REVENUE

9 Months Ended

Sep. 30, 2020

Revenue from Contract with Customer [Abstract]

REVENUE

NOTE 2 – REVENUE

At contract inception, we assess the goods and services promised in our contracts with customers and identify a performance obligation for each promise to transfer a good or service (or bundle of goods or services) that is distinct. To identify the performance obligations, we consider all the goods or services promised in the contract, whether explicitly stated or implied based on customary business practices. For a contract that has more than one performance obligation, we allocate the total contract consideration to each distinct performance obligation on a relative standalone selling price basis. Revenue is recognized when (or as) the performance obligations are satisfied (i.e., when the customer obtains control of the good or service). The majority of our revenues are derived from product and tooling sales; however, we also receive revenues from service, license, exclusivity and royalty arrangements, which collectively are not material to the quarterly and year-to-date results. Revenue by segment and geography for the three and nine months ended September 30, 2020 and 2019 is as follows:

	For the Three Months Ended September 30, 2020
Segment	Europe	Domestic	Latin America	Asia	Total
Beauty + Home	165,701	109,175	37,921	24,434	337,231
Pharma	206,376	92,932	4,846	11,604	315,758
Food + Beverage	29,688	60,439	6,668	9,369	106,164
Total	401,765	262,546	49,435	45,407	759,153

	For the Three Months Ended September 30, 2019
Segment	Europe		Domestic		Latin America		Asia		Total
Beauty + Home	$	188,542	$	75,931	$	40,261	$	23,448	$	328,182
Pharma	174,252		78,259		6,366		10,374		269,251
Food + Beverage	28,718		57,307		8,058		9,762		103,845
Total	$	391,512	$	211,497	$	54,685	$	43,584	$	701,278

​	For the Nine Months Ended September 30, 2020
Segment	Europe		Domestic		Latin America		Asia		Total
Beauty + Home	$	505,063	$	285,369	$	103,995	$	67,150	$	961,577
Pharma	598,319		264,995		18,412		32,487		914,213
Food + Beverage	86,298		172,507		21,191		24,225		304,221
Total	$	1,189,680	$	722,871	$	143,598	$	123,862	$	2,180,011

​	For the Nine Months Ended September 30, 2019
Segment	Europe		Domestic		Latin America		Asia		Total
Beauty + Home	$	607,316	$	236,883	$	124,352	$	69,370	$	1,037,921
Pharma	549,080		226,073		21,100		27,638		823,891
Food + Beverage	92,015		177,587		25,153		31,832		326,587
Total	$	1,248,411	$	640,543	$	170,605	$	128,840	$	2,188,399

We perform our obligations under a contract with a customer by transferring goods and/or services in exchange for consideration from the customer. The timing of performance will sometimes differ from the timing of the receipt of the associated consideration from the customer, thus resulting in the recognition of a contract asset or a contract liability. We recognize a contract asset when we transfer control of goods or services to a customer prior to invoicing for the related performance obligation. The contract asset is transferred to accounts receivable when the product is shipped or services are performed and invoiced to the customer. We recognize a contract liability if the customer's payment of consideration precedes the entity's performance.

The opening and closing balances of our contract asset and contract liabilities are as follows:

​	Balance as of December 31, 2019		Balance as of September 30, 2020		Increase/ (Decrease)
Contract asset (current)	$	16,245	$	15,914	$	(331)
Contract asset (long-term)	$	—	$	—	$	—
Contract liability (current)	$	79,305	$	66,782	$	(12,523)
Contract liability (long-term)	$	9,779	$	22,035	$	12,256

The differences in the opening and closing balances of our contract asset and contract liabilities are primarily the result of timing differences between our performance and the customer’s payment. The total amount of revenue recognized during the current year against contract liabilities is $59.6 million, including $39.1 million relating to contract liabilities at the beginning of the year.

