Revenue (Notes)

9 Months Ended

Oct. 01, 2021

Revenue [Abstract]

Revenue from Contract with Customer [Text Block]

5. REVENUE

Disaggregation of Revenue

The following table disaggregates total revenue by major product sales by end market.

	For the Three Months Ended				For the Nine Months Ended
	October 1, 2021		October 2, 2020		October 1, 2021		October 2, 2020
In thousands
Defense	$	43,017	$	46,324	$	126,408	$	137,281
Safe and Arm Devices	49,393		81,252		148,985		196,238
Commercial, Business & General Aviation	44,746		52,894		133,834		164,006
Medical	21,996		17,506		65,441		53,245
Industrial & Other	20,684		15,983		59,178		48,401
Total revenue	$	179,836	$	213,959	$	533,846	$	599,171

COVID-19

The impact of the novel coronavirus (“COVID-19”) and the precautionary measures instituted by governments and businesses to mitigate the spread, including limiting non-essential travel, have contributed to a general slowdown in the global economy. The Company has implemented strategies to limit the risk to its operations with a continued focus on the health of its employees and the satisfaction of its customers’ requirements. Despite all of these efforts to mitigate the risks associated with COVID-19, the effects of the pandemic have adversely impacted our commercial end markets, more specifically Commercial, Business and General Aviation customers. The Company saw recoveries in the medical and industrial end markets through the first nine months of 2021 and management expects improved performance through the remainder of 2021. As of the date of this filing, the Company's defense and safe and arm device end markets have not been impacted by COVID-19. The extent and duration of time to which COVID-19 may adversely impact the Company depends on future developments, which are highly uncertain and unpredictable at this time.

The following table disaggregates total revenue by product types.

	For the Three Months Ended				For the Nine Months Ended
	October 1, 2021		October 2, 2020		October 1, 2021		October 2, 2020
Original Equipment Manufacturer	56	%	49	%	58	%	55	%
Aftermarket	17	%	13	%	14	%	12	%
Safe and Arm Devices	27	%	38	%	28	%	33	%
Total revenue	100	%	100	%	100	%	100	%

The following table illustrates the approximate percentage of revenue recognized for performance obligations satisfied over time versus the amount of revenue recognized for performance obligations satisfied at a point in time.

	For the Three Months Ended				For the Nine Months Ended
	October 1, 2021		October 2, 2020		October 1, 2021		October 2, 2020
Over time	41	%	25	%	37	%	31	%
Point-in-time	59	%	75	%	63	%	69	%
Total revenue	100	%	100	%	100	%	100	%

5. REVENUE (CONTINUED)

Disaggregation of Revenue - continued

For contracts in which revenue is recognized over time, the Company performs detailed quarterly reviews of the progress and execution of its performance obligations under these contracts. As part of this process, management reviews information including, but not limited to, any outstanding key contract matters, progress towards completion and the related program schedule, identified risks and opportunities and the related changes in estimates of revenues and costs. The risks and opportunities include management's judgment about the ability and cost to achieve the schedule (e.g., the number and type of milestone events), technical requirements (e.g., a newly-developed product versus a mature product) and other contract requirements. Management must make assumptions and estimates regarding labor productivity and availability, the complexity of the work to be performed, the availability of materials, the length of time to complete the performance obligation (e.g., to estimate increases in wages and prices for materials and related support cost allocations), execution by subcontractors, the availability and timing of funding from customers and overhead cost rates, among other variables. Based upon these reviews, the Company will record the effects of adjustments in profit estimates each period. If at any time management determines that in the case of a particular contract total costs will exceed total contract revenue, a provision for the entire anticipated contract loss is recorded at that time.

Net changes in revenue associated with cost growth on the Company's over time contracts were as follows:

	For the Three Months Ended				For the Nine Months Ended
	October 1, 2021		October 2, 2020		October 1, 2021		October 2, 2020
In thousands
Net change in revenue due to change in profit estimates	$	(937)	$	(2,798)	$	(1,518)	$	(5,338)

The net reduction in revenue in the three-month fiscal period ended October 1, 2021 was primarily related to cost growth on certain missile fuzing contracts, partially offset by favorable cost performance on certain structures programs. The net reduction in revenue in the nine-month fiscal period ended October 1, 2021 was primarily related to cost growth on certain structures programs and missile fuzing contracts, partially offset by favorable cost performance on the joint programmable fuze ("JPF") contract with the U.S. Government ("USG"). The net reductions in revenue in the three-month and nine-month fiscal periods ended October 2, 2020 were primarily related to cost growth on certain structures programs and legacy fuzing contracts, partially offset by favorable cost performance on the JPF contract with the USG.

Unfulfilled Performance Obligations

Unfulfilled performance obligations ("backlog") represents the transaction price of firm orders for which work has not been performed and excludes unexercised contract options and potential orders under ordering-type contracts. Backlog at October 1, 2021 and December 31, 2020, and the portion of backlog the Company expects to recognize revenue on over the next twelve months is as follows:

	October 1,  2021(1)		December 31, 2020
In thousands
Backlog	$	545,281	$	631,236

(1) The Company expects to recognize revenue on approximately 65% of backlog as of October 1, 2021 over the next twelve months.