Note 3 - Revenue From Contracts With Customers

6 Months Ended

Jun. 27, 2020

Notes to Financial Statements

Revenue from Contract with Customer [Text Block]

Disaggregation of revenue

The following tables provide information about revenue from contracts with customers disaggregated by major class of revenue, revenue by channel, and by geographical market, based on ship-to location of the end customer, where available, and ship-to location of distributor otherwise:

Major Class of Revenue	Three Months Ended								Six Months Ended
	June 27,				June 29,				June 27,				June 29,
(In thousands)	2020				2019				2020				2019
Product	$	95,996	96	%	$	98,096	96	%	$	189,221	96	%	$	189,708	95	%
Licensing and services		4,593	4	%		4,200	4	%		8,684	4	%		10,679	5	%
Total revenue	$	100,589	100	%	$	102,296	100	%	$	197,905	100	%	$	200,387	100	%

Revenue by Channel	Three Months Ended								Six Months Ended
	June 27,				June 29,				June 27,				June 29,
(In thousands)	2020				2019				2020				2019
Product revenue - Distributors	$	85,152	85	%	$	86,627	85	%	$	160,607	81	%	$	164,099	82	%
Product revenue - Direct		10,844	11	%		11,469	11	%		28,614	15	%		25,609	13	%
Licensing and services revenue		4,593	4	%		4,200	4	%		8,684	4	%		10,679	5	%
Total revenue	$	100,589	100	%	$	102,296	100	%	$	197,905	100	%	$	200,387	100	%

Revenue by Geographical Market	Three Months Ended								Six Months Ended
	June 27,				June 29,				June 27,				June 29,
(In thousands)	2020				2019				2020				2019
United States	$	9,860	10	%	$	10,161	10	%	$	23,179	12	%	$	23,056	12	%
Other Americas		4,647	4	%		2,705	2	%		7,915	4	%		6,680	3	%
Americas		14,507	14	%		12,866	12	%		31,094	16	%		29,736	15	%
China		52,465	52	%		52,042	51	%		95,964	48	%		100,347	50	%
Taiwan		7,593	8	%		4,672	5	%		17,452	9	%		7,351	4	%
Japan		6,435	6	%		9,415	9	%		14,434	7	%		21,272	11	%
Other Asia		8,067	8	%		10,716	11	%		15,403	8	%		16,886	8	%
Asia		74,560	74	%		76,845	76	%		143,253	72	%		145,856	73	%
Europe		11,522	12	%		12,585	12	%		23,558	12	%		24,795	12	%
Total revenue	$	100,589	100	%	$	102,296	100	%	$	197,905	100	%	$	200,387	100	%

Contract balances

Our contract assets relate to our rights to consideration for licenses and royalties due to us as a member of the HDMI consortium, with collection dependent on events other than the passage of time, such as collection of licenses and royalties from customers by the HDMI licensing agent. The balance results primarily from the amount of estimated revenue related to HDMI that we have recognized to date, but which has not yet been collected by the agent. Contract assets are included in Prepaid expenses and other current assets on our Consolidated Balance Sheets. The following table summarizes activity during the first six months of fiscal 2020:

(In thousands)
Contract assets as of December 28, 2019	$	5,569
Revenues recorded during the period		7,530
Transferred to Accounts receivable or collected		(7,313	)
Contract assets as of June 27, 2020	$	5,786

Contract liabilities are included in Accounts payable and accrued expenses on our Consolidated Balance Sheets. The following table summarizes activity during the first six months of fiscal 2020:

(In thousands)
Contract liabilities as of December 28, 2019	$	2,313
Accruals for estimated future stock rotation and scrap returns		2,790
Less: Release of accruals for recognized stock rotation and scrap returns		(2,318	)
Prepayment for performance obligations expected to be satisfied within three months		199
Contract liabilities as of June 27, 2020	$	2,984

The impact to revenue from the release of accruals for recognized stock rotation and scrap returns was offset by the processing of return merchandise authorizations totaling approximately $2.7 million, yielding a net revenue reduction of approximately $0.4 million for the first six months of 2020.