Note 2 - Revenue From Contracts With Customers |
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| Revenue from Contract with Customer [Text Block] |
2) Revenue From Contracts With Customers
Most of the Company’s contracts have a single performance obligation which represents the product or service being sold to the customer. Some contracts include multiple performance obligations such as a product and the related installation and/or extended warranty. Additionally, most of the Company’s contracts offer assurance type warranties in connection with the sale of a product to customers. Assurance type warranties provide a customer with assurance that the product complies with agreed-upon specifications. Assurance type warranties do not represent a separate performance obligation.
In general, the Company recognizes revenue at the point in time control transfers to its customer based on predetermined shipping terms. Revenue is recognized over time under certain long-term contracts within the Aerospace & Defense and Engraving & Hydraulics segments for highly customized customer products that have no alternative use and in which the contract specifies the Company has a right to payment for its costs, plus a reasonable margin. For these products, the transfer of control is measured pro rata, based upon current estimates of costs to complete such contracts. Losses on contracts are fully recognized in the period in which the losses become determinable. Revisions in profit estimates are reflected on a cumulative basis in the period in which the basis for such revision becomes known.
Disaggregation of Revenue from Contracts with Customers
The following table presents revenue from continuing operations disaggregated by product line and segment (in thousands):
The following table presents revenue from continuing operations disaggregated by geography based on the Company’s locations (in thousands):
(1) EMEA consists primarily of Europe, Middle East and S. Africa.
Contract Balances
Contract assets represent revenue recognized related to work completed but not yet billed as of the reporting date. Contract liabilities are customer deposits for which revenue has not been recognized. Current contract liabilities are recorded as accrued liabilities.
The timing of revenue recognition, invoicing and cash collections results in billed receivables, contract assets and contract liabilities on the consolidated balance sheets. When consideration is received from a customer prior to transferring goods or services to the customer under the terms of a contract, a contract liability is recorded. Contract liabilities are recognized as revenue after control of the goods and services are transferred to the customer and all revenue recognition criteria have been met. Contract liabilities as of September 30, 2026 and June 30, 2026 were $1.8 million and $0.5 million, respectively.
We recognized the following revenue which was included in the contract liability beginning balances (in thousands):
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