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Note 2 - Revenue Recognition
 3 Months Ended
Mar. 31, 2020
Notes to Financial Statements  
Revenue from Contract with Customer [Text Block]
(
2
)
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 (
1
) identifying the contract with a customer, (
2
) identifying separate performance obligations within the contract, (
3
) determining the transaction price, (
4
) allocating the transaction price to the performance obligations, and (
5
) 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, with the exception of certain tooling where control does
not
transfer to the customer, resulting 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. The Company recognizes revenue from bill and hold transactions at the time the specified goods are complete and available to the customer. In the ordinary course of business, the Company accepts sales returns from customers for defective goods, such amounts being immaterial. 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 our customers (in thousands):
 
    Three Months Ended
    March 31,
Net sales of:   2020   2019
Products   $
47,029
     $
46,410
  
Tooling and Machinery    
677
      
645
  
Engineering services    
571
      
273
  
Total net sales   $
48,277
     $
47,328
  
 
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
three
months ended
March 31, 2020
and
2019
(in thousands):
 
    Contract Liabilities
    Three Months Ended
March 31,
    2020   2019
Deferred revenue - beginning of period   $
2,574
     $
2,507
  
Increases due to consideration received from customers    
525
      
991
  
Revenue recognized    
(667
 )    
(526
 )
Deferred revenue - end of period   $
2,432
     $
2,972
  
 
Revenue recognized during the
three
months ended
March 31, 2020
and
2019
from amounts included in deferred revenue at the beginning of the period was approximately
$517
thousand and
$497
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 Company considered the guidance in ASC
326
upon adoption and in the current period and determined that an allowance for credit losses was
not
necessary on the unbilled receivables balance due to there being
no
history of credit losses. The following table presents opening and closing balances of contract assets for the
three
months ended
March 31, 2020
and
2019
(in thousands):
 
    Contract Assets
    Three Months Ended
March 31,
    2020   2019
Unbilled Receivables - beginning of period   $
72
     $
65
  
Increases due to revenue recognized - not invoiced to customers    
522
      
85
  
Decreases due to customer invoicing    
(404
 )    
(106
 )
Unbilled Receivables - end of period   $
190
     $
44