XML 33 R20.htm IDEA: XBRL DOCUMENT v3.20.2
Revenue from Contracts with Customers
 9 Months Ended
Jul. 04, 2020
Revenue from Contract with Customer [Abstract]  
Revenue from Contracts with Customers Revenue from Contracts with Customers
Significant Judgments
Revenue is recognized over time for arrangements with customers for which: (i) the Company's performance does not create an asset with an alternative use to the Company, and (ii) the Company has an enforceable right to payment, including reasonable profit margin, for performance completed to date. Revenue recognized over time is estimated based on costs incurred to date plus a reasonable profit margin. If either of the two conditions noted above are not met to recognize revenue over time, revenue is recognized following the transfer of control of such products to the customer, which typically occurs upon shipment or delivery depending on the terms of the underlying arrangement.
The Company recognizes revenue when a contract exists and when, or as, it satisfies a performance obligation by transferring control of a product or service to a customer. Contracts are accounted for when they have approval and commitment from both parties, the rights of the parties are identified, payment terms are identified, the contract has commercial substance and collectability of consideration is probable. A performance obligation is a promise in a contract to transfer a distinct good or service to the customer.
The Company generally enters into a master services arrangement that establishes the framework under which business will be conducted. These arrangements represent the master terms and conditions of the Company's services that apply to individual orders, but they do not commit the customer to work with, or to continue to work with, the Company nor do they obligate the customer to any specific volume or pricing of purchases. Moreover, these terms can be amended in appropriate situations.
Customer purchase orders are received for specific quantities with predominantly fixed pricing and delivery requirements. Thus, for the majority of our contracts, there is no guarantee of any revenue to the Company until a customer submits a purchase order. As a result, the Company generally considers its arrangement with a customer to be the combination of the master services arrangement and the purchase order. Most of the Company's arrangements with customers create a single performance obligation as the promise to transfer the individual manufactured product or service is capable of being distinct.
The Company’s performance obligations are satisfied over time as work progresses or at a point in time. A performance obligation is satisfied over time if the Company has an enforceable right to payment, including a reasonable profit margin. Determining if an enforceable right to payment includes a reasonable profit margin requires judgment and is assessed on a contract by contract basis.
Generally, there are no subjective customer acceptance requirements or further obligations related to goods or services provided; if such requirements or obligations exist, then a sale is recognized at the time when such requirements are completed and such obligations are fulfilled.
The Company does not allow for a general right of return. Net sales include amounts billed to customers for shipping and handling and out-of-pocket expenses. The corresponding shipping and handling costs and out-of-pocket expenses are included in cost of sales. Taxes assessed by a governmental authority that are both imposed on and concurrent with a specific revenue-producing transaction, that are collected by the Company from a customer, are excluded from net sales.
Contract Costs
For contracts requiring over time revenue recognition, the selection of the method to measure progress towards completion requires judgment and is based on the nature of the products or services to be provided. The Company uses a cost-based input measurement of progress because it best depicts the transfer of assets to the customer, which occurs as costs are incurred during the manufacturing process or as services are rendered. Under the cost-based measure of progress, the extent of progress towards completion is measured based on the costs incurred to date.
There were no other costs to obtain or fulfill customer contracts.
Disaggregated Revenue
The table below includes the Company’s revenue for the three and nine months ended July 4, 2020 and June 29, 2019, respectively, disaggregated by geographic reportable segment and market sector (in thousands):
Three Months Ended
July 4, 2020
Reportable Segment:
AMERAPACEMEATotal
Market Sector:
Healthcare/Life Sciences$106,130  $172,441  $51,503  $330,074  
Industrial/Commercial70,349  226,887  19,809  317,045  
Aerospace/Defense85,277  36,979  18,805  141,061  
Communications42,392  26,240  582  69,214  
     External revenue304,148  462,547  90,699  857,394  
Inter-segment sales1,793  19,720  1,147  22,660  
    Segment revenue$305,941  $482,267  $91,846  $880,054  
Three Months Ended
June 29, 2019
Reportable Segment:
AMERAPACEMEATotal
Market Sector:
Healthcare/Life Sciences$127,644  $149,312  $31,801  $308,757  
Industrial/Commercial91,347  133,374  23,174  247,895  
Aerospace/Defense80,351  47,496  23,580  151,427  
Communications64,799  26,279  487  91,565  
     External revenue364,141  356,461  79,042  799,644  
Inter-segment sales2,325  28,380  2,276  32,981  
    Segment revenue$366,466  $384,841  $81,318  $832,625  
Nine Months Ended
July 4, 2020
Reportable Segment:
AMERAPACEMEATotal
Market Sector:
Healthcare/Life Sciences$347,469  $440,199  $125,673  $913,341  
Industrial/Commercial249,530  608,815  55,503  913,848  
Aerospace/Defense286,963  123,161  60,545  470,669  
Communications101,186  74,925  3,198  179,309  
     External revenue985,148  1,247,100  244,919  2,477,167  
Inter-segment sales8,723  74,154  5,407  88,284  
    Segment revenue$993,871  $1,321,254  $250,326  $2,565,451  
Nine Months Ended
June 29, 2019
Reportable Segment:
AMERAPACEMEATotal
Market Sector:
Healthcare/Life Sciences$368,843  $443,073  $97,055  $908,971  
Industrial/Commercial269,273  381,453  66,547  717,273  
Aerospace/Defense218,578  137,342  58,482  414,402  
Communications222,944  87,238  3,411  313,593  
     External revenue1,079,638  1,049,106  225,495  2,354,239  
Inter-segment sales5,185  92,288  3,943  101,416  
    Segment revenue$1,084,823  $1,141,394  $229,438  $2,455,655  
For the three and nine months ended July 4, 2020, approximately 90% of the Company's revenue was recognized as products and services were transferred over time. For the three and nine months ended June 29, 2019, approximately 92% and 90% of the Company's revenue was recognized as products and services were transferred over time, respectively.
Contract Balances
The timing of revenue recognition, billings and cash collections results in billed accounts receivable, contract assets, and deferred revenue on the Company’s accompanying Condensed Consolidated Balance Sheets.
Contract Assets: For performance obligations satisfied at a point in time, billing occurs subsequent to revenue recognition, at which point the customer has been billed and the resulting asset is recorded within accounts receivable. For performance obligations satisfied over time as work progresses, the Company has an unconditional right to payment, which results in the
recognition of contract assets. The following table summarizes the activity in the Company's contract assets for the nine months ended July 4, 2020 and June 29, 2019 (in thousands):
Nine Months Ended
July 4,
2020		June 29,
2019
Contract assets, beginning of period$90,841  $—  
Cumulative effect adjustment at September 29, 2018—  76,417  
Revenue recognized during the period2,233,243  2,126,379  
Amounts collected or invoiced during the period(2,207,642) (2,097,595) 
Contract assets, end of period$116,442  $105,201  
Deferred Revenue: Deferred revenue is recorded when consideration is received from a customer prior to transferring goods or services to the customer under the terms of the contract, which is included in other accrued liabilities. As of July 4, 2020 and September 28, 2019 the balance of prepayments from customers that remained in other accrued liabilities was $61.7 million and $67.9 million, respectively. The advance payment is not considered a significant financing component because it is used to meet working capital demands that can be higher in the early stages of a contract, offset obsolete and excess inventory risks and to protect the company from the other party failing to adequately complete some or all of its obligations under the contract. Deferred revenue is recognized into revenue when all revenue recognition criteria are met. For performance obligations satisfied over time, recognition will occur as work progresses; otherwise deferred revenue will be recognized based upon shipping terms.