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Revenue from Contracts with Customers | 9 Months Ended
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Sep. 30, 2018
Revenue from Contract with Customer [Abstract] |
Revenue from Contracts with Customers | Revenue from Contracts with Customers We adopted ASC 606 on January 1, 2018, using the modified retrospective transition method for all contracts not completed as of the date of adoption. The reported results for 2018 reflect the application of ASC 606 while the reported results for 2017 were prepared under the guidance of ASC 605. The adoption of ASC 606 represents a change in accounting principle that will more closely align revenue recognition with the delivery of our goods and will provide financial statement readers with enhanced disclosures. In accordance with ASC 606, revenue is recognized when a customer obtains control of promised goods in an amount that reflects the consideration we expect to be entitled to receive in exchange for those goods. To the extent that transaction price includes variable consideration, we estimate the amount of variable consideration that should be included in the transaction price utilizing the expected value method or the most likely amount method depending on the nature of the variable consideration. Variable consideration is included in the transaction price if, in management’s judgment, it is probable that a significant future reversal of cumulative revenue under the contract will not occur. Revenue is recognized when control of the good or service is transferred to the customer either at a point in time or, in limited circumstances, as our services are rendered over time. Revenue is measured as the amount of consideration we expect to receive in exchange for transferring goods or services. The following tables summarize sales to external customers by major source.
|  | Nine Months Ended September 30, 2018
|  | Mobile Solutions |  | Power Solutions |  | Life Sciences |  | Intersegment Sales Eliminations |  | Total
United States |  | $ | 144,138 |  |  | $ | 120,189 |  |  | $ | 142,863 |  |  | $ | (1,798 | ) |  | $ | 405,392 |
China |  | 34,273 |  |  | 4,140 |  |  | 3,843 |  |  | — |  |  | 42,256 |
Mexico |  | 21,042 |  |  | 8,799 |  |  | 429 |  |  | — |  |  | 30,270 |
Brazil |  | 27,722 |  |  | 157 |  |  | 29 |  |  | — |  |  | 27,908 |
Germany |  | 4,500 |  |  | 24 |  |  | 11,138 |  |  | — |  |  | 15,662 |
Switzerland |  | 3,915 |  |  | 35 |  |  | 3,827 |  |  | — |  |  | 7,777 |
Poland |  | 5,485 |  |  | 23 |  |  | 1 |  |  | — |  |  | 5,509 |
Italy |  | 4,424 |  |  | 214 |  |  | 243 |  |  | — |  |  | 4,881 |
Czech Republic |  | 4,791 |  |  | 47 |  |  | — |  |  | — |  |  | 4,838 |
Netherlands |  | — |  |  | 2,556 |  |  | — |  |  | — |  |  | 2,556 |
Other |  | 9,388 |  |  | 8,400 |  |  | 6,343 |  |  | — |  |  | 24,131 |
Total net sales |  | $ | 259,678 |  |  | $ | 144,584 |  |  | $ | 168,716 |  |  | $ | (1,798 | ) |  | $ | 571,180 |
|  | Three Months Ended September 30, 2018
|  | Mobile Solutions |  | Power Solutions |  | Life Sciences |  | Intersegment Sales Eliminations |  | Total
United States |  | $ | 46,341 |  |  | $ | 38,137 |  |  | $ | 63,869 |  |  | $ | (567 | ) |  | $ | 147,780 |
China |  | 11,111 |  |  | 1,696 |  |  | 2,405 |  |  | — |  |  | 15,212 |
Mexico |  | 6,570 |  |  | 2,254 |  |  | 90 |  |  | — |  |  | 8,914 |
Germany |  | 1,415 |  |  | 17 |  |  | 7,321 |  |  | — |  |  | 8,753 |
Brazil |  | 8,200 |  |  | 107 |  |  | — |  |  | — |  |  | 8,307 |
Poland |  | 1,215 |  |  | 6 |  |  | 2,107 |  |  | — |  |  | 3,328 |
Italy |  | 1,514 |  |  | 5 |  |  | — |  |  | — |  |  | 1,519 |
Czech Republic |  | 1,285 |  |  | 105 |  |  | 106 |  |  | — |  |  | 1,496 |
Switzerland |  | 1,420 |  |  | 47 |  |  | — |  |  | — |  |  | 1,467 |
Netherlands |  | — |  |  | 649 |  |  | — |  |  | — |  |  | 649 |
Other |  | 2,734 |  |  | 3,059 |  |  | 2,465 |  |  | — |  |  | 8,258 |
Total net sales |  | $ | 81,805 |  |  | $ | 46,082 |  |  | $ | 78,363 |  |  | $ | (567 | ) |  | $ | 205,683 |
Product Sales We generally transfer control and recognize a sale when we ship the product from our manufacturing facility to our customer, at a point in time, as this is when our customer obtains the ability to direct use of, and obtain substantially all of the remaining benefits from, the goods. We have elected to recognize the cost for freight and shipping when control over products has transferred to the customer as a component of cost of sales. We use an observable price to determine the stand-alone selling price for separate performance obligations or a cost-plus-margin approach when an observable price is not available. The expected duration of our contracts is one year or less, and we have elected to apply the practical expedient that allows entities to disregard the effects of financing when the contract length is less than one year. The amount of consideration we receive and the revenue we recognize varies with volume rebates and incentives we offer to our customers. We estimate the amount of variable consideration that should be included in the transaction price utilizing the expected value method or the most likely amount method depending on the nature of the variable consideration. Variable consideration is included in the transaction price if, in our judgment, it is probable that a significant future reversal of cumulative revenue under the contract will not occur. We have utilized certain practical expedients allowed by the new standard. We utilize the portfolio approach practical expedient to evaluate sales-related discounts on a portfolio basis to contracts with similar characteristics. The effect on our financial statements of applying the portfolio approach would not differ materially from applying the new standard to individual contracts. We give our customers the right to return only defective products in exchange for functioning products or rework of the product. These transactions are evaluated and accounted for under ASC Topic 460, Guarantees, and we estimate the impact to the transaction price based on an analysis of historical experience. Other Sources of Revenue We provide pre-production activities related to engineering efforts to develop molds, dies and machines that are owned by our customers. We may receive advance payments from customers which are deferred until satisfying our performance obligations by compliance with customer-specified milestones, recognizing revenue at a point in time. These contracts generally have an original expected duration of less than one year. The following table provides information about contract liabilities from contracts with customers.
