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Note 2 - Revenue Recognition
 3 Months Ended
Mar. 31, 2021
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, which are primarily product development services, as the services are performed or as otherwise determined based on the substance of the agreement. 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 the Company’s customers (in thousands):

 

 

   

Three Months Ended

  
   

March 31,

  

Net sales of:

  

2021

    

2020

  

Products

   $ 47,323     $ 47,029  

Tooling and Machinery

     412       677  

Engineering services

     864       571  

Total net sales

   $ 48,599     $ 48,277  

 

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 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-month periods ended March 31, 2021 and 2020 (in thousands):

 

   

Contract Liabilities

  
   

Three Months Ended
March 31,

 
   

2021

    

2020

  

Deferred revenue - beginning of period

   $ 1,887     $ 2,574  

Increases due to consideration received from customers

     217       525  

Revenue recognized

     (341 )     (667 )

Deferred revenue - end of period

   $ 1,763     $ 2,432  

 

Revenue recognized during the three-month periods ended March 31, 2021 and 2020 from amounts included in deferred revenue at the beginning of the period were approximately $302 thousand and $517 thousand, respectively.

 

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

 

The following table presents opening and closing balances of contract assets for the three-month periods ended March 31, 2021 and 2020 (in thousands):

 

   

Contract Assets

  
   

Three Months Ended
March 31,

 
   

2021

    

2020

  

Unbilled Receivables - beginning of period

   $ 271     $ 72  

Increases due to revenue recognized, not invoiced to customers

     531       522  

Decreases due to customer invoicing

     (578 )     (404 )

Unbilled Receivables - end of period

   $ 224     $ 190