Revenue from Contracts with Customers

12 Months Ended

Dec. 28, 2019

Revenue from Contract with Customer [Abstract]

Revenue from Contract with Customer

Revenue from Contracts with Customers

Disaggregation of Revenue

Revenue from contracts with customers disaggregated by sales channel and by segment is as follows (in thousands):

	Segment	2019		2018
Supplies-driven channel	Office Furniture	$	891,997	$	904,292
Contract channel	Office Furniture	805,189		801,800
Hearth	Hearth Products	549,761		551,803
Net sales		$	2,246,947	$	2,257,895

Sales by channel type are subject to similar economic factors and market conditions regardless of the channel under which the product is sold. See “Note 17. Reportable Segment Information” in the Notes to Consolidated Financial Statements for further information about operating segments.

Contract Assets and Contract Liabilities

In addition to trade receivables, the Corporation has contract assets consisting of funds paid to certain office furniture dealers in exchange for their multi-year commitment to market and sell the Corporation’s products. These contract assets are amortized over the term of the contracts and recognized as a reduction of revenue. For contracts less than one year, the Corporation has elected the practical expedient to recognize incremental costs to obtain a contract as an expense when incurred. The Corporation has contract liabilities consisting of customer deposits and rebate and marketing program liabilities.

Contract assets and contract liabilities were as follows (in thousands):

	December 28, 2019		December 29, 2018
Trade receivables (1)	$	278,124	$	259,075
Contract assets (current) (2)	$	857	$	529
Contract assets (long-term) (3)	$	2,700	$	2,188
Contract liabilities (4)	$	54,972	$	44,858

The index below indicates the line item in the Consolidated Balance Sheets where contract assets and contract liabilities are reported:

(1)     "Receivables"

(2)     "Prepaid expenses and other current assets"

(3)     "Other Assets"

(4)     "Accounts payable and accrued expenses"

Changes in contract asset and contract liability balances during the year ended December 28, 2019 were as follows (in thousands):

	Contract assets increase (decrease)			Contract liabilities (increase) decrease
Contract assets recognized	$	1,313		$	—
Reclassification of contract assets to contra-revenue	(473		)	—
Contract liabilities recognized and recorded to contra-revenue as a result of performance obligations satisfied	—			(147,830		)
Contract liabilities paid	—			138,015
Cash received in advance and not recognized as revenue	—			(67,938		)
Reclassification of cash received in advance to revenue as a result of performance obligations satisfied	—			67,639
Net change	$	840		$	(10,114	)

Changes in contract asset and contract liability balances during the year ended December 29, 2018 were as follows (in thousands):

	Contract assets increase (decrease)			Contract liabilities (increase) decrease
Contract assets recognized	$	2,100		$	—
Reclassification of contract assets to contra-revenue	(483		)	—
Contract asset impairment	(1,550		)	—
Contract liabilities recognized and recorded to contra-revenue as a result of performance obligations satisfied	—			(127,454		)
Contract liabilities paid	—			132,909
Cash received in advance and not recognized as revenue	—			(54,167		)
Reclassification of cash received in advance to revenue as a result of performance obligations satisfied	—			58,304
Impact of business combination	—			77
Net change	$	67		$	9,669

Contract liabilities for customer deposits paid to the Corporation prior to the satisfaction of performance obligations are recognized as revenue upon completion of the performance obligations. The amount of revenue recognized during the year ended December 28, 2019 that was included in the December 29, 2018 contract liabilities balance was $8.3 million. The amount of revenue recognized during the year ended December 29, 2018 that was included in the December 30, 2017 contract liabilities balance was $12.5 million, respectively.