Revenue Recognition

9 Months Ended

Sep. 30, 2022

Revenue From Contract With Customer [Abstract]

Revenue Recognition

Note 3: Revenue Recognition

The Company’s revenues are primarily comprised of sales of products. Revenue is recognized when the Company satisfies its performance obligation under the contract by transferring the promised product to its customer that obtains control of the product. A performance obligation is a promise in a contract to transfer a distinct product to a customer. Most of the Company’s contracts have a single performance obligation, as the promise to transfer products or services is not separately identifiable from other promises in the contract and, therefore, not distinct.

Revenue is measured as the amount of consideration the Company expects to receive in exchange for transferring products. As such, revenue is recorded net of returns, allowances, customer discounts, and incentives. Sales and other taxes are excluded from revenues. Invoiced shipping and handling costs are included in revenue.

The Company’s revenue is primarily from products transferred to customers at a point in time. The Company recognizes revenue at the point in time in which the customer obtains control of the product, which is generally when product title passes to the customer upon shipment.

We have determined that there are certain customer agreements involving production of specified product grades and shapes that require revenue to be recognized over time, in advance of shipment, due to there being no alternative use for these grades and shapes without significant economic loss. Also, the Company maintains an enforceable right to payment including a normal profit margin from the customer in the event of contract termination. Contract assets related to services performed and not yet billed of $1.7 million and $2.2 million are included in Accounts Receivable in the Consolidated Balance Sheets at September 30, 2022 and December 31, 2021, respectively.

The Company has elected the following practical expedients allowed under Accounting Standard Codification (“ASC”) 606:

• Shipping costs are not considered to be separate performance obligations.

• Performance obligations are satisfied within one year from a given reporting date; consequently, we omit disclosure of the transaction price apportioned to remaining performance obligations on open orders.

The following summarizes our revenue by melt type:

	Three months ended September 30,				Nine months ended September 30,
	2022		2021			2022		2021
Net sales:
Specialty alloys	$	37,308	$	30,973	$		118,352	$	92,359
Premium alloys (A)		7,986		5,936			25,707		19,383
Conversion services and other sales		902		260			1,855		967
Total net sales	$	46,196		37,169	$		145,914		112,709

(A) Premium alloys represent all vacuum induction melted (VIM) products.