XML 122 R9.htm IDEA: XBRL DOCUMENT v3.21.2
Revenue Recognition
 9 Months Ended
Sep. 30, 2021
Deferred Revenue Disclosure [Abstract]  
Revenue Recognition Revenue Recognition
As part of the Company's revenue recognition analysis, it concluded that it has two separate performance obligations, and accordingly, two separate revenue streams: products and services. Under the definition of a contract as defined by Accounting Standards Codification 606, Revenue From Contracts With Customers ("ASC 606"), the Company considers contracts to be created at the time an order to purchase product and services is agreed upon regardless of whether or not there is a written contract.

Performance Obligations

The Company has two operating segments; the Lawson segment and the Bolt Supply segment.

The Lawson segment has two distinct performance obligations from contracts with its customers: a product performance obligation and a service performance obligation. While the Company offers both a product and a service obligation, customers receive one invoice per transaction with no price breakout between these obligations. The Company does not separately price performance obligations.

The Lawson segment generates revenue primarily from the sale of MRO products to its customers. Revenues related to product sales is recognized at the time that control of the product has been transferred to the customer, either at the time the product is shipped or the time the product has been received by the customer. The Company does not commit to long-term contracts to sell customers a certain minimum quantity of products.

The Lawson segment, including the recent Partsmaster acquisition, offers a vendor managed inventory ("VMI") service proposition to its customers. A portion of these services, primarily related to stocking of product and maintenance of the MRO inventory, is provided a short period of time after control of the purchased product has been transferred to the customer. Since some components of VMI service have not been provided at the time the control of the product transfers to the customer, that portion of expected consideration is deferred until the time that those services have been provided.

The Bolt Supply segment provides product sales and does not provide VMI services or other services. Revenue is recognized at the time that control of the product has been transferred to the customer which is either upon delivery or shipment depending on the terms with the customer.

Disaggregated revenue by geographic area follows:
Three Months Ended September 30,Nine Months Ended September 30,
(Dollars in thousands)2021202020212020
United States$85,343 $72,030 $256,577 $202,709 
Canada20,227 18,247 59,089 50,749 
Consolidated total$105,570 $90,277 $315,666 $253,458 
Disaggregated revenue by product type follows:
Three Months Ended September 30,Nine Months Ended September 30,
2021202020212020
Fastening Systems22.2 %22.3 %21.4 %22.7 %
Cutting Tools and Abrasives15.0 %12.2 %14.8 %13.1 %
Fluid Power13.0 %12.6 %13.2 %13.2 %
Specialty Chemicals10.5 %13.3 %10.1 %11.7 %
Electrical10.4 %10.0 %10.4 %10.2 %
Aftermarket Automotive Supplies7.6 %7.0 %7.2 %7.1 %
Safety5.1 %7.0 %5.0 %6.4 %
Welding and Metal Repair1.4 %1.4 %1.6 %1.4 %
Other14.8 %14.2 %16.3 %14.2 %
Consolidated Total100.0%100.0%100.0%100.0%

Activities as lessor

Prior to acquisition, Partsmaster leased parts washer machines to customers through its Torrents leasing program. The Torrents leasing program comprised a minor portion of the Partsmaster business. The Company will continue the leasing program for the foreseeable future. These leases are classified as operating leases. The leased machines are recognized as fixed assets on the Company's consolidated balance sheet and the leasing revenue is recognized on a straight line basis over the leasing term. The Torrents machine leasing program generated $0.8 million and $2.2 million of revenue in the three and nine months ended September 30, 2021. The carrying value of the Torrents leasing assets as of September 30, 2021 is $1.0 million. The Company has adopted the practical expedient not to separate non-lease components that would be within the scope of ASC 606 from the associated lease components as the relevant criteria under ASC 842 are met.