Revenue

Healthcare Product and Product-Related Revenues and Services Revenue

Healthcare Product and product-related revenue are generated from the sale of gamma cameras and post-warranty maintenance service contracts within our Diagnostic Imaging reportable segment.

Healthcare Imaging services revenue are generated from providing diagnostic imaging services to customers within our Diagnostic Services and Mobile Healthcare reportable segments. Services revenue also includes lease income generated from interim rentals of imaging systems to our customers.

Building and Construction

Building and Construction revenue are generated from selling modular buildings for both single-family residential homes and larger commercial building projects from KBS, Builders, Inc. (“KBS”), and selling structural wall panels, permanent wood foundation systems and other engineered wood products from EdgeBuilder and GlenBrook (“Glenbrook” and together with EdgeBuilder, “EBGL”).

Real Estate and Investments

Star Real Estate Holdings USA, Inc. (“SRE”) generates revenue from lease of commercial properties and equipment and Lone Star Value Management, LLC (“LSVM”), a Connecticut based exempt reporting advisor, provides services that include investment advisory services, and the servicing of pooled investment vehicles.

Revenue Recognition

Revenue is recognized upon transfer of control of promised products or services to customers in an amount that reflects the consideration we expect to receive in exchange for those products or services. Taxes collected from customers, which are subsequently remitted to governmental authorities, are excluded from revenue.

The majority of our contracts have a single performance obligation, as we provide a series of distinct services that are substantially the same and are transferred with the same pattern to the customer. For contracts with multiple performance obligations, we allocate the total transaction price to each performance obligation using our best estimate of the standalone selling price of each distinct good or service in the contract. We use an observable price to determine the stand-alone selling price for separate performance obligations or a cost plus margin approach when one is not available. For bill and hold sales, we determine when the customer obtains control of the product on a case-by-case basis to determine the amount of revenue to recognize each period.

Our products are generally not sold with a right of return and the Company does not provide significant credits or incentives, which may be variable consideration when estimating the amount of revenue to be recognized.

Disaggregation of Revenue

The following table presents our revenues disaggregated by major source (in thousands):



	Year Ended December 31, 2019
	Diagnostic Services		Diagnostic Imaging		Mobile Healthcare		Building and Construction		Real Estate and Investments		Total
Major Goods/Service Lines
Mobile Imaging	$	46,531	$	—	$	31,251	$	—	$	—	$	77,782
Camera Sales	—		7,213		—		—		—		7,213
Camera Support	—		6,659		—		—		—		6,659
Healthcare Revenue from Contracts with Customers	46,531		13,872		31,251		—		—		91,654
Lease Income	1,192		—		10,000		40		—		11,232
Building and Construction	—		—		—		11,217		—		11,217
Real Estate and Investments	—		—		—		—		82		82
Total Revenues	$	47,723	$	13,872	$	41,251	$	11,257	$	82	$	114,185

Timing of Revenue Recognition
Services and goods transferred over time	$	47,723	$	6,090	$	40,731	$	40	$	—	$	94,584
Services and goods transferred at a point in time	—		7,782		520		11,217		82		19,601
Total Revenues	$	47,723	$	13,872	$	41,251	$	11,257	$	82	$	114,185



	Year Ended December 31, 2018
	Diagnostic Services		Diagnostic Imaging		Mobile Healthcare		Building and Construction		Real Estate and Investments		Total
Major Goods/Service Lines
Mobile Imaging	$	48,694	$	—	$	32,865	$	—	$	—	$	81,559
Camera Sales	—		4,914		—		—		—		4,914
Camera Support	—		6,951		—		—		—		6,951
Healthcare Revenue from Contracts with Customers	48,694		11,865		32,865		—		—		93,424
Lease Income	562		118		10,076		—		—		10,756
Building and Construction	—		—		—		—		—		—
Real Estate and Investments	—		—		—		—		—		—
Total Revenues	$	49,256	$	11,983	$	42,941	$	—	$	—	$	104,180

Timing of Revenue Recognition
Services and goods transferred over time	$	45,862	$	6,555	$	42,477	$	—	$	—	$	94,894
Services and goods transferred at a point in time	3,394		5,428		464		—		—		9,286
Total Revenues	$	49,256	$	11,983	$	42,941	$	—	$	—	$	104,180

Nature of Goods and Services

Mobile Imaging

Within our Diagnostic Services and Mobile Healthcare reportable segments, our sales are derived from providing services and materials to our customers, primarily physician practices and hospitals, that allow them to perform diagnostic imaging services at their site. We typically bundle our services in providing staffing, our imaging systems, licensing, radiopharmaceuticals, and supplies depending on our customers’ needs. Our contracts with customers are typically entered into annually and are billed on a fixed rate per-day or per-scan basis, depending on terms of the contract. For the majority of these contracts, the Company has the right to invoice the customer in an amount that directly corresponds with the value to the customer of the Company’s performance to date. The Company uses the practical expedient to recognize revenue corresponding with amounts we have the right to invoice for services performed.

