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Revenue Recognition
 3 Months Ended
Apr. 29, 2023
Revenue from Contract with Customer [Abstract]  
Revenue Recognition
Note 4 – 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 and networking hardware 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
  
(In thousands)   
April 29,
2023
     
April 30,
2022
  
United States
    $ 22,834      $ 19,651  
Europe
      7,964        7,419  
Canada
      1,825        1,854  
Asia
      1,294        937  
Central and South America
      1,199        888  
Other
      303        261  
    
 
 
     
 
 
  
Total Revenue
    $ 35,419      $ 31,010  
    
 
 
     
 
 
  
 
Major product types:
 
    
Three Months Ended
  
(In thousands)   
April 29,
2023
     
April 30,
2022
  
Hardware
      11,667      $ 9,301  
Supplies
      19,070        17,944  
Service and Other
      4,682        3,765  
    
 
 
     
 
 
  
Total Revenue
    $ 35,419      $ 31,010  
    
 
 
     
 
 
  
In December 2022, we entered into an amended contract with one of our T&M customers that provided for a total payment of $3.25 
million to us as a result of our claims allowable under French law relating to additional component costs we have incurred and will continue to incur in order to supply aerospace printers under the contract for the period beginning in April 2022 and continuing through 2025. Revenue from this arrangement will be recognized in proportion to the total estimated shipments through the end of the contract period. As of January 31, 2023, we have recognized $
1.1 
million in revenue and the remainder $
2.15 
million balance was recorded as deferred revenue. During the first quarter of fiscal 2024, we recognized an additional $
0.4 
million in revenue which is included in the condensed consolidated statement of income for the quarter ended April 29, 2023. The remaining revenue to be recognized will be based on our shipments of the printers during the remainder of fiscal years 2024 and 2025.
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. Contract liabilities were $443,000 and $412,000 at April 29, 2023 and January 31, 2023, respectively, and are recorded as deferred revenue in the accompanying condensed consolidated balance sheet. The increase in the deferred revenue balance during the three months ended April 29, 2023 is due to cash payments received in advance of satisfying performance obligations in the current period which was partially offset by $143,000 of revenue recognized during the period that was included in the deferred revenue balance at January 31, 2023.
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 over the remaining useful life of these contracts, which we currently estimate to be approximately 18 years as of April 29, 2023. The balance of these contract assets at January 31, 2023 was $1.4 million. We amortized $19,000 and $16,000 of direct costs during the three months ended April 29, 2023 and April 30, 2022, respectively. The balance of deferred incremental direct costs net of accumulated amortization at April 29, 2023 was $1.3 million, of which $0.1 million is reported in other current assets and $1.2 million is reported in other assets in the accompanying condensed consolidated balance sheet.