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Revenue Recognition
 6 Months Ended
Jul. 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

Six Months Ended

(In thousands)

July 29, 2023

July 30, 2022

July 29, 2023

July 30, 2022

United States

$

22,342

$

19,044

$

45,176

$

38,695

Europe

7,836

7,883

15,801

15,301

Canada

2,224

2,225

4,049

4,080

Asia

1,724

1,789

3,018

2,726

Central and South America

1,024

1,023

2,223

1,911

Other

374

295

676

556

Total Revenue

$

35,524

$

32,259

$

70,943

$

63,269

 

Major product types

 

Three Months Ended

Six Months Ended

(In thousands)

July 29, 2023

 July 30, 2022

 July 29, 2023

 July 30, 2022

Hardware

$

11,268

$

8,637

$

22,934

$

17,937

Supplies

19,700

19,166

38,772

37,111

Service and Other

4,556

4,456

9,237

8,221

Total Revenue

$

35,524

$

32,259

$

70,943

$

63,269

 

 

 

 

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 $2.15 million balance was recorded as deferred revenue. During the three and six months of fiscal 2024, we recognized an additional $0.3 million and $0.6 million, respectively, included in revenue in the condensed consolidated statement of income (loss) for the periods ended July 29, 2023, and there is a balance of $1.5 million in the deferred revenue at July 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 $329,000 and $412,000 at July 29, 2023 and January 31, 2023, respectively, and are recorded as deferred revenue in the accompanying condensed consolidated balance sheet. The decrease in the deferred revenue balance during the three months ended July 29, 2023 is due to revenue recognized during the current period, including $252,000 of revenue recognized that was included in the deferred revenue balance at January 31, 2023. The amount of revenue recognized for the period was partially 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 over the remaining useful life of these contracts, which we currently estimate to be approximately 18 years as of July 29, 2023. The balance of these contract assets at January 31, 2023 was $1.4 million. During the three and six months ended July 29, 2023, we amortized contract costs of $19,000 and $37,000, respectively. The balance of deferred incremental direct costs net of accumulated amortization at July 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.