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Note 3 - Revenue Recognition
 9 Months Ended
Sep. 30, 2025
Notes to Financial Statements  
Revenue from Contract with Customer [Text Block]

3)

REVENUE RECOGNITION

 

The majority of revenue is from short-term contracts with revenue recognized when a single performance obligation to transfer product under the terms of a contract with a customer is satisfied.

 

Certain of the Company's custom chemical contracts within the chemical segment contain a material right as defined by ASC Topic 606 “Revenue from Contracts with Customers”, (“ASC 606”), from the provision of a customer option to purchase future goods or services at a discounted price as a result of upfront payments provided by customers. Each contract also has a performance obligation to transfer products with 30-day payment terms. The Company recognizes revenue when the customer takes control of the inventory, either upon shipment or when the material is made available for pick up. If the customer is deemed to take control of the inventory prior to pick up, the Company recognizes the revenue as a bill-and-hold transaction in accordance with ASC 606. The Company applies the renewal option approach in allocating the transaction price to these material rights and transfer of product. As a basis for allocating the transaction price to the material right and transfer of product, the Company estimates the expected life of the contract, the expected contractual volumes to be sold over that life, and the most likely expected sales price. Each estimate is updated quarterly on a prospective basis.

 

The Company has a short-term, twelve-month lease agreement for its warehouse space. Lease revenue recognized under this agreement totaled $170 and $170 for the three months ended September 30, 2025, and 2024, respectively, and $510 and $499 for the nine months ended September 30, 2025 and 2024, respectively.

 

Contract Assets and Liabilities:

 

Contract assets consist of unbilled amounts typically resulting from revenue recognized through bill-and-hold arrangements. The contract assets at  September 30, 2025 and  December 31, 2024 consist of unbilled revenue from one customer and unbilled capital reimbursement from another customer and are recorded as accounts receivable in the consolidated balance sheets. Contract liabilities consist of advance payment arrangements related to material rights recorded as deferred revenue in the consolidated balance sheets. Increases to contract liabilities from cash received or due for a performance obligation of chemical segment plant expansions were $0 and $0 for the three months and $125 and $0 for the nine months ended September 30, 2025 and 2024, respectively. Contract liabilities are reduced as the Company transfers product to the customer under the renewal option approach. Revenue recognized in the chemical segment from the contract liability reductions was $61 and $936 for the three months and $171 and $2,539 for the nine months ended September 30, 2025 and 2024, respectively. These contract asset and liability balances are reported on the consolidated balance sheets on a contract-by-contract basis at the end of each reporting period.

 

The following table provides the balance of receivables, contract assets, and contract liabilities from contracts with customers.

 

Contract Assets and Liability Balances

  

September 30, 2025

    

December 31, 2024

    

December 31, 2023

  

Trade receivables, included in accounts receivable*

   $ 7,643     $ 14,991     $ 15,897  

Contract assets, included in accounts receivable

     231       222       1,128  

Contract liabilities, included in deferred revenue - short-term

     788       697       3,656  

Contract liabilities, included in deferred revenue - long-term

     3,156       3,293       9,318  

 

*Exclusive of the BTC of $0, $6,683, and $11,381, respectively, and net of allowances for expected credit losses of $29, $29, and $55, respectively, as of the dates noted.

 

Transaction price allocated to the remaining performance obligations:

 

At September 30, 2025, approximately $3,944 of revenue is expected to be recognized from the remaining performance obligations. The Company expects to recognize this revenue ratably over the expected sales over the expected term of its long-term contracts ranging from two to five years. Approximately 20% of this revenue is expected to be recognized over the next 12 months, and 80% is expected to be recognized over the subsequent 51 months. These amounts are subject to change based upon changes in the estimated contract life and estimated quantities to be sold over the contract life.

 

The Company applies the practical expedient in ASC 606-10-50-14 and excludes the value of unsatisfied performance obligations for (i) contracts with an original expected length of one year or less; and (ii) contracts for which the Company recognizes revenue at the amount to which it has the right to invoice for services performed.

 

The following tables provide revenue from customers disaggregated by the type of arrangement and by the timing of the recognized revenue.

 

Disaggregation of revenue - contractual and non-contractual:

 

   

Three Months Ended September 30,

    

Nine Months Ended September 30,

  
   

2025

    

2024

    

2025

    

2024

  

Contract revenue from customers with > one-year arrangements

   $ 4,759     $ 8,966     $ 9,857     $ 26,941  

Contract revenue from customers with < one-year arrangements

     17,875       42,119       65,877       154,723  

Revenue from non-contractual arrangements

     55       55       166       166  

Total revenue

   $ 22,689     $ 51,140     $ 75,900     $ 181,830  

 

Timing of revenue:

 

   

Three Months Ended September 30,

    

Nine Months Ended September 30,

  
   

2025

    

2024

    

2025

    

2024

  

Bill-and-hold revenue

   $ 10,650     $ 10,211     $ 25,085     $ 32,875  

Non-bill-and-hold revenue

     12,039       40,929       50,815       148,955  

Total revenue

   $ 22,689     $ 51,140     $ 75,900     $ 181,830  

 

As of September 30, 2025 and  December 31, 2024, $5,902 and $7,301, respectively, of bill-and-hold revenue had not shipped.