Note 3 - Revenue From Contracts With Customers

3 Months Ended

Sep. 30, 2022

Notes to Financial Statements

Revenue from Contract with Customer [Text Block]

3)     Revenue From Contracts With Customers

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 is recognized over time under certain long-term contracts within the Engineering Technologies and Engraving groups 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. 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, 2022		September 30, 2021
Electronics	$	75,199	$	75,836
Engraving Services		33,585		32,917
Engraving Products		1,439		2,253
Total Engraving		35,024		35,170
Scientific		18,456		21,529
Engineering Technologies		16,999		17,573
Hydraulics Cylinders and Systems		16,737		10,653
Merchandising & Display		9,565		6,688
Pumps		8,620		8,161
Total Specialty Solutions		34,922		25,502
Total revenue by product line	$	180,600	$	175,610

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

	Three Months Ended		Three Months Ended
Net sales	September 30, 2022		September 30, 2021
United States	$	110,159	$	98,984
Asia Pacific		32,793		37,256
EMEA (1)		33,925		36,001
Other Americas		3,723		3,369
Total	$	180,600	$	175,610

⁽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) for the three months ended:

	Three Months Ended
Timing of Revenue Recognition	September 30, 2022		September 30, 2021
Products and services transferred at a point in time	$	173,075	$	164,423
Products transferred over time		7,525		11,187
Net sales	$	180,600	$	175,610

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 expenses and other current assets. Contract liabilities are customer deposits for which revenue has not been recognized. Current contract liabilities are recorded as accrued liabilities.

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.

The following table provides information about contract assets and liability balances (in thousands):

	Balance at Beginning of Period		Additions		Amount Recognized		Balance at End of Period
Three months ended September 30, 2022
Contract assets:
Prepaid expenses and other current assets	$	24,679	$	16,315	$	11,456	$	29,538
Contract liabilities:
Customer deposits		41		2,635		2,638		38

	Balance at Beginning of Period		Additions		Amount Recognized		Balance at End of Period
Three months ended September 30, 2021
Contract assets:
Prepaid expenses and other current assets	$	15,013	$	9,087	$	5,965	$	18,135
Contract liabilities:
Customer deposits		471		2,955		3,174		252

We recognized the following revenue which was included in the contract liability beginning balances (in thousands):

	September 30, 2022
Revenue recognized in the period from:	Three months ended
Amounts included in the contract liability balance at the beginning of the period	$	41

	September 30, 2021
Revenue recognized in the period from:	Three months ended
Amounts included in the contract liability balance at the beginning of the period	$	471