Note 5 - Net Sales

9 Months Ended

Sep. 30, 2020

Notes to Financial Statements

Revenue from Contract with Customer [Text Block]

NOTE 5 – Net Sales:

For our Uniforms and Related Products and Promotional Products segments, revenue is primarily generated from the sale of finished products to customers. Revenue for our Uniforms and Related Products and Promotional Products segments is recognized when the performance obligations under the contract terms are satisfied. For certain contracts with customers in which the Company has an enforceable right to payment for goods with no alternative use, revenue is recognized over time upon receipt of finished goods into inventory. Revenue for goods that do have an alternative use or that the customer is not obligated to purchase under the terms of a contract is generally recognized when the goods are transferred to the customer. Revenue from the sale of personal protective equipment, including face masks, isolation gowns, sanitizers and gloves, is generally recognized at a point in time when the goods are transferred to the customer, which typically occurs upon shipment or delivery depending on the terms of the underlying contract. The Company includes shipping and handling fees billable to customers in net sales. Shipping and handling activities that occur after the transfer of promised goods are accrued as control is transferred to the customer rather than being treated as a separate performance obligation.

For our Remote Staffing segment, revenue is generated from providing our customers with staffing solution services. Revenue for our Remote Staffing segment is recognized as services are delivered. 

Revenue is measured at the amount of consideration we expect to receive in exchange for the goods or services. Variable consideration for estimated returns, allowances and other price variances is recorded based upon historical experience and current allowance programs. Contract termination terms may involve variable consideration clauses such as sales discounts and customer rebates, and revenue is adjusted accordingly for these provisions. Estimated amounts are included in the transaction price to the extent it is probable that a significant reversal of cumulative revenue recognized will not occur when the uncertainty associated with the variable consideration is resolved. The promised amount of consideration in a contract is not adjusted for the effects of a significant financing component when we expect, at contract inception, that the period between our transfer of a promised good or service to a customer and when the customer pays for that product or service will be one year or less. Sales taxes are excluded from the measurement of a performance obligation’s transaction price. Sales commissions are expensed as incurred when we expect that the amortization period of such costs will be one year or less.

The following table presents disaggregated revenue by operating segment for the periods presented (in thousands):

	Three Months Ended September 30,						Nine Months Ended September 30,
	2020			2019			2020			2019
Uniforms and Related Products Segment:
Uniforms and related products	$	59,296		$	54,155		$	184,909		$	171,347
Personal protective equipment		13,938			824			24,269			3,056
Total Uniforms and Related Products Segment	$	73,234		$	54,979		$	209,178		$	174,403
Remote Staffing Solutions Segment:
Remote staffing solutions services	$	11,636		$	9,305		$	30,187		$	26,897
Net intersegment eliminations		(1,309	)		(1,278	)		(3,834	)		(3,575	)
Total Remote Staffing Solutions Segment	$	10,327		$	8,027		$	26,353		$	23,322
Promotional Products Segment:
Promotional products	$	24,769		$	26,460		$	76,719		$	70,563
Personal protective equipment		19,407			-			69,091			-
Total Promotional Products Segment	$	44,176		$	26,460		$	145,810		$	70,563
Consolidated Net Sales	$	127,737		$	89,466		$	381,341		$	268,288

Contract Assets and Contract Liabilities

The following table provides information about accounts receivables - trade, contract assets and contract liabilities from contracts with customers (in thousands):

	September 30,		December 31,
	2020		2019
Accounts receivable - trade	$	85,297	$	79,746
Current contract assets		35,484		38,533
Current contract liabilities		11,815		1,821

Contract assets relate to goods produced without an alternative use for which the Company has an enforceable right to payment but which have not yet been invoiced to the customer. The majority of the amounts included in contract assets on December 31, 2019 were transferred to accounts receivable during the nine months ended September 30, 2020. Contract liabilities relate to payments received in advance of the Company completing its performance under a contract. Contract liabilities are included in other current liabilities in our balance sheets. The increase in contract liabilities during the nine months ended September 30, 2020 was primarily attributable to new customer contracts for the sourcing of personal protective equipment within the Promotional Products segment. During the nine months ended September 30, 2020, $1.3 million of revenue was recognized from the contract liabilities balance as of December 31, 2019.