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Note 4 - Accounts Receivable, Transit Accounts Receivable, Contract Assets and Transit Accounts Payable

9 Months Ended

Sep. 27, 2025

Notes to Financial Statements

Loans, Notes, Trade and Other Receivables Disclosure [Text Block]

4.	Accounts Receivable, Transit Accounts Receivable, Contract Assets and Transit Accounts Payable

The Company’s accounts receivable and contract assets, net comprise the following:

		September 27, 2025				December 28, 2024
Billed		$	52,537			$	55,224
Unbilled			22,943				16,931
Contract assets			9,304				7,375
Provision for credit losses			(1,541	)			(1,570	)

Accounts receivable and contract assets, net		$	83,243			$	77,960

The Company recognizes revenue in accordance with ASC 606, Revenue from Contracts with Customers. Accounts receivable and contract assets represent services where payment is only contingent on the passage of time. Billed receivables primarily represent revenue earned that has been invoiced to customers by the balance sheet date or shortly thereafter, and where the client will typically pay per agreed upon terms. Unbilled receivables primarily represent revenue earned whereby those services are ready to be billed as of the balance sheet date but have not yet been processed for invoicing. Contract assets primarily represents revenue earned under contracts which the Company contractually invoices at future dates per milestones based in the purchase order. These milestones are generally set as a convenience for the customer. Eventual payment is not contingent as the contracts associated with this revenue predominantly include terms that require payment for all services from the last invoice through the termination date.

From time to time, the Company’s Engineering segment enters into agreements to provide, among other things, construction management and engineering services. Pursuant to these agreements, the Company a) may purchase equipment on behalf of the Company’s customer or engage subcontractors to provide construction or other services; b) typically earns a fixed percentage of the total project value; and c) assumes no ownership or risks of inventory. In such situations, the Company acts as an agent under the provisions of FASB ASC 606 “Revenue from Contracts with Customers” and therefore recognizes revenue on a “net-basis.” The Company records revenue on a “net” basis on relevant engineering and construction management projects, which require subcontractor/procurement costs or transit costs. In those situations, the Company charges the client a negotiated fee, which is reported as net revenue when earned.

Under the terms of the agreements, the Company is typically not required to pay the subcontractor until after the corresponding payment from the Company’s end-client is received. Upon invoicing the end-client on behalf of the subcontractor or staffing agency, the Company records this amount simultaneously as both a “transit account receivable” and “transit account payable,” as the amount when paid to the Company is due to and generally paid to the subcontractor within a few days. The Company typically does not pay a given transit account payable until the related transit account receivable is collected. The Company is typically obligated to pay the subcontractor or staffing agency whether or not the client pays the Company. The Company’s transit accounts payable generally exceeds the Company’s transit accounts receivable but absolute amounts and spreads fluctuate significantly from quarter to quarter in the normal course of business. The transit accounts receivable was $6.2 million and related transit accounts payable was $13.4 million, for a net payable of $7.2 million, as of September 27, 2025. The transit accounts receivable was $7.3 million and related transit accounts payable was $23.9 million, for a net payable of $16.6 million, as of December 28, 2024.