Note 8 - Contract Balance

6 Months Ended

Jun. 30, 2018

Notes to Financial Statements

Deferred Revenue Disclosure [Text Block]

Note

8.

 Contract balance

The Company’s service contracts include an upfront payment for the one,

two

or

three

-year contract terms. The timing of receipt of payment and timing of performance of the services create timing differences that result in deferred revenue on the Company’s condensed consolidated balance sheet. The advance payments under these contracts are recorded in deferred revenue, and the Company recognizes the revenue when earned. Contracted but unsatisfied performance obligations were approximately

$11.8

million as of

June 30, 2018,

of which the Company expects to recognize approximately

78%

of the revenue over the next

12

months and the remainder thereafter.

The Company's deferred contract revenue consists of service revenue, training and product revenue. Deferred contract revenue balance is comprised mainly of Service revenue. The Company generates Service revenue from the sale of extended service contracts and from time and material services provided to customers who are

not

under a warranty or extended service contract. Service contract revenue is recognized on a straight-line basis over the period of the applicable contract. Service revenue from time and material services is recognized as the services are provided.

The following table provides changes in the deferred contract revenue balance for the

three

and

six

 months ended

June 30, 2018

and

2017

(in thousands):

	Three Months Ended				Six Months Ended
	June 30,				June 30,
	2018		2017		2018		2017
Beginning Balance	$	11,015	$	9,555	$	11,656	$	9,431
Add: Payments received		4,739		3,721		8,416		7,112
Less: Revenue recognized		(3,947)		(3,263)		(8,265)		(6,530)
Ending Balance	$	11,807	$	10,013	$	11,807	$	10,013

Costs for extended service contracts for the

three

and

six

months ended

June 30, 2018,

were

$2.0

million and

3.9

million, respectively.