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Revenue
 6 Months Ended
Jun. 30, 2023
Revenue from Contract with Customer [Abstract]  
Revenue

Note 9 – Revenue

 

The Company’s revenues are generated primarily from its manufacturing services, which entails the sale of manufactured products built to customer specifications. The Company also generates revenue from design, development and engineering services, in addition to the sale of other inventory.

Revenue is measured based on the consideration specified in a contract with a customer. The Company recognizes revenue when it satisfies a performance obligation by transferring control over a manufactured product to a customer. The Company’s contracts with customers are generally short-term in nature. The Company applies the optional exemption related to short-term performance obligations and does not disclose information about remaining performance obligations that have original expected durations of one year or less. Customers are generally billed when the product is shipped or as services are performed. Under the majority of the Company’s manufacturing contracts with customers, the customer controls all of the work-in-progress as products are being built. Revenues under these contracts are recognized progressively based on the cost-to-cost method. For other manufacturing contracts, the customer does not take control of the product until it is completed. Under these contracts, the Company recognizes revenue upon transfer of control of the product to the customer, which is generally when goods are shipped. Revenue from design, development and engineering services is recognized over time as the services are performed. As a general matter, the Company assumes no significant obligations after shipment as it typically warrants workmanship only. Therefore, the warranty provisions are generally not significant.

If the Company records revenue, but does not issue an invoice, a contract asset is recognized. The contract asset is transferred to accounts receivable when the entitlement to payment becomes unconditional.

Taxes assessed by governmental authorities that are both imposed on and concurrent with a specific revenue-producing transaction, that are collected by the Company from a customer, are excluded from revenue.

Shipping and handling costs associated with outbound freight after control over a product has transferred to a customer are accounted for as fulfillment costs and are included in cost of sales.

Disaggregation of revenue

In the following tables, revenue is disaggregated by market sector. The tables also include a reconciliation of the disaggregated revenue with the reportable operating segments. Elimination of intersegment sales includes intersegment sales between reportable operating segments.

 

 

 

Reportable Operating Segments

 

 

 

Three Months Ended June 30, 2023

 

(in thousands)

 

Americas

 

 

Asia

 

 

Europe

 

 

Total

 

Market Sector:

 

 

 

 

 

 

 

 

 

 

 

 

Industrials

 

$

38,838

 

 

$

95,378

 

 

$

32,621

 

 

$

166,837

 

A&D

 

 

64,062

 

 

 

8,899

 

 

 

7,203

 

 

 

80,164

 

Medical

 

 

90,210

 

 

 

45,010

 

 

 

9,716

 

 

 

144,936

 

Semi-Cap

 

 

63,070

 

 

 

76,682

 

 

 

24,355

 

 

 

164,107

 

Advanced Computing

 

 

75,072

 

 

 

6,309

 

 

 

—

 

 

 

81,381

 

Next Generation Communications

 

 

52,526

 

 

 

43,271

 

 

 

10

 

 

 

95,807

 

External revenue

 

 

383,778

 

 

 

275,549

 

 

 

73,905

 

 

 

733,232

 

Elimination of intersegment sales

 

 

20,442

 

 

 

11,301

 

 

 

685

 

 

 

32,428

 

Segment revenue

 

$

404,220

 

 

$

286,850

 

 

$

74,590

 

 

$

765,660

 

 

 

 

Six Months Ended June 30, 2023

 

(in thousands)

 

Americas

 

 

Asia

 

 

Europe

 

 

Total

 

Market Sector:

 

 

 

 

 

 

 

 

 

 

 

 

Industrials

 

$

67,886

 

 

$

175,430

 

 

$

67,047

 

 

$

310,363

 

A&D

 

 

130,364

 

 

 

16,822

 

 

 

12,393

 

 

 

159,579

 

Medical

 

 

158,492

 

 

 

99,168

 

 

 

24,325

 

 

 

281,985

 

Semi-Cap

 

 

124,019

 

 

 

141,419

 

 

 

47,138

 

 

 

312,576

 

Advanced Computing

 

 

163,676

 

 

 

13,703

 

 

 

—

 

 

 

177,379

 

Next Generation Communications

 

 

103,915

 

 

 

82,074

 

 

 

56

 

 

 

186,045

 

External revenue

 

 

748,352

 

 

 

528,616

 

 

 

150,959

 

 

 

1,427,927

 

