The Company’s revenues are derived primarily from the sale of hardware and services. The Company recognizes its revenues net of any value-added or sales tax and net of sales discounts. The Company accounts for revenue in accordance with ASC Topic 606, Revenue from Contracts with Customers.

The Company sells a high proportion of its X-ray products to a limited number of OEM customers. X-ray tubes, digital detectors and image-processing tools and security and inspection products are generally sold on a stand-alone basis. However, the Company occasionally sells its digital detectors, X-ray tubes and imaging processing tools as a package that is optimized for digital X-ray imaging and sells its Linatron ® X-ray accelerators together with its imaging processing software and image detection products to OEM customers that incorporate them into their inspection systems. Service contracts are often sold with certain security and inspection products and computer-aided detection products.

Transaction prices of products or services are typically based on contracted rates. To the extent that the transaction price includes variable consideration, the Company estimates the amount of variable consideration that should be included in the transaction price utilizing the expected value method when there is a large number of transactions with similar characteristics or the most likely

amount method when there are two possible outcomes, depending on the circumstances of the transaction , to which the Company expects to be entitled. Variable consideration is included in the transaction price if, in the Company’s judgment, it is probable that a significant future reversal of cumulative revenue under the contract will not occur. Estimates of variable consideration and determination of whether to include estimated amounts in the transaction price are based largely on an assessment of the Company’s anticipated performance and all information (historical, current and forecasted) that is reasonably available.

The Company allows customers to return specific parts of purchased X-ray tubes for a partial refund credit, which is identified as variable consideration. ASC 606-10-55-23 requires that for sales with a right of return, revenue is reduced for expected returns, a liability is recorded for expected returns, and an asset is recorded for the right to recover products from customers on settling the liability. The Company recognizes a reduction to revenue and cost of sales at the time of sale and a corresponding contract liability and contract asset. The Company records this estimate based on the historical volume of product returns and adjusts the estimate on a quarterly basis based on the current quarter sales and current quarter returns.

If a contract contains a single performance obligation, the entire transaction price is allocated to the single performance obligation. Contracts that contain multiple performance obligations require an allocation of the transaction price based on the estimated relative standalone selling prices of the promised products or services underlying each performance obligation. The Company determines standalone selling prices based on the price at which the performance obligation is sold separately.

The Company accounts for a contract with a customer when there is an approval and commitment from both parties, the rights of the parties are identified, payment terms are identified, the contract has commercial substance and collectability of the consideration is probable. The Company's performance obligations consist mainly of transferring control of products and services identified in the contracts or purchase orders. For each contract, the Company considers the obligation to transfer products and services to the customer, which are distinct, to be performance obligations.

Revenue is recognized when, or as, obligations under the terms of a contract are satisfied, which occurs when control of the promised products or services is transferred to customers. Revenue is measured as the amount of consideration the Company expects to receive in exchange for transferring products or services to a customer.

Product revenue is generally recognized when the customer obtains control of the Company’s product, which occurs at a point in time, and may be upon shipment or upon delivery based on the contractual shipping terms of a contract.

Service revenue is generally recognized over time as the services are rendered to the customer based on the extent of progress towards completion of the performance obligation. The Company recognizes service revenue over the term of the service contract. Services are expected to be transferred to the customer throughout the term of the contract and the Company believes recognizing revenue ratably over the term of the contract best depicts the transfer of value to the customer.

Revenue is disaggregated from contracts between geography and by reportable operating segment, which the Company believes best depicts how the nature, amount, timing, and uncertainty of revenues and cash flows are affected by economic factors.


	Three Months Ended						Six Months Ended
(In millions)	April 3, 2020		March 29, 2019		April 3, 2020		March 29, 2019
Americas	$	62.5	$	74.2	$	132.8	$	142.6
EMEA	64.0		68.2		129.2		130.8
APAC	70.5		53.4		135.1		108.1
	$	197.0	$	195.8	$	397.1	$	381.5

Revenue in the United States of America was $60.2 million and $72.2 million for the three months ended April 3, 2020 and March 29, 2019, respectively. Revenue in the United States of America was $128.8 million and $139.4 million for the six months ended April 3, 2020 and March 29, 2019, respectively.

Contract assets are included within the prepaid expenses and other current assets, and other assets balances. Contract liabilities, which also includes refund obligations are included within the accrued liabilities and other current liabilities, deferred revenues, and other long-term liabilities balances. The following table summarizes the changes in the contract assets and refund liabilities for the six months ended April 3, 2020:


(In millions)			Contract Assets
Balance at September 27, 2019			23.7
Costs recovered from product returns during the period			(3.0)
Contract asset from shipments of products, subject to return during the period			3.4
Balance at April 3, 2020			24.1


(In millions)	Refund Liabilities
Balance at September 27, 2019	$	26.4
Release of refund liability included in beginning of year refund liability	(3.3)
Additions to refund liabilities	3.8
Balance at April 3, 2020	$	26.9

During the three and six months ended April 3, 2020, the Company recognized revenue of $1.3 million and $7.4 million respectively, related to contract liabilities which existed at September 27, 2019. During the three and six months ended March 29, 2019, the Company recognized revenue of $2.6 million and $8.3 million respectively, related to contract liabilities which existed at September 28, 2018.

Remaining performance obligations represent the transaction price of firm orders for which revenue has not yet been recognized. As of April 3, 2020, total remaining performance obligations amounted to $276.1 million. The Company expects to recognize the remaining performance obligations over the next 12 months.

The Company has certain costs to obtain and fulfill a customer contract, such as commissions and shipping costs. The Company recognizes the incremental costs of obtaining contracts as an expense when incurred if the amortization period of the assets that the Company otherwise would have recognized is one year or less. Incremental costs of obtaining contracts that would be recognized over greater than one year are not material. The Company accounts for shipping and handling activities related to contracts with customers as costs to fulfill the promise to transfer the associated products. These costs are included as a component of cost of revenues.