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Note 2 - Revenues
 9 Months Ended
Sep. 30, 2022
Notes to Financial Statements  
Revenue from Contract with Customer [Text Block]

NOTE 2 — REVENUES

 

Revenues are recognized when the promised goods or services are transferred to customers, in an amount that reflects the consideration the Company expects to be entitled to in exchange for those goods or services.

 

The following table presents the Company’s revenues disaggregated by revenue source for the three and nine months ended September 30, 2022 and 2021:

  

Three Months Ended September 30,

  

Nine Months Ended September 30,

 
  

2022

  

2021

  

2022

  

2021

 

Heavy Fabrications

 $30,640  $28,675  $93,486  $87,282 

Gearing

  10,190   7,562   30,890   20,315 

Industrial Solutions

  4,020   4,213   13,142   12,357 

Eliminations

  (7)  (61)  (819)  (346)

Consolidated

 $44,843  $40,389  $136,699  $119,608 

 

Revenue within the Company’s Gearing and Industrial Solutions segments, as well as industrial fabrication product line revenues within the Heavy Fabrications segment, are generally recognized at a point in time, typically when the promised goods or services are physically transferred to its customers in an amount that reflects the consideration it expects to be entitled to in exchange for those goods or services. A performance obligation is a promise in a contract to transfer a distinct product or service to the customer. The Company measures revenue based on the consideration specified in the purchase order and revenue is recognized when the performance obligations are satisfied. If applicable, the transaction price of a contract is allocated to each distinct performance obligation and recognized as revenue when or as the customer receives the benefit of the performance obligation.

 

For many tower sales within the Company’s Heavy Fabrications segment, products are sold under terms included in bill and hold sales arrangements that result in different timing for revenue recognition. The Company recognizes revenue under these arrangements only when there is a substantive reason for the agreement, the ordered goods are identified separately as belonging to the customer and not available to fill other orders, the goods are currently ready for physical transfer to the customer, and the Company does not have the ability to use the product or to direct it to another customer. Assuming these required revenue recognition criteria are met, revenue is recognized upon completion of product manufacture and customer acceptance.

 

Within the Gearing segment, the Company recognized revenue over time of $499 and $2,444 for the three and nine months ended September 30, 2021, respectively, as the products had no alternative use to the Company and the Company had an enforceable right to payment, including profit, upon termination of the contracts. Since the Company’s projects are labor intensive, the Company uses labor hours as the input measure of progress for the applicable contracts. During the fourth quarter of 2021, the Company ceased recording revenue over time within the Gearing segment due to a change in terms. During the nine months ended September 30, 2022 and 2021, the Company recognized a portion of revenue within the Heavy Fabrications segment over time, as the products had no alternative use to the Company and the Company had an enforceable right to payment, including profit, upon termination of the contracts. Within the Heavy Fabrications segment, the Company recognized revenue over time of $5,927 and $13,336 for the three and nine months ended September 30, 2022, respectively and recognized revenue over time of $1,791 and $4,220 for the three and nine months ended September 30, 2021, respectively. The Company also uses labor hours as the input measure of progress for the applicable Heavy Fabrications contracts since the projects are labor intensive. Contract assets are recorded when performance obligations are satisfied but the Company is not yet entitled to payment. Contract assets represent the Company’s rights to consideration for work completed but not billed at the end of the period. 

 

The Company generally expenses sales commissions when incurred. These costs are recorded within selling, general and administrative expenses. Customer deposits, deferred revenue and other receipts are deferred and recognized when the revenue is realized and earned. Cash payments to customers are classified as reductions of revenue in the Company’s statement of operations.

 

The Company does not disclose the value of the unsatisfied performance obligations for contracts with an original expected length of one year or less.