Revenue Recognition

6 Months Ended

Aug. 03, 2019

Revenue from Contract with Customer [Abstract]

Note 3

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Revenue Recognition

We derive revenue from the sale of (i) hardware, including digital color label printers and specialty OEM printing systems, portable data acquisition systems and airborne printers used in the flight deck and cabin of military, commercial and business aircraft, (ii) related supplies required in the operation of the hardware, (iii) repairs and maintenance of hardware and (iv) service agreements.

Revenues disaggregated by primary geographic markets and major product types are as follows:

Primary geographical markets:


	Three Months Ended				Six Months Ended
(In thousands)	August 3, 2019		July 28, 2018		August 3, 2019		July 28, 2018
United States	$	20,648	$	19,977	$	42,640	$	39,210
Europe		7,473		7,885		15,349		15,719
Asia		2,218		2,537		5,667		3,976
Canada		1,389		1,648		2,905		3,094
Central and South America		1,325		1,102		2,213		2,156
Other		415		658		875		1,139

Total Revenue	$	33,468	$	33,807	$	69,649	$	65,294

Major product types:


	Three Months Ended				Six Months Ended
(In thousands)	August 3, 2019		July 28, 2018		August 3, 2019		July 28, 2018
Hardware	$	12,437	$	12,914	$	25,355	$	24,891
Supplies		18,080		17,883		37,808		34,584
Service and Other		2,951		3,010		6,486		5,819

Total Revenue	$	33,468	$	33,807	$	69,649	$	65,294

Contract Assets and Liabilities

We normally do not have contract assets, which are primarily unbilled accounts receivable that are conditional on something other than the passage of time. Our contract liabilities, which represent billings in excess of revenue recognized, are related to advanced billings for purchased service agreements and extended warranties and were $321,000 and $373,000 at August 3, 2019 and January 31, 2019, respectively, and are recorded as deferred revenue in the condensed consolidated balance sheet. The decrease in the deferred revenue balance during the six months ended August 3, 2019 is primarily due to approximately $412,000 of revenue recognized during the period that was included in the deferred revenue balance at January 31, 2019, offset by cash payments received in advance of satisfying performance obligations.

Contract Costs

We recognize an asset for the incremental costs of obtaining a contract with a customer if we expect the benefit of those costs to be longer than one year. We have determined that certain costs related to obtaining sales contracts for our aerospace printer products meet the requirement to be capitalized. These costs are deferred and amortized based on the forecasted number of units sold over the estimated benefit term, which was estimated to be approximately 10 years. The balance of these contract assets at January 31, 2019 was $903,000. During the six month ended August 3, 2019, amortization of these incremental direct costs were $54,000 and the balance of deferred incremental direct costs net of accumulated amortization at August 3, 2019 was $848,000, of which $109,000 is reported in other current assets and $739,000 is reported in other assets in the accompanying condensed consolidated balance sheet. The remaining contract costs are expected to be amortized over the estimated remaining period of benefit, which we currently estimate to be approximately 7 years.