Elimination of intersegment sales

 

 

53,075

 

 

 

26,277

 

 

 

1,486

 

 

 

80,838

 

Segment revenue

 

$

801,427

 

 

$

554,893

 

 

$

152,445

 

 

$

1,508,765

 

 

 

 

Three Months Ended June 30, 2022

 

(in thousands)

 

Americas

 

 

Asia

 

 

Europe

 

 

Total

 

Market Sector:

 

 

 

 

 

 

 

 

 

 

 

 

Industrials

 

$

22,941

 

 

$

100,495

 

 

$

35,400

 

 

$

158,836

 

A&D

 

 

77,803

 

 

 

8,667

 

 

 

3,427

 

 

 

89,897

 

Medical

 

 

86,879

 

 

 

69,459

 

 

 

9,896

 

 

 

166,234

 

Semi-Cap

 

 

68,706

 

 

 

85,978

 

 

 

20,215

 

 

 

174,899

 

Advanced Computing

 

 

57,045

 

 

 

11,591

 

 

 

—

 

 

 

68,636

 

Next Generation Communications

 

 

37,551

 

 

 

31,976

 

 

 

—

 

 

 

69,527

 

External revenue

 

 

350,925

 

 

 

308,166

 

 

 

68,938

 

 

 

728,029

 

Elimination of intersegment sales

 

 

9,350

 

 

 

12,296

 

 

 

912

 

 

 

22,558

 

Segment revenue

 

$

360,275

 

 

$

320,462

 

 

$

69,850

 

 

$

750,587

 

 

 

 

Six Months Ended June 30, 2022

 

(in thousands)

 

Americas

 

 

Asia

 

 

Europe

 

 

Total

 

Market Sector:

 

 

 

 

 

 

 

 

 

 

 

 

Industrials

 

$

41,667

 

 

$

184,953

 

 

$

69,362

 

 

$

295,982

 

A&D

 

 

146,504

 

 

 

15,682

 

 

 

8,898

 

 

 

171,084

 

Medical

 

 

154,858

 

 

 

108,452

 

 

 

19,797

 

 

 

283,107

 

Semi-Cap

 

 

135,029

 

 

 

182,796

 

 

 

40,511

 

 

 

358,336

 

Advanced Computing

 

 

101,671

 

 

 

22,021

 

 

 

—

 

 

 

123,692

 

Next Generation Communications

 

 

65,065

 

 

 

66,741

 

 

 

105

 

 

 

131,911

 

External revenue

 

 

644,794

 

 

 

580,645

 

 

 

138,673

 

 

 

1,364,112

 

Elimination of intersegment sales

 

 

21,061

 

 

 

27,063

 

 

 

1,518

 

 

 

49,642

 

Segment revenue

 

$

665,855

 

 

$

607,708

 

 

$

140,191

 

 

$

1,413,754

 

 

During the six months ended June 30, 2023 and 2022, 89.7% and 90.2%, respectively, of the Company’s revenue was recognized as products and services that were transferred over time.

The timing of revenue recognition, billings and cash collections result in billed accounts receivable, contract assets and advance payments from customers.

As of June 30, 2023 and December 31, 2022, the Company had $185.9 million and $183.6 million, respectively, in contract assets from contracts with customers. The contract assets primarily relate to the Company’s right to consideration for work completed but not billed at the reporting date. The contract assets are transferred to accounts receivable when the rights become unconditional.

Significant changes in the contract asset balance during the period are as follows:

 

 

 

Six Months Ended
June 30,

 

(in thousands)

 

2023

 

 

2022

 

Beginning balance

 

$

183,613

 

 

$

155,243

 

Revenue recognized

 

 

1,300,085

 

 

 

1,233,229

 

Amounts collected or invoiced

 

 

(1,297,821

)

 

 

(1,209,300

)

Ending balance

 

$

185,877

 

 

$

179,172

 

 

As of June 30, 2023 and December 31, 2022, the Company had $185.7 million and $197.9 million, respectively, in advance payments from customers. Of those amounts, $171.2 million and $178.9 million, respectively, were customer deposits and prepayments of inventory and $14.5 million and $18.9 million, respectively, were related to the contractual timing of payments. The advance payments are not considered a significant financing component because they are used to meet working capital demands of a contract, offset inventory risks and protect the Company from the failure of other parties to fulfill obligations under a contract.