Note

– Revenue

The Company provides quality, quick-turn prototyping and on-demand manufacturing services. As a result, the majority of revenue recognized in a reporting period is based on completed, invoiced contracts. The Company accounts for revenue in accordance with ASC

606,

which the Company adopted on

January 1, 2018,

using the modified retrospective method. Results for reporting periods beginning after

January 1, 2018

are presented under ASC

606,

while prior period amounts are

not

adjusted and continue to be reported in accordance with the Company’s historic accounting under ASC

605.

The Company recorded a net increase of

$1.5

million to its retained earnings balance on

January 1, 2018

due to the cumulative impact of adopting ASC

606.

The impact of adopting ASC

606

was to increase revenue by

$0.3

million and increase cost of revenue by

$0.2

million for the year ended

December 31, 2018,

and to increase accounts receivable by

$2.9

million and decrease inventory by

$1.3

million as of

December 31, 2018,

which includes the transition adjustment of

$1.5

million noted above.

A performance obligation is a promise in a contract to transfer a distinct good or service to the customer, and is the unit of account in ASC

606.

The majority of the Company’s CNC machining,

printing, and sheet metal contracts have a single performance obligation. The majority of the Company’s injection molding contracts have multiple performance obligations including

one

obligation to produce the mold and a

second

obligation to produce parts. For injection molding contracts with multiple performance obligations, we allocate revenue to each performance obligation based on its relative standalone selling price. We generally determine standalone selling price based on the price charged to customers.

The Company manufactures parts that have

alternative use to the Company since the parts are custom made to specific customer orders, and the Company believes there is a legally enforceable right to payment for performance completed to date on these manufactured parts. For manufactured parts that meet these

two

criteria, the Company will recognize revenue over time. Revenue is recognized over time using the input method based on time in production to measure progress toward satisfying performance obligations.

Revenue by geographic region for the years ended

December 31, 2018,

2017

and

2016

was as follows:


	Year Ended December 31,
(in thousands)	2018		2017		2016
Revenue:
United States	$	350,535	$	263,086	$	223,930
Europe		80,889		70,154		63,365
Japan		14,172		11,250		10,760
Total revenue	$	445,596	$	344,490	$	298,055

Revenue by product line for the years ended

December 31, 2018,

2017

and

2016

was as follows:


	Year Ended December 31,
(in thousands)	2018		2017		2016
Revenue:
Injection Molding	$	210,523	$	194,432	$	175,974
CNC Machining		153,521		103,739		81,407
3D Printing		53,342		43,329		37,847
Sheet Metal		24,998		1,767		-
Other Revenue		3,212		1,223		2,827
Total revenue	$	445,596	$	344,490	$	298,055

The Company generally expenses sales commissions when incurred because the amortization period would have been

one

year or less. These costs are recorded within marketing and sales expenses. The value of unsatisfied performance obligations for contracts with an original expected length of

one

year or less is

not

material.