Revenue Recognition |
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| Revenue Recognition | Note 4 – Revenue Recognition We derive revenue from (i) the sale of hardware, including digital color label printers and specialty OEM printing systems, portable data acquisition systems, and airborne printers and networking hardware used in the flight deck and cabin of military, commercial and business aircraft, (ii) the sale of related supplies required in the operation of the hardware, (iii) repairs and maintenance of hardware and (iv) service agreements. Revenues disaggregated by primary geographic markets and major product types are as follows: Primary geographical markets:
*Certain amounts have been reclassified to conform to the current year's presentation. Major product types:
Contract Assets and Liabilities We normally do not have contract assets, which are primarily unbilled accounts receivable that are conditional on something other than the passage of time. Our contract liabilities, which represent billings in excess of revenue recognized, are related to advanced billings for purchased service agreements and extended warranties. Contract liabilities were $565,000 and $543,000 at April 30, 2025 and January 31, 2025, respectively, and are recorded as deferred revenue in the accompanying condensed consolidated balance sheet. The increase in the deferred revenue balance during the three months ended April 30, 2025 is due to cash payments received in advance of satisfying performance obligations in excess of revenue recognized during the current period, including $146,000 of revenue recognized that was included in the deferred revenue balance at January 31, 2025. Contract Costs We recognize an asset for the incremental costs of obtaining a contract with a customer if we expect the benefit of those costs to be longer than one year. We have determined that certain costs related to obtaining sales contracts for our aerospace printer products meet the requirement to be capitalized. These costs are deferred and amortized over the remaining useful life of these contracts, which we currently estimate to be approximately 16 years as of April 30, 2025. We also recognize an asset for the costs to fulfill a contract with a customer if the costs are specifically identifiable, generate or enhance resources used to satisfy future performance obligations, and are expected to be recovered. The balance of these contract assets at January 31, 2025 was $1.5 million. During the three months ended April 30, 2025 and April 27, 2024, we amortized contract costs of $23,000 and $19,000, respectively. The balance of deferred incremental direct costs net of accumulated amortization at April 30, 2025 was $1.5 million, of which $0.1 million is reported in other current assets, and $1.4 million is reported in other assets in the accompanying condensed consolidated balance sheet. |
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