exchange for promised goods or services. The Company recognizes revenue in accordance with the core principles of ASC

606

which include (

) identifying the contract with a customer, (

) identifying separate performance obligations within the contract, (

) determining the transaction price, (

) allocating the transaction price to the performance obligations, and (

) recognizing revenue. The Company recognizes all but an immaterial portion of its product sales upon shipment. The Company recognizes revenue from the sale of tooling and machinery primarily upon customer acceptance, except for certain tooling where control does

not

transfer to the customer, which results in revenue being recognized over the estimated time for which parts are produced with the use of each respective tool. The Company recognizes revenue from engineering services as the services are performed. Although only applicable to an insignificant number of transactions, the Company has elected to exclude sales taxes from the transaction price. The Company has elected to account for shipping and handling activities for which the Company is responsible under the terms and conditions of the sale

not

as performance obligations but rather as fulfillment costs. These activities are required to fulfill the Company’s promise to transfer the good and are expensed when revenue is recognized.

Disaggregated Revenue

The following table presents the Company’s revenue disaggregated by the major types of goods and services sold to the Company’s customers (in thousands):

	Three Months Ended				Nine Months Ended
	September 30,				September 30,
Net sales of:	2019		2018		2019		2018
Products	$	47,400	$	46,423	$	144,386	$	135,670
Tooling and machinery		952		537		1,920		2,135
Engineering services		1,042		848		1,814		1,953
Total net sales	$	49,394	$	47,808	$	148,120	$	139,758

Contract balances

Timing of revenue recognition

may

differ from the timing of invoicing to customers. When invoicing occurs prior to revenue recognition, the Company has deferred revenue, or contract liabilities, included within “deferred revenue” on the condensed consolidated balance sheet.

The following table presents opening and closing balances of contract liabilities for the

nine

-month periods ended

September

30,

2019

and

2018

(in thousands):

	Contract Liabilities
	Nine Months Ended September 30,
	2019			2018
Deferred revenue - beginning of period	$	2,507		$	871
Acquired in Dielectrics business combination		-			2,175
Increases due to consideration received from customers		2,256			3,088
Revenue recognized		(2,231	)		(2,216	)
Deferred revenue - end of period	$	2,532		$	3,918

Revenue recognized during the

nine

-month periods ended

September 30, 2019

and

2018

from amounts included in deferred revenue at the beginning of the period were approximately

$1.3

million and

$527

thousand, respectively.

When invoicing occurs after revenue recognition, the Company has unbilled receivables (contract assets) included within “receivables” on the condensed consolidated balance sheet.

The following table presents opening and closing balances of contract assets for the

nine

-month periods ended

September

30,

2019

and

2018

(in thousands):

	Contract Assets
	Nine Months Ended September 30,
	2019			2018
Unbilled Receivables - beginning of period	$	65		$	-
Increases due to revenue recognized - not invoiced to customers		660			236
Decreases due to customer invoicing		(712	)		(188	)
Unbilled Receivables - end of period	$	13		$	48