REVENUES

9 Months Ended

Jun. 30, 2022

REVENUES

REVENUES

12.  REVENUES

Disaggregation of Revenues

Revenues by customer type, geographic location, and revenue recognition method for the three and nine-month periods ended June 30, 2022 are presented in the tables below as the Company deems it best depicts how the nature, amount, timing and uncertainty of net sales and cash flows are affected by economic factors. The tables below also include a reconciliation of the disaggregated revenue within each reportable segment.

Three Months Ended June 30, 2022	Aerospace
(In thousands)	& Defense		USG		Test		Total
Customer type:
Commercial	$	38,918	$	65,610	$	54,449	$	158,977
U.S. Government		53,688		1,591		4,810		60,089
Total revenues	$	92,606	$	67,201	$	59,259	$	219,066
				65
Geographic location:
United States	$	79,536	$	41,822	$	34,662	$	156,020
International		13,070		25,379		24,597		63,046
Total revenues	$	92,606	$	67,201	$	59,259	$	219,066
Revenue recognition method:
Point in time	$	35,238	$	53,656	$	15,827	$	104,721
Over time		57,368		13,545		43,432		114,345
Total revenues	$	92,606	$	67,201	$	59,259	$	219,066

Nine months ended June 30, 2022	Aerospace
(In thousands)	& Defense		USG		Test		Total
Customer type:
Commercial	$	100,407	$	191,832	$	147,390	$	439,629
U.S. Government		147,264		3,045		11,066		161,375
Total revenues	$	247,671	$	194,877	$	158,456	$	601,004
Geographic location:
United States	$	212,849	$	122,021	$	88,708	$	423,578
International		34,822		72,856		69,748		177,426
Total revenues	$	247,671	$	194,877	$	158,456	$	601,004
Revenue recognition method:
Point in time	$	99,464	$	155,693	$	43,488	$	298,645
Over time		148,207		39,184		114,968		302,359
Total revenues	$	247,671	$	194,877	$	158,456	$	601,004

Revenues by customer type, geographic location, and revenue recognition method for the three and nine-month periods ended June 30, 2021 are presented in the tables below.

Three months ended June 30, 2021	Aerospace
(In thousands)	& Defense		USG		Test		Total
Customer type:
Commercial	$	34,708	$	46,735	$	42,063	$	123,506
U.S. Government		50,868		969		6,051		57,888
Total revenues	$	85,576	$	47,704	$	48,114	$	181,394
Geographic location:
United States	$	75,701	$	32,111	$	27,719	$	135,531
International		9,875		15,593		20,395		45,863
Total revenues	$	85,576	$	47,704	$	48,114	$	181,394
Revenue recognition method:
Point in time	$	37,513	$	35,242	$	9,673	$	82,428
Over time		48,063		12,462		38,441		98,966
Total revenues	$	85,576	$	47,704	$	48,114	$	181,394

Nine months ended June 30, 2021	Aerospace
(In thousands)	& Defense		USG		Test		Total
Customer type:
Commercial	$	95,712	$	139,149	$	118,089	$	352,950
U.S. Government		139,008		2,650		15,354		157,012
Total revenues	$	234,720	$	141,799	$	133,443	$	509,962
Geographic location:
United States	$	205,527	$	96,601	$	73,950	$	376,078
International		29,193		45,198		59,493		133,884
Total revenues	$	234,720	$	141,799	$	133,443	$	509,962
Revenue recognition method:
Point in time	$	103,492	$	105,173	$	27,789	$	236,454
Over time		131,228		36,626		105,654		273,508
Total revenues	$	234,720	$	141,799	$	133,443	$	509,962

Revenue Recognition

Payment terms with our customers vary by the type and location of the customer and the products or services offered. Arrangements with customers that include payment terms extending beyond one year are not significant. The transaction price for these contracts reflects our estimate of returns and discounts, which are based on historical, current and forecasted information to determine the expected amount to which we will be entitled in exchange for transferring the promised goods or services to the customer. The realization of variable consideration occurs within a short period of time from product delivery; therefore, the time value of money effect is not significant. We primarily provide standard warranty programs for products in our commercial businesses for periods that typically range from one to two years. These assurance-type programs typically cannot be purchased separately and do not meet the criteria to be considered a performance obligation. Under the typical payment terms of our long term fixed price contracts, the customer pays us either performance-based or progress payments. Performance-based payments represent interim payments based on quantifiable measures of performance or on the achievement of specified events or milestones. Progress payments are interim payments of costs incurred as the work progresses.

For our overtime revenue recognized using the output method of costs incurred, contract cost is estimated utilizing current contract specifications and expected engineering requirements. Contract costs typically are incurred over a period of several months to one or more years, and the estimation of these costs requires judgment. Our cost estimation process is based on the professional knowledge and experience of engineers and program managers along with finance professionals. We review and update our projections of costs quarterly or more frequently when circumstances significantly change. In addition, in the USG segment, we recognize revenue as a series of distinct services based on each day of providing services (straight-line over the contract term) for certain of our USG segment contracts. Under the typical payment terms of our service contracts, the customer pays us in advance of when services are performed. In addition, in the Test segment, we use milestones to measure progress for our Test segment contracts because it best depicts the transfer of control to the customer that occurs as we incur costs on our contracts.

Remaining Performance Obligations

Remaining performance obligations, which is the equivalent of backlog, represent the expected transaction price allocated to contracts that the Company expects to recognize as revenue in future periods when the Company performs under the contracts. These remaining obligations include amounts that have been formally appropriated under contracts with the U.S. Government, and exclude unexercised contract options and potential orders under ordering-type contracts such as Indefinite Delivery, Indefinite Quantity contracts. At June 30, 2022, the Company had $706.8 million in remaining performance obligations of which the Company expects to recognize revenues of approximately 80% in the next twelve months.

Contract assets and liabilities

Assets and liabilities related to contracts with customers are reported on a contract-by-contract basis at the end of each reporting period. Because of the timing difference of revenue recognition and customer billing, these contracts will often result in revenue recognized in excess of billings and billings in excess of costs incurred. At June 30, 2022, contract assets and liabilities totaled $115.8 million and $122.2 million, respectively. During the first nine months of 2022, the Company recognized approximately $74 million in revenues that were included in the contract liabilities balance at September 30, 2021. The increase in net contract assets in the first nine months of 2022 was due to revenue being recognized for performance completed during the period that exceeded customer billings. The increase in net contract liabilities in the first nine months of 2022 was due to higher payments received in advance of revenue recognition criteria being met under the Company’s contracts with customers. At October 1, 2020, contract assets and liabilities totaled $94.3 million and $100.6 million, respectively.