Note 4 - Revenue Recognition

3 Months Ended

Mar. 31, 2023

Notes to Financial Statements

Revenue from Contract with Customer [Text Block]

NOTE 4: REVENUE RECOGNITION

The following table represents a disaggregation of revenue for the three months ended March 31, 2023 and 2022 (in thousands):

	Three months ended March 31, 2023
	Over time		Point in time		Total
Energy	$	2,516	$	14	$	2,530
Aerospace		264		251		515
Industrial		3,670		213		3,883
Research		1,272		495		1,767
Total	$	7,722	$	973	$	8,695

	Three months ended March 31, 2022
	Over time		Point in time		Total
Energy	$	899	$	7	$	906
Aerospace		-		705		705
Industrial		997		872		1,869
Research		706		470		1,176
Total	$	2,602	$	2,054	$	4,656

The energy market includes customers involved in the manufacture of silicon carbide wafers and batteries. Aerospace market includes customers that manufacture aircraft engines. Industrial end market consists of various end customers in diverse industries. Research market principally represents customers that are universities and other research institutions.

The Company has unrecognized contract revenue of approximately $10.1 million at March 31, 2023, which it expects to substantially recognize as revenue within the next twelve months.

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 may 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.

Contract assets and liabilities

Contract assets and contract liabilities on input method type contracts in progress are summarized as follows as of March 31, 2023 (in thousands):

Costs incurred on contracts in progress	$	13,229
Estimated earnings		8,832
	$	22,061
Billings to date		(19,492	)
		2,569
Deferred revenue related to non-system contracts		(124	)
	$	2,445
Included in accompanying condensed consolidated balance sheets under the following captions (in thousands):
Contract assets	$	3,706
Contract liabilities	$	1,261

Of the contract liability balances at December 31, 2022 and 2021 of $4.1 million and $1.7 million, respectively, $2.9 million and $1.2 million was recognized as revenue during the three months ended March 31, 2023 and 2022, respectively.