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Note 3 - Revenue Recognition
 9 Months Ended
Sep. 30, 2023
Notes to Financial Statements  
Revenue from Contract with Customer [Text Block]

(3)

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. 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 goods 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:

  

2023

    

2022

    

2023

    

2022

  

Products

   $ 98,261     $ 92,860     $ 291,612     $ 251,996  

Tooling and Machinery

     1,431       2,659       2,985       5,984  

Engineering services

     1,092       1,451       3,978       4,575  

Total net sales

   $ 100,784     $ 96,970     $ 298,575     $ 262,555  

 

Contract balances

 

The 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 sheets.

 

The following table presents a roll-forward of contract liabilities activity for the nine-month periods ended September 30, 2023 and 2022 (in thousands):

 

   

Contract Liabilities

  
   

Nine Months Ended
September 30,

 
   

2023

    

2022

  

Deferred revenue - beginning of period

   $ 4,679     $ 4,247  

Increases due to consideration received from customers

     3,169       4,836  

Revenue recognized

     (4,034 )     (4,335 )

Decrease due to sale of Molded Fiber

     -       (575 )

Deferred revenue - end of period

   $ 3,814     $ 4,173  

 

Revenue recognized during the nine month periods ended September 30, 2023 and 2022 from amounts included in deferred revenue at the beginning of the period were approximately $2.4 million and $2.2 million, 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 a roll-forward of contract assets activity for the nine-month periods ended September 30, 2023 and 2022 (in thousands):

 

   

Contract Assets

  
   

Nine Months Ended
September 30,

 
   

2023

    

2022

  

Unbilled receivables - beginning of period

   $ 270     $ 74  

Increases due to revenue recognized, not invoiced to customers

     2,898       3,065  

Decreases due to customer invoicing

     (3,020 )     (2,429 )

Unbilled receivables - end of period

   $ 148     $ 710