Revenue from Contracts with Customers

12 Months Ended

Jan. 01, 2022

Revenue from Contract with Customer [Abstract]

Revenue from Contracts with Customers

Revenue from Contracts with Customers

Disaggregation of Revenue

Revenue from contracts with customers disaggregated by product category is as follows (in thousands):

	2021		2020		2019
Systems and storage	$	833,220	$	741,183	$	951,965
Seating	481,739		489,342		583,245
Other	119,026		135,186		161,976
Total workplace furnishings	1,433,985		1,365,711		1,697,186
Residential building products	750,423		589,652		549,761
	$	2,184,408	$	1,955,363	$	2,246,947

Sales by product category are subject to similar economic factors and market conditions. See “Note 16. 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 up-front to certain workplace furnishings 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. 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):

	January 1, 2022		January 2, 2021
Trade receivables (1)	$	239,955	$	207,971
Contract assets (current) (2)	$	1,471	$	761
Contract assets (long-term) (3)	$	18,198	$	2,486
Contract liabilities (4)	$	58,716	$	53,070

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 January 1, 2022 were as follows (in thousands):

	Contract assets increase (decrease)		Contract liabilities (increase) decrease
Contract assets recognized	$	17,294	$	—
Reclassification of contract assets to contra-revenue	(872)		—
Contract liabilities recognized and recorded to contra-revenue as a result of performance obligations satisfied	—		(121,654)
Contract liabilities paid	—		122,127
Cash received in advance and not recognized as revenue	—		(115,242)
Reclassification of cash received in advance to revenue as a result of performance obligations satisfied	—		109,919
Impact of business combinations	—		(796)
Net change	$	16,422	$	(5,646)

The increase in contract assets in 2021 is due to payments made in connection with multi-year distribution agreements in the workplace furnishings segment.

Changes in contract asset and contract liability balances during the year ended January 2, 2021 were as follows (in thousands):

	Contract assets increase (decrease)		Contract liabilities (increase) decrease
Contract assets recognized	$	358	$	—
Reclassification of contract assets to contra-revenue	(668)		—
Contract liabilities recognized and recorded to contra-revenue as a result of performance obligations satisfied	—		(122,501)
Contract liabilities paid	—		136,876
Cash received in advance and not recognized as revenue	—		(82,251)
Reclassification of cash received in advance to revenue as a result of performance obligations satisfied	—		76,047
Impact of business combination	—		(6,269)
Net change	$	(310)	$	1,902

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 January 1, 2022 that was included in the January 2, 2021 contract liabilities balance was $21.1 million. The amount of revenue recognized during the year ended January 2, 2021 that was included in the December 28, 2019 contract liabilities balance was $8.6 million.