Note 3 - Revenue

3 Months Ended

Mar. 31, 2021

Notes to Financial Statements

Revenue from Contract with Customer [Text Block]

3. Revenue

Disaggregation of Revenue

The following tables illustrate the disaggregation of revenue by geographic area, groups of similar products and services and sales channels:

Net Sales by geographic area

	Three Months Ended
	March 31
	2021		2020
Americas	$	157.8	$	162.6
Europe, Middle East and Africa		80.9		72.0
Asia Pacific		24.6		17.5
Total	$	263.3	$	252.1

Net Sales are attributed to each geographic area based on the end user country and are net of intercompany sales.

Net Sales by groups of similar products and services

	Three Months Ended
	March 31
	2021		2020
Equipment	$	160.9	$	154.2
Parts and consumables		62.3		54.2
Specialty surface coatings(a)		1.5		6.1
Service and other		38.6		37.6
Total	$	263.3	$	252.1

^(a) On February 1, 2021, we sold our coatings business.  Further details regarding the sale are discussed in Note 5.

Net Sales by sales channel

	Three Months Ended
	March 31
	2021		2020
Sales direct to consumer	$	169.0	$	167.6
Sales to distributors		94.3		84.5
Total	$	263.3	$	252.1

Contract Liabilities

Sales Returns

The right of return may exist explicitly or implicitly with our customers. When the right of return exists, we adjust the transaction price for the estimated effect of returns. We estimate the expected returns using the expected value method by assessing historical sales levels and the timing and magnitude of historical sales return levels as a percent of sales and projecting this experience into the future.

Sales Incentives

Our sales contracts may contain various customer incentives, such as volume-based rebates or other promotions. We reduce the transaction price for certain customer programs and incentive offerings that represent variable consideration. Sales incentives given to our customers are recorded using the most likely amount approach for estimating the amount of consideration to which the Company will be entitled. We forecast the most likely amount of the incentive to be paid at the time of sale, update this forecast quarterly, and adjust the transaction price accordingly to reflect the new amount of incentives expected to be earned by the customer. A majority of our customer incentives are settled within one year. We record our accruals for volume-based rebates and other promotions in Other Current Liabilities on our Consolidated Balance Sheets.

The change in our sales incentive accrual balance was as follows:

	Three Months Ended
	March 31
	2021			2020
Beginning balance	$	12.1		$	13.7
Additions to sales incentive accrual		5.2			5.4
Contract payments		(5.7	)		(8.2	)
Foreign currency fluctuations		(0.2	)		(0.2	)
Divestiture of business		(0.1	)		—
Ending balance	$	11.3		$	10.7

Deferred Revenue

We sell separately priced prepaid contracts to our customers where we receive payment at the inception of the contract and defer recognition of the consideration received because we have to satisfy future performance obligations. Our deferred revenue balance is primarily attributed to prepaid maintenance contracts on our machines ranging from 12 months to 60 months. In circumstances where prepaid contracts are bundled with machines, we use an observable price to determine stand-alone selling price for separate performance obligations.

The change in the deferred revenue balance was as follows:

	Three Months Ended
	March 31
	2021			2020
Beginning balance	$	9.3		$	10.7
Increase in deferred revenue representing our obligation to satisfy future performance obligations		4.1			2.7
Decrease in deferred revenue for amounts recognized in Net Sales for satisfied performance obligations		(3.4	)		(2.5	)
Foreign currency fluctuations		—			(0.1	)
Ending balance	$	10.0		$	10.8

At March 31, 2021, $6.5 million and $3.5 million of deferred revenue was reported in Other Current Liabilities and Other Liabilities, respectively, on our Consolidated Balance Sheets. Of this, we expect to recognize the following approximate amounts in Net Sales in the following periods:

Remaining 2021	$	5.7
2022		2.3
2023		1.2
2024		0.6
2025		0.2
Thereafter		—
Total	$	10.0

At December 31, 2020, $5.9 million and $3.4 million of deferred revenue was reported in Other Current Liabilities and Other Liabilities, respectively, on our Consolidated Balance Sheets.