Note 4 - Revenue From Contracts With Customers

6 Months Ended

Jun. 30, 2019

Notes to Financial Statements

Revenue from Contract with Customer [Text Block]

NOTE 4: REVENUE FROM CONTRACTS WITH CUSTOMERS

The following table represents a disaggregation of revenue from contracts with customers for the

three

and

six

months ended

June 30, 2019

and

2018:

(in Thousands)

	Three Months Ended				Six Months Ended
Category	June 30, 2019		June 30, 2018		June 30, 2019		June 30, 2018
Aerospace	$	1,003	$	2,205	$	1,216	$	6,079
Industrial		1,810		1,962		3,387		5,208
Research		1,102		1,014		1,954		1,875
Point in time		1,003		1,254		1,838		2,427
Net Revenue	$	4,918	$	6,435	$	8,395	$	15,589

Judgment is required to evaluate assumptions including the amount of net contract revenues and the total estimated costs to determine our progress towards contract completion and to calculate the corresponding amount of revenue to recognize.

Changes in estimates for sales of systems occur for a variety of reasons, including but

not

limited to (i) build accelerations or delays, (ii) product cost forecast changes, (iii) cost related change orders or add-ons, or (iv) changes in other information used to estimate costs. Changes in estimates

may

have a material effect on the Company’s consolidated statements of operations. The table below outlines the impact on revenue of net changes in estimated transaction prices and input costs for systems related sales contracts (both increases and decreases) for the

three

and

six

months ended

June 30, 2019

and

2018,

as well as the number of projects that comprise such changes. Also included in the table is the net change in estimate as a percentage of the aggregate revenue for such projects.

	Three Months Ended			Three Months Ended
(In thousands)	June 30, 2019			June 30, 2018
Increase in revenue from net changes in transaction prices	$	0		$	34
(Decrease) increase in revenue from net changes in input cost estimates	$	(61	)	$	(479	)
Net (decrease) increase in revenue from net
Changes in estimates	$	(61	)	$	(445	)
Number of projects		26			15
Net change in estimate as a percentage of aggregate revenue for associated projects		(.9	%)		(9.2	%)

	Six Months Ended			Six Months Ended
(In thousands)	June 30, 2019			June 30, 2018
Increase in revenue from net changes in transaction prices	$	9		$	75
(Decrease) increase in revenue from net changes in input cost estimates	$	(240	)	$	(570	)
Net (decrease) increase in revenue from net
Changes in estimates	$	(231	)	$	(495	)
Number of projects		26			10
Net change in estimate as a percentage of aggregate revenue for associated projects		(.5	%)		(8.8	%)

For the

three

and

six

months ended

June 30, 2019

and

2018,

revenue (decreased) increased by (

$61,000

) and (

$231,000

) in

2019,

respectively, and (

$445,000

) and (

$495,000

) in

2018,

respectively, from net changes in transaction prices, input cost estimates, product cost overruns and product cost forecast changes related to redesign of certain systems.

Contract Assets and Liabilities

Contract assets consist of (i) retainage which represent the earned, but unbilled, portion for which payment is deferred by the customer until certain contractual milestones are met; and (ii) unbilled receivables which represent revenue that has been recognized in advance of billing the customer, which is common for long-term contracts. Contract liabilities consist of customer advances and billings in excess of revenue recognized.

During the

six

months ended

June 30, 2019

and

2018,

the increase (decrease) in contract assets of approximately

$.3

million and (

$3.1

million), respectively, was primarily caused by additional billed receivables during the

2018

period, for those projects that certain milestones had been reached.