| Deferred Revenue
Balance at January 1, 2018 | $ | 2,124 |
Balance at September 30, 2018 | $ | 3,216 |
The timing of revenue recognition, billings and cash collections results in billed accounts receivable and customer advances and deposits (contract liability) on the Condensed Consolidated Balance Sheet. These contract liabilities are reported on the Condensed Consolidated Balance Sheet on a contract-by-contract basis at the end of each reporting period as deferred revenue. Deferred revenue relates to payments received in advance of performance under the contract and recognized as revenue as (or when) we perform under the contract. Changes in the contract liability balances during the three months and nine months ended September 30, 2018, were not materially impacted by any other factors. Revenue recognized during the three months and nine months ended September 30, 2018, from amounts included in deferred revenue at the beginning of the period for performance obligations satisfied or partially satisfied during the three months and nine months ended September 30, 2018, was approximately $0.5 million and $1.2 million, respectively. Transaction Price Allocated to Future Performance Obligations ASC 606 requires that we disclose the aggregate amount of transaction price that is allocated to performance obligations that have not yet been satisfied as of September 30, 2018. The guidance provides certain practical expedients that limit this requirement. Our contracts meet the following practical expedient provided by ASC 606:
• | The performance obligation is part of a contract that has an original expected duration of one year or less.
Costs to Obtain and Fulfill a Contract Prior to the adoption of ASC 606, we expensed commissions paid to internal sales representatives for obtaining contracts. Under ASC 606, we adopted the practical expedient to recognize commissions paid to internal sales personnel that are incremental to obtaining customer contracts as an expense when incurred since the amortization period is less than one year. The judgments made in determining the amount of costs incurred include whether the commissions are in fact incremental and would not have occurred absent the customer contract. Costs to obtain a contract are expensed as selling, general and administrative expense. Sales, value add, and other taxes we collect concurrent with revenue-producing activities are excluded from revenue. Incidental items that are immaterial in the context of the contract are recognized as expense. Financial Statement Impact of Adopting ASC 606 The following table presents the impact of adoption of ASC 606 on our Condensed Consolidated Statements of Operations and Comprehensive Income (Loss) and our Condensed Consolidated Balance Sheet. Differences are due to the acceleration in the recognition of revenue to the point of shipment or delivery for contracts where an unconditional obligation to purchase is present for inventory that was considered in consignment under ASC 605.
|  | Three Months Ended September 30, 2018 |  | Nine Months Ended September 30, 2018
|  | As Reported |  | Balances Without Adoption of ASC 606 |  | Effect of Change |  | As Reported |  | Balances Without Adoption of ASC 606 |  | Effect of Change
Net sales |  | $ | 205,683 |  |  | $ | 205,691 |  |  | $ | (8 | ) |  | $ | 571,180 |  |  | $ | 571,260 |  |  | $ | (80 | )
Cost of sales |  | 156,408 |  |  | 156,424 |  |  | (16 | ) |  | 431,492 |  |  | 431,544 |  |  | (52 | )
Income (loss) from operations |  | 5,881 |  |  | 5,873 |  |  | 8 |  |  | 9,283 |  |  | 9,311 |  |  | (28 | )
|  | As of September 30, 2018 |  |  |  |  |  |
|  | As Reported |  | Balances Without Adoption of ASC 606 |  | Effect of Change |  |  |  |  |  |
Accounts receivable, net |  | $ | 149,982 |  |  | $ | 149,454 |  |  | $ | 528 |  |  |  |  |  |  |
Inventories |  | 124,109 |  |  | 124,427 |  |  | (318 | ) |  |  |  |  |  |

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- Definition The entire disclosure of revenue from contract with customer to transfer good or service and to transfer nonfinancial asset. Includes, but is not limited to, disaggregation of revenue, credit loss recognized from contract with customer, judgment and change in judgment related to contract with customer, and asset recognized from cost incurred to obtain or fulfill contract with customer. Excludes insurance and lease contracts. + References Reference 1: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 235 -URI http://asc.fasb.org/topic&trid=2122369 Reference 2: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 606 -URI http://asc.fasb.org/topic&trid=49130388 + Details
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