REVENUES

Effective

January 1, 2018,

the Company adopted Accounting Standards Update

2014

(Topic

606

) “Revenue from Contracts with Customers”. Adoption of Topic

606

did

not

impact the timing of revenue recognition in our Consolidated Financial Statements for the current or prior interim or annual periods. Accordingly,

adjustments have been made to opening retained earnings or prior period amounts.

Revenue Recognition

Revenues are generated from the sale of products. Performance obligations are met and revenue is recognized upon transfer of control to the customer, which is generally upon shipment. When contract terms require transfer of control upon delivery at a customer’s location, revenue is recognized on the date of delivery. Revenue is measured as the amount of consideration we expect to receive in exchange for shipped product. Sales, value-added and other taxes billed and collected from customers are excluded from revenue. Customers, including distributors, do

not

have a general right of return. For products shipped under vendor managed inventory arrangements, revenue is recognized and billed when the product is consumed by the customer, at which point control has transferred and there are

further obligations by the Company.

Revenues recognized from prior period performance obligations for the

three

and

nine

months ended

September 30, 2018

were

not

material.

As of

September 30, 2018,

the Company had

unsatisfied performance obligations for contracts with an original expected duration of greater than

one

year. Pursuant to Topic

606,

we have applied the practical expedient with respect to disclosure of the deferral and future expected timing of revenue recognition for transaction price allocated to remaining performance obligations.

Deferred revenue, unbilled revenue and deferred contract costs recorded on our Consolidated Balance Sheets as of

September 30, 2018

and

December 31, 2017

were

not

material.

Accounts Receivable

We extend credit to our customers in the normal course of business. We perform ongoing credit evaluations and generally do

not

require collateral. Payment terms are generally

days. Trade accounts receivable are recorded at their invoiced amounts, net of allowance for doubtful accounts. We evaluate the adequacy of our allowance for doubtful accounts quarterly. Accounts outstanding for longer than contractual payment terms are considered past due and are reviewed for collectability. We maintain reserves for potential credit losses based upon our historical experience and the aging of specific receivables. Receivable balances are written off when collection is deemed unlikely.

Sales Commissions

Sales commissions are expensed as incurred for contracts with an expected duration of

one

year or less. There were

sales commissions capitalized as of

September 30, 2018.

Shipping and Handling Costs

Costs incurred by us related to shipping and handling are included in cost of products sold. Amounts charged to customers pertaining to these costs are reflected as revenue.

Product Warranties

We generally offer warranties against product defects. Costs incurred to service warranty claims are recorded as costs of products sold. We provide for potential warranty costs based on historical experience. Provision for warranty costs is recorded in other current liabilities and other long-term liabilities on our Consolidated Balance Sheets based on the duration of the warranty. The Company does

not

offer separate service-type warranties on its products.

See Note

for disaggregated revenue information.