REVENUE

9 Months Ended

Sep. 30, 2023

Revenue from Contract with Customer [Abstract]

REVENUE

REVENUE

Disaggregation of revenue. Essentially all of our revenues are associated with contracts with customers. A disaggregation of our revenue from contracts with customers by geographic region, by reportable operating segment and by service type is presented below (in thousands):

Geographic area:

	Three Months Ended September 30, 2023						Three Months Ended September 30, 2022
	(unaudited)						(unaudited)
	United States and Canada		Other Countries		Total		United States and Canada		Other Countries		Total
Revenue:
IHT	$	100,800	$	3,057	$	103,857	$	108,009	$	2,303	$	110,312
MS	67,286		35,572		102,858		76,135		31,892		108,027
Total	$	168,086	$	38,629	$	206,715	$	184,144	$	34,195	$	218,339

	Nine Months Ended September 30, 2023						Nine Months Ended September 30, 2022
	(unaudited)						(unaudited)
	United States and Canada		Other Countries		Total		United States and Canada		Other Countries		Total
Revenue:
IHT	$	312,344	$	10,082	$	322,426	$	312,928	$	7,105	$	320,033
MS	221,943		104,115		326,058		217,749		91,135		308,884
Total	$	534,287	$	114,197	$	648,484	$	530,677	$	98,240	$	628,917

Revenue by Operating segment and service type (in thousands):

	Three Months Ended September 30, 2023
	(unaudited)
	Non-Destructive Evaluation and Testing Services		Repair and Maintenance Services		Heat Treating		Other		Total
Revenue:
IHT	$	83,207	$	39	$	12,946	$	7,665	$	103,857
MS	—		101,624		55		1,179		102,858
Total	$	83,207	$	101,663	$	13,001	$	8,844	$	206,715

	Three Months Ended September 30, 2022
	(unaudited)
	Non-Destructive Evaluation and Testing Services		Repair and Maintenance Services		Heat Treating		Other		Total
Revenue:
IHT	$	87,267	$	19	$	16,357	$	6,669	$	110,312
MS	—		106,776		125		1,126		108,027
Total	$	87,267	$	106,795	$	16,482	$	7,795	$	218,339

	Nine Months Ended September 30, 2023
	(unaudited)
	Non-Destructive Evaluation and Testing Services		Repair and Maintenance Services		Heat Treating		Other		Total
Revenue:
IHT	$	259,118	$	261	$	42,391	$	20,656	$	322,426
MS	—		323,484		544		2,030		326,058
Total	$	259,118	$	323,745	$	42,935	$	22,686	$	648,484

	Nine Months Ended September 30, 2022
	(unaudited)
	Non-Destructive Evaluation and Testing Services		Repair and Maintenance Services		Heat Treating		Other		Total
Revenue:
IHT	$	255,419	$	158	$	45,983	$	18,473	$	320,033
MS	—		305,277		238		3,369		308,884
Total	$	255,419	$	305,435	$	46,221	$	21,842	$	628,917

For additional information on our reportable operating segments and geographic information, refer to Note 15 - Segment and Geographic Disclosures.

Contract balances. The timing of revenue recognition, billings, and cash collections results in the recognition of trade accounts receivable, contract assets and contract liabilities on the condensed consolidated balance sheets. Trade accounts receivable include billed and unbilled amounts currently due from customers and represent unconditional rights to receive consideration. The amounts due are stated at their net estimated realizable value. Refer to Note 4 - Receivables for additional information on our trade receivables and the allowance for credit losses.

Contract costs. We recognize the incremental costs of obtaining contracts as selling, general and administrative expenses when incurred if the amortization period of the asset that otherwise would have been recognized is one year or less. Costs to fulfill a contract are recorded as assets if they relate directly to a contract or a specific anticipated contract, the costs to generate or enhance resources that will be used in satisfying performance obligations in the future, and the costs are expected to be recovered. Costs to fulfill a contract recognized as assets primarily consist of labor and material costs and generally relate to engineering and set-up costs incurred prior to when the satisfaction of performance obligations begins. Assets recognized for

costs to fulfill a contract are included in the “Prepaid expenses and other current assets” line of the condensed consolidated balance sheets and were not material as of September 30, 2023 and December 31, 2022. Such assets are recognized as expenses as we transfer the related goods or services to the customer. All other costs to fulfill a contract are expensed as incurred.

Remaining performance obligations. As permitted by ASC 606, Revenue from Contracts with Customers, we have elected not to disclose information about remaining performance obligations where (i) the performance obligation is part of a contract that has an original expected duration of one year or less or (ii) when we recognize revenue from the satisfaction of the performance obligation in accordance with the right-to-invoice practical expedient, which permits us to recognize revenue in the amount to which we have a right to invoice the customer if that amount corresponds directly with the value to the customer of our performance completed to date. As most of our contracts with customers are short-term in nature and billed on a time and material basis, there were no material amounts of remaining performance obligations as of September 30, 2023 and December 31, 2022.