Note 3 - Revenue From Contracts With Customers

3 Months Ended

Sep. 30, 2019

Notes to Financial Statements

Revenue from Contract with Customer [Text Block]

3) Revenue From Contracts With Customers

Effective July 1, 2018, the Company adopted the new accounting standard, ASU No. 2014-09, “Revenue from Contracts with Customers” (ASC 606) using the modified retrospective method to contracts that were not completed as of June 30, 2018. The adoption of ASC 606 represents a change in accounting principle that provides enhanced revenue recognition disclosures.

Most of the Company’s contracts have a single performance obligation which represents the product or service being sold to the customer. Some contracts include multiple performance obligations such as a product and the related installation and/or extended warranty. Additionally, most of the Company’s contracts offer assurance type warranties in connection with the sale of a product to customers. Assurance type warranties provide a customer with assurance that the product complies with agreed-upon specifications. Assurance type warranties do not represent a separate performance obligation.

In general, the Company recognizes revenue at the point in time control transfers to its customer based on predetermined shipping terms. Revenue recognized under long-term contracts within the Engineering Technologies group for highly customized customer products that have no alternative use and in which the contract specifies the Company has a right to payment for its costs, plus a reasonable margin are recognized over time. For products manufactured over time, the transfer of control is measured pro rata, based upon current estimates of costs to complete such contracts. Losses on contracts are fully recognized in the period in which the losses become determinable. Revisions in profit estimates are reflected on a cumulative basis in the period in which the basis for such revision becomes known.

Disaggregation of Revenue from Contracts with Customers

The following table presents revenue disaggregated by product line and segment (in thousands):

	Three Months Ended
Revenue by Product Line	September 30, 2019		September 30, 2018
Engraving Services		36,066		33,855
Engraving Products		2,365		2,124
Total Engraving		38,431		35,979
Electronics		46,617		51,450
Engineering Technologies Components		24,644		20,784
Hydraulics Cylinders and Systems		13,749		12,536
Refrigeration	$	55,133	$	54,545
Merchandising & Display		9,823		9,058
Pumps		8,041		8,728
Total Food Service Equipment		72,997		72,331
Total Revenue by Product Line	$	196,438	$	193,080

The following table presents revenue from continuing operations disaggregated by geography based on company’s locations (in thousands):

	Three Months Ended
Net sales	September 30, 2019		September 30,2018
United States	$	134,293	$	124,729
Asia Pacific		24,346		27,878
EMEA (1)		34,300		35,526
Other Americas		3,499		4,947
Total	$	196,438	$	193,080

⁽¹⁾ EMEA consists primarily of Europe, Middle East and S. Africa.

The following table presents revenue from continuing operations disaggregated by timing of recognition (in thousands):

	Three Months Ended
Timing of Revenue Recognition	September 30, 2019		September 30, 2018
Products and services transferred at a point in time	$	189,954	$	187,898
Products transferred over time		6,484		5,182
Net Sales	$	196,438	$	193,080

Contract Balances

Contract assets represent sales recognized in excess of billings related to work completed but not yet shipped for which revenue is recognized over time. Contract assets are recorded as prepaid and other current assets. Contract liabilities are customer deposits for which revenue has not been recognized. Current contract liabilities are recorded as accrued expenses.

The following table provides information about contract assets and liability balances as of September 30, 2019 (in thousands):

	Balance at Beginning of Period		Additions		Deductions		Balance at End of Period
Three months ended September 30, 2019
Contract assets:
Prepaid and other current assets		8,418		6,325		8,679		6,064
Contract liabilities:
Customer deposits		1,358		1,943		3,277		24

During the three months ended September 30, 2019, we recognized the following revenue as a result of changes in the contract liability balances (in thousands):

	Three months ended
Revenue recognized in the period from:	September 30, 2019
Amounts included in the contract liability balance at the beginning of the period	$	1,358

The timing of revenue recognition, invoicing and cash collections results in billed receivables, contract assets and contract liabilities on the consolidated balance sheets.When consideration is received from a customer prior to transferring goods or services to the customer under the terms of a contract, a contract liability is recorded. Contract liabilities are recognized as revenue after control of the goods and services are transferred to the customer and all revenue recognition criteria have been met.