CONTRACT ASSETS AND LIABILITIES

3 Months Ended

Mar. 31, 2022

Contractors [Abstract]

CONTRACT ASSETS AND LIABILITIES

CONTRACT ASSETS AND LIABILITIES

Under our customized pump production and long-term water and wastewater project contracts in our IPS segment, amounts are billed as work progresses in accordance with agreed-upon contractual terms, upon various measures of performance, including achievement of certain milestones, completion of specified units, or completion of a contract. Generally, billing occurs subsequent to revenue recognition, resulting in contract assets. Our contract assets are presented as “Cost and estimated profits in excess of billings” on our condensed consolidated balance sheets. However, we sometimes receive advances or deposits from our customers before revenue is recognized, resulting in contract liabilities that are presented as “Billings in excess of costs and estimated profits” on our unaudited condensed consolidated balance sheets.

Costs and estimated profits on uncompleted contracts and related amounts billed were as follows (in thousands):

	March 31, 2022		December 31, 2021
Costs incurred on uncompleted contracts	$	54,888	$	41,329
Estimated profits, thereon	21,594		17,143
Total	76,482		58,472
Less: billings to date	61,315		44,859
Net	$	15,167	$	13,613

Such amounts were included in the accompanying unaudited condensed consolidated balance sheets for March 31, 2022 and December 31, 2021 under the following captions (in thousands):

	March 31, 2022		December 31, 2021
Costs and estimated profits in excess of billings	$	20,504	$	17,193
Billings in excess of costs and estimated profits	(5,328)		(3,581)
Translation adjustment	(9)		1
Net	$	15,167	$	13,613

During the three months ended March 31, 2022, $2 million of the balances that were previously classified as contract liabilities at the beginning of the period shipped. Contract assets and liability changes were primarily due to normal activity and timing differences between our performance and customer payments.