Determining the Transaction Price

In most cases, the transaction price for each performance obligation is stated in the contract. In determining the variable amounts of consideration within the transaction price (such as volume-based customer rebates), we include an estimate of the expected amount of consideration as revenue. We apply the expected value method based on all of the information (historical, current, and forecast) that is reasonably available and identify reasonable estimates based on this information. We apply the method consistently throughout the contract when estimating the effect of an uncertainty on the amount of variable consideration to which we will be entitled.

Product Sales

We primarily manufacture and sell drug delivery, dispensing, sealing and active packaging solutions. The amount of consideration is typically fixed for such customers. At the time of delivery, the customer is invoiced the agreed-upon price. Revenue from product sales is typically recognized upon manufacture or shipment, when control of the goods transfers to the customer.

To determine when the control transfers, we typically assess, among other things, the shipping terms of the contract, shipping being one of the indicators of transfer of control. A majority of product sales are sold free on board (“FOB”) shipping point. For FOB shipping point shipments, control of the goods transfers to the customer at the time of shipment of the goods. Therefore, our performance obligation is satisfied at the time of shipment. We have elected to account for shipping and handling costs that occur after the customer has obtained control of a good as fulfillment costs rather than as a promised service. We do not have any material significant payment terms as payment is typically received shortly after the point of sale.

There also exist instances where we manufacture highly customized products that have no alternative use to us and for which we have an enforceable right to payment for performance completed to date. For these products, we transfer control and recognize revenue over time by measuring progress towards completion using the Output Method based on the number of products produced. As we normally make our products to a customer’s order, the time between production and shipment of our products is typically within a few weeks.

As a part of our customary business practice, we offer a standard warranty that the products will materially comply with the technical specifications and will be free from material defects. Because such warranties are not sold separately, do not provide for any service beyond a guarantee of a product’s initial specifications, and are not required by law, there is no revenue deferral for these types of warranties.

Tooling Sales

We also build, or contract to build molds and other tools (collectively defined as “tooling”) necessary to produce our products. As with product sales, we recognize revenue when control of the tool transfers to the customer. If the tooling is highly customized with no alternative use to us and we have an enforceable right to payment for performance completed to date, we transfer control and recognize revenue over time by measuring progress towards completion using the Input Method based on costs incurred relative to total estimated costs to completion. Otherwise, revenue for the tooling is recognized at the point in time when the customer approves the tool. We do not have any material significant payment terms as payment is typically either received during the mold-build process or shortly after completion.

In certain instances, we offer extended warranties on tools sold to our customers above and beyond the normal standard warranties. We normally receive payment at the inception of the contract and recognize revenue over the term of the contract. At December 31, 2019, $515 thousand of unearned revenue associated with outstanding contracts was reported in Accounts Payable, Accrued and Other Liabilities. At September 30, 2020, the unearned amount was $487 thousand. We expect to recognize approximately $55 thousand of the unearned amount during the remainder of 2020, $131 thousand in 2021, and $301 thousand thereafter.

Credit Risk

We are exposed to credit losses primarily through our product sales, tooling sales and services to our customers. We assess each customer’s ability to pay for the products we sell by conducting a credit review. The credit review considers our expected billing exposure and timing for payment and the customer’s established credit rating or our assessment of the customer’s creditworthiness based on our analysis of their financial statements when a credit rating is not available. We also consider contract terms and conditions, country and political risks, and business strategy in our evaluation. A credit limit is established for each customer based on the outcome of this review.

We monitor our ongoing credit exposure through active review of customer balances against contract terms and due dates. Our activities include timely account reconciliation, dispute resolution and payment confirmation. We may employ collection agencies and legal counsel to pursue recovery of defaulted receivables.

At September 30, 2020, we reported $593 million of accounts receivable, net of CECL of $7.4 million. Changes in the allowance were not material for the nine months ended September 30, 2020. Current uncertainty in credit and market conditions due to the COVID-19 pandemic may slow our collection efforts if customers experience significant difficulty accessing credit and paying their obligations, which may lead to higher than normal accounts receivable and increased CECL charges.