Revenue Recognition

9 Months Ended

Sep. 30, 2019

Note 12. Revenue Recognition

The following tables disaggregate our revenue by major source for the three and nine-month periods ended September 30, 2019 and 2018 (excluding intercompany sales):

	Three Months Ended September 30, 2019
	Infrastructure Group		Aggregate and Mining Group			Energy Group			Total
Net Sales-Domestic:
Equipment sales	$	47,001	$	32,569		$	40,477		$	120,047
Pellet plant sales		–		–			–			–
Parts and component sales		24,107		19,592			11,063			54,762
Service and equipment installation revenue		2,318		2,399			1,575			6,292
Used equipment sales		940		232			1,434			2,606
Freight revenue		2,778		1,603			1,761			6,142
Other		119		(524	)		339			(66	)
Total domestic revenue		77,263		55,871			56,649			189,783

Net Sales-International:
Equipment sales		5,742		28,988			8,863			43,593
Parts and component sales		3,326		12,792			2,165			18,283
Service and equipment installation revenue		1,186		183			190			1,559
Used equipment sales		520		1,116			–			1,636
Freight revenue		182		633			(57	)		758
Other		–		34			161			195
Total international revenue		10,956		43,746			11,322			66,024

Total net sales	$	88,219	$	99,617		$	67,971		$	255,807

	Nine Months Ended September 30, 2019
	Infrastructure Group		Aggregate and Mining Group			Energy Group		Total
Net Sales-Domestic:
Equipment sales	$	191,879	$	134,660		$	121,027	$	447,566
Pellet plant sales		20,000		–			–		20,000
Parts and component sales		90,833		57,673			34,697		183,203
Service and equipment installation revenue		10,415		5,456			4,687		20,558
Used equipment sales		4,638		645			3,889		9,172
Freight revenue		9,754		4,999			4,892		19,645
Other		268		(2,506	)		919		(1,319	)
Total domestic revenue		327,787		200,927			170,111		698,825

Net Sales-International:
Equipment sales		27,413		72,453			19,041		118,907
Parts and component sales		15,034		34,408			7,083		56,525
Service and equipment installation revenue		4,634		883			227		5,744
Used equipment sales		751		1,953			70		2,774
Freight revenue		812		2,064			232		3,108
Other		17		297			192		506
Total international revenue		48,661		112,058			26,845		187,564

Total net sales	$	376,448	$	312,985		$	196,956	$	886,389

	Three Months Ended September 30, 2018
	Infrastructure Group		Aggregate and Mining Group			Energy Group		Total
Net Sales-Domestic:
Equipment sales	$	38,377	$	43,742		$	44,930	$	127,049
Pellet plant agreement sale charge		–		–			–		–
Parts and component sales		22,526		19,238			9,601		51,365
Service and equipment installation revenue		2,682		533			1,122		4,337
Used equipment sales		1,526		292			2,642		4,460
Freight revenue		2,527		1,887			1,439		5,853
Other		60		(395	)		1,437		1,102
Total domestic revenue		67,698		65,297			61,171		194,166

Net Sales-International:
Equipment sales		12,766		23,758			3,781		40,305
Parts and component sales		5,018		10,610			2,428		18,056
Service and equipment installation revenue		911		263			147		1,321
Used equipment sales		233		467			42		742
Freight revenue		437		1,212			241		1,890
Other		–		128			5		133
Total international revenue		19,365		36,438			6,644		62,447

Total net sales	$	87,063	$	101,735		$	67,815	$	256,613

	Nine Months Ended September 30, 2018
	Infrastructure Group			Aggregate and Mining Group			Energy Group		Total
Net Sales-Domestic:
Equipment sales	$	226,619		$	165,225		$	123,573	$	515,417
Pellet plant agreement sale charge		(75,315	)		–			–		(75,315	)
Parts and component sales		92,907			55,383			32,395		180,685
Service and equipment installation revenue		7,892			1,424			4,550		13,866
Used equipment sales		4,535			2,355			3,577		10,467
Freight revenue		9,781			5,608			4,389		19,778
Other		837			(1,967	)		3,862		2,732
Total domestic revenue		267,256			228,028			172,346		667,630

Net Sales-International:
Equipment sales		30,720			69,470			17,618		117,808
Parts and component sales		14,390			32,969			8,180		55,539
Service and equipment installation revenue		2,368			902			376		3,646
Used equipment sales		1,397			1,954			625		3,976
Freight revenue		1,121			3,509			918		5,548
Other		107			268			73		448
Total international revenue		50,103			109,072			27,790		186,965