Camera

Within our Diagnostic Imaging segment, camera revenues are generated from the sale of internally developed solid-state gamma camera imaging systems. We recognize revenue upon transfer of control to the customer, which is generally upon delivery and acceptance. We also provide installation services and training on cameras we sell, primarily in the United States. Installation and initial training is generally performed shortly after delivery. The Company recognizes revenues for installation and training over time as the customer receives and consumes benefits provided as the Company performs the installation services.

Our sale of imaging systems includes a one-year warranty that we account for as an assurance-type warranty. The expected costs associated with our standard warranties and field service actions continue to be recognized as expense when cameras are sold. Maintenance service contracts sold beyond the term of our standard warranties are accounted for as a service-type warranty and revenue is deferred and recognized ratably over the period of the obligation.

Camera Support

Within our Diagnostic Imaging segment, camera support revenue is derived from the sale of separately-priced extended maintenance contracts to camera owners, training, and the sale of parts to customers that do not have an extended warranty. Our separately priced service contracts range from 12 to 48 months. Service contracts are usually billed at the beginning of the contract period or at periodic intervals (e.g., monthly, quarterly, or annually) and revenue is recognized ratably over the term of the agreement.

Services and training revenues are recognized in the period the services and training are performed. Revenue for sales of parts are recognized when the parts are delivered to the customer and control is transferred.

Lease Income

Within primarily our Mobile Healthcare segment, we also generate income from interim rentals of our imaging systems to customers that are in the midst of new construction or refurbishing their current facilities. Rental contracts are structured as either a weekly or monthly payment arrangement and are accounted for as operating leases. Revenues are recognized on a straight-line basis over the term of the rental.

Within our Building and Construction segment, KBS subleased the manufacturing building located in Waterford, Maine to a commercial tenant pursuant to a rental agreement with an initial 5 year term that commenced on September 6, 2019. The rental agreement is structured with a monthly payment arrangement and is accounted for as operating lease.

Building and Construction

Within the Building and Construction segment, ATRM, through its wholly-owned subsidiaries KBS, EdgeBuilder, and Glenbrook, services residential and commercial construction projects by manufacturing modular housing units and other products and supplies general contractors with building materials. KBS manufactures modular buildings for both single-family residential homes and larger, commercial building projects. EdgeBuilder manufactures structural wall panels, permanent wood foundation systems and other engineered wood products, and GlenBrook is a retail supplier of lumber and other building supplies.

Deferred Revenues

We record deferred revenues when cash payments are received or are due in advance of our performance, including amounts that are refundable. We have determined our contracts do not include a significant financing component. The majority of our deferred revenue relates to payments received on camera support post-warranty service contracts, which are billed at the beginning of the annual contract period or at periodic intervals (e.g., monthly, quarterly, or annually).

Changes in the deferred revenues for the year ended December 31, 2019, is as follows (in thousands):



Balance at December 31, 2017	$	2,375
Revenue recognized that was included in balance at beginning of the year	(1,380		)
Deferred revenue, net, related to contracts entered into during the year	718
Balance at December 31, 2018	1,713
ATRM beginning balance	317
Revenue recognized that was included in balance at beginning of the year	(1,477		)
Deferred revenue, net, related to contracts entered into during the year	1,248
Balance at December 31, 2019	$	1,801

As of December 31, 2019 and 2018, non-current deferred revenue is $15 thousand and $26 thousand, respectively.

The Company has elected to use the practical expedient under ASC 606 to exclude disclosures of unsatisfied remaining performance obligations for (i) contracts having an original expected length of one year or less or (ii) contracts for which the practical expedient has been applied to recognize revenue at the amount for which it has a right to invoice.

Contract Costs

We recognize an asset for the incremental costs of obtaining a contract with a customer if we expect the benefit of those costs to be longer than one year. The Company applies a practical expedient to expense costs as incurred for costs to obtain a contract when the amortization period would have been one year or less. These costs mainly include the Company’s internal sales commissions; under the terms of these programs these are generally earned and the costs are recognized at the time the revenue is recognized.