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Contract Assets and Liabilities

12 Months Ended

Dec. 28, 2024

4. Contract Assets and Liabilities

Contract assets (liabilities) consisted of the following:

	December 28, 2024			December 30, 2023			December 31, 2022
Contract assets	$	7,074,020		$	3,409,809		$	4,068,364
Current contract liabilities and billings in excess of revenue earned		(87,752	)		(916,826	)		(930,500	)
Noncurrent contract liabilities		(7,465	)		(23,198	)		(6,190	)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

The $3.7 million increase in the Company’s contract assets from December 30, 2023 to December 28, 2024 was primarily due to an increase in amounts owed from customers for whom we produce products for defense applications. The accounts receivable balance at December 31, 2022 was $6.5 million.

The $0.8 million decrease in the Company’s contract liabilities from December 30, 2023 to December 28, 2024 was primarily due to satisfaction of performance obligations that were paid in advance.

The Company records contract assets or contract liabilities on a contract-by-contract basis. The Company records a contract asset for unbilled revenue when the Company’s performance exceeds amounts billed or billable. The Company classifies the contract asset as either current or non-current based on the expected timing of the Company’s right to bill under the terms of the contract, which the Company expects to be able to bill for within one year.

Contract liabilities consist of payments received in advance of product shipment. The liability is removed with shipment of the product.

The Company recognized revenue of approximately $0.9 million, $0.9 million, and $3.7 million during fiscal 2024, 2023, 2022 that was included in the opening contract liabilities as of December 30, 2023, December 31, 2022, and December 25, 2021, respectively. There was no revenue recognized from performance obligations satisfied in prior periods.

The Company did not recognize impairment losses on its contract assets during the years ended December 28, 2024, December 30, 2023, and December 31, 2022.