Total net sales	$	317,359		$	337,100		$	200,136	$	854,595

Sales into major geographic regions for the three and nine-month periods ended September 30, 2019 and 2018 were as follows:

	Three Months Ended September 30,					Nine Months Ended September 30,
	2019			2018		2019		2018
United States	$	189,783		$	194,166	$	698,825	$	667,630
Other African countries		11,491			7,668		27,408		28,543
Asia (excl. China, Japan & Korea)		1,413			1,504		6,360		3,690
Australia		10,067			11,256		26,037		25,152
Canada		19,157			16,037		56,170		51,109
Mexico and Central America		(114	)		3,281		6,038		10,606
China, Japan &Korea		1,244			1,107		3,824		5,324
Europe		11,840			5,813		31,312		24,884
Middle East and North Africa		397			4,691		2,173		7,600
South America		7,273			9,925		21,908		28,159
West Indies		4,084			390		5,651		1,050
Other		(828	)		775		683		848
Total international		66,024			62,447		187,564		186,965
Total consolidated sales	$	255,807		$	256,613	$	886,389	$	854,595

Revenue is generally recognized when obligations under the terms of a contract are satisfied and generally occurs with the transfer of control of the product or services at a point in time. Revenue is measured as the amount of consideration the Company expects to receive in exchange for transferring goods or providing services. The Company generally obtains purchase authorizations from its customers for a specified amount of products at a specified price with specific delivery terms. A significant portion of the Company’s equipment sales represents equipment produced in the Company’s manufacturing facilities under short-term contracts for a customer’s project or equipment designed to meet a customer’s requirements. Most of the equipment sold by the Company is based on standard configurations, some of which are modified to meet customer’s needs or specifications. The Company provides customers with technical design and performance specifications and typically performs pre-shipment testing, when feasible, to ensure the equipment performs according to the customer’s need, regardless of whether the Company provides installation services in addition to selling the equipment. Significant down payments are required on many equipment orders with other terms allowing for payment shortly after shipment, typically 30 days. Taxes assessed by a governmental authority that are directly imposed on revenue-producing transactions between the Company and its customers, such as sales, use, value-added and some excise taxes, are excluded from revenue. Expected warranty costs for our standard warranties are expensed at the time the related revenue is recognized. Costs of obtaining sales contracts with an expected duration of one year or less are expensed as incurred. As contracts are typically fulfilled within one year from the date of the contract, revenue adjustments for a potential financing component or the costs to obtain the contract are not made.

Depending on the terms of the arrangement with the customer, recognition of a portion of the consideration received may be deferred and recorded as a contract liability if we have to satisfy a future obligation, such as to provide installation assistance, service work to be performed in the future without charge, floor plan interest to be reimbursed to our dealer customers, payments for extended warranties, annual rebates given to certain high volume customers or obligations for future estimated returns to be allowed based upon historical trends.

Certain contracts include terms and conditions pursuant to which the Company recognizes revenues upon the completion of production, and the equipment is subsequently stored at the Company’s plant at the customer’s request. Revenue is recorded on such contracts upon the customer’s assumption of title and risk of ownership, which transfers control of the equipment, and when collectability is reasonably assured. In addition, there must be a fixed schedule of delivery of the goods consistent with the customer’s business practices, the Company must not have retained any specific performance obligations such that the earnings process is not complete and the goods must have been segregated from the Company’s inventory prior to revenue recognition.

Service and Equipment Installation Revenue – Purchasers of certain of the Company’s equipment often contract with the Company to provide installation services. Installation is typically separately priced in the contract based upon observable market prices for stand-alone performance obligations or a cost plus margin approach when one is not available. The Company may also provide future services on equipment sold at the customer’s request, which may be for equipment repairs after the warranty period expires. Service is billed on a cost plus margin approach or at a standard rate per hour.

Used Equipment Sales – Used equipment is obtained by trade-in on new equipment sales, as a separate purchase in the open market or from the Company’s equipment rental business. Revenues from the sale of used equipment are recognized upon transfer of control to the customer at agreed upon pricing.

Freight Revenue – Under a practical expedient allowed under ASU No. 2014-09, the Company records revenues earned for shipping and handling as revenue at the time of shipment, regardless of whether or not it is identified as a separate performance obligation. The cost of shipping and handling is classified as cost of goods sold concurrently.

Other Revenues – Miscellaneous revenues and offsets not associated with one of the above classifications include rental revenues, extended warranty revenues, early pay discounts and floor plan interest reimbursements.