Revenue Recognition

9 Months Ended

Nov. 02, 2019

Revenue from Contract with Customer [Abstract]

Note 3 – 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				Nine Months Ended
(In thousands)	November 2, 2019		October 27, 2018		November 2, 2019		October 27, 2018
United States	$	21,831	$	21,542	$	64,471	$	60,752
Europe		7,059		7,573		22,408		23,292
Asia		1,396		1,560		7,063		4,653
Canada		1,441		1,860		4,346		5,836
Central and South America		1,019		921		3,232		3,078
Other		572		740		1,447		1,879

Total Revenue	$	33,318	$	34,196	$	102,967	$	99,490

Major product types:


	Three Months Ended				Nine Months Ended
(In thousands)	November 2, 2019		October 27, 2018		November 2, 2019		October 27, 2018
Hardware	$	12,160	$	13,096	$	37,514	$	37,989
Supplies		17,655		18,107		55,463		52,690
Service and Other		3,503		2,993		9,990		8,811

Total Revenue	$	33,318	$	34,196	$	1 02,967	$	99,490

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 $387,000 and $373,000 at November 2, 2019 and January 31, 2019, respectively, and are recorded as deferred revenue in the condensed consolidated balance sheet. The

Company recognized $279,000 of

revenue during the nine

month period

ended November 2, 2019

, related to

the deferred revenue balance at January 31, 2019.

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

third quarter of the current year the Company recognized additional direct costs of $121,000. The Company amortized $82,000 of direct costs for the

nine month

ended November 2, 2019

and the balance of deferred incremental direct costs net of accumulated amortization at November 2, 2019 was $942,000, of which $117,000 is reported in other current assets and $825,000 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

seven

years.