Revenue Recognition

6 Months Ended

Jun. 30, 2020

Revenue from Contract with Customer [Abstract]

Revenue Recognition

Revenue Recognition:

The following tables disaggregate our revenue by major source for the three and six-month periods ended June 30, 2020 and 2019 (excluding intercompany sales):

	Three Months Ended June 30, 2020
(in thousands)	Infrastructure Solutions		Materials Solutions		Total
Net Sales-Domestic:
Equipment sales	$	104,640	$	43,243	$	147,883
Parts and component sales	35,860		17,739		53,599
Service and equipment installation revenue	6,181		398		6,579
Used equipment sales	7,148		413		7,561
Freight revenue	4,578		1,413		5,991
Other	55		(149)		(94)
Total domestic revenue	158,462		63,057		221,519
Net Sales-International:
Equipment sales	15,565		12,436		28,001
Parts and component sales	5,902		6,889		12,791
Service and equipment installation revenue	668		495		1,163
Used equipment sales	814		285		1,099
Freight revenue	378		246		624
Other	62		40		102
Total international revenue	23,389		20,391		43,780
Total net sales	$	181,851	$	83,448	$	265,299
	Six Months Ended June 30, 2020
(in thousands)	Infrastructure Solutions		Materials Solutions		Total
Net Sales-Domestic:
Equipment sales	$	205,059	$	84,540	$	289,599
Parts and component sales	88,501		36,215		124,716
Service and equipment installation revenue	12,943		825		13,768
Used equipment sales	14,308		413		14,721
Freight revenue	10,626		2,722		13,348
Other	(130)		(621)		(751)
Total domestic revenue	331,307		124,094		455,401
Net Sales-International:
Equipment sales	34,989		26,876		61,865
Parts and component sales	14,236		16,146		30,382
Service and equipment installation revenue	1,510		715		2,225
Used equipment sales	1,420		1,031		2,451
Freight revenue	944		589		1,533
Other	63		227		290
Total international revenue	53,162		45,584		98,746
Total net sales	$	384,469	$	169,678	$	554,147

	Three Months Ended June 30, 2019
(in thousands)	Infrastructure Solutions		Materials Solutions		Total
Net Sales-Domestic:
Equipment sales	$	106,332	$	46,887	$	153,219
Pellet plant sales	20,000		—		20,000
Parts and component sales	35,862		18,921		54,783
Service and equipment installation revenue	6,436		2,431		8,867
Used equipment sales	3,390		—		3,390
Freight revenue	4,707		1,801		6,508
Other	146		(700)		(554)
Total domestic revenue	176,873		69,340		246,213
Net Sales-International:
Equipment sales	10,435		24,416		34,851
Parts and component sales	7,860		11,438		19,298
Service and equipment installation revenue	2,089		308		2,397
Used equipment sales	191		371		562
Freight revenue	496		762		1,258
Other	21		202		223
Total international revenue	21,092		37,497		58,589
Total net sales	$	197,965	$	106,837	$	304,802
	Six Months Ended June 30, 2019
(in thousands)	Infrastructure Solutions		Materials Solutions		Total
Net Sales-Domestic:
Equipment sales	$	225,428	$	102,091	$	327,519
Pellet plant sales	20,000		—		20,000
Parts and component sales	90,360		38,080		128,440
Service and equipment installation revenue	11,210		3,056		14,266
Used equipment sales	6,153		413		6,566
Freight revenue	10,107		3,396		13,503
Other	729		(1,981)		(1,252)
Total domestic revenue	363,987		145,055		509,042
Net Sales-International:
Equipment sales	31,849		43,465		75,314
Parts and component sales	16,626		21,616		38,242
Service and equipment installation revenue	3,485		700		4,185
Used equipment sales	301		837		1,138
Freight revenue	918		1,430		2,348
Other	48		265		313
Total international revenue	53,227		68,313		121,540
Total net sales	$	417,214	$	213,368	$	630,582

Sales into major geographic regions were as follows:

	Three Months Ended June 30,				Six Months Ended June 30,
(in thousands)	2020		2019		2020		2019
United States	$	221,519	$	246,213	$	455,401	$	509,042
Canada	12,997		14,020		27,661		37,013
Australia	5,540		7,156		11,335		15,969
Africa	4,168		8,827		10,799		15,918
South America	11,164		7,581		19,960		14,635
Europe	4,831		12,982		14,206		19,472
Central America	917		2,602		2,307		6,152
China, Japan & Korea	1,777		440		4,047		2,580
Asia (excl. China, Japan & Korea)	1,159		2,816		1,594		4,947
West Indies	56		188		4,812		1,566
Middle East	1,167		925		2,016		1,776
Other	4		1,052		9		1,512
Total foreign	43,780		58,589		98,746		121,540
Total consolidated sales	$	265,299	$	304,802	$	554,147	$	630,582

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. As of June 30, 2020, the Company had contract assets of $25 thousand, and contract liabilities of $5.1 million, including $3.4 million of deferred revenue related to extended warranties. As of December 31, 2019, the Company had contract assets of $4.7 million, primarily related to billings on one large ($7.2 million) order in the Infrastructure Solutions segment, and contract liabilities of $6.5 million, including $3.5 million of deferred revenue related to extended warranties.

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, for annual rebates given to certain high volume customers or for 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. 2014-9, 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 primarily include rental revenues, extended warranty revenues, early pay discounts and floor plan interest reimbursements.

The Company currently monitors credit levels and financial conditions of customers on a continuing basis. After considering historical trends for uncollectible accounts, current economic conditions and specific customer recent payment history and financial stability, each business unit records an allowance for doubtful accounts at a level which management believes is sufficient to cover all probable future credit losses as of the balance sheet date. The current policy for calculating the reserve uses the rolling twelve-month bad debt write-offs, net of recoveries, divided by the rolling twelve-month average accounts receivable balance. The Company believes the twelve-month “look-back” is most representative of current credit worthiness of the customer. After adjustments for credit balances, that percentage is then applied to the current month end accounts receivable balance to arrive at the amount to reserve. Once the reserve is calculated, each business unit reviews their accounts receivable for any known customer accounts that should be added to the reserve based on their expectation of future economic conditions that might impact the customer, which would currently include the impact of COVID-19. At a minimum, the reserve balance should equal the calculated amount before specifically reserved items. Thus, each business unit records their accounts receivable at an amount expected to be collected and, therefore, incorporates expected credit losses.

Amounts are deemed past due when they exceed the payment terms agreed to by the customer in the sales contract. Past due amounts are charged off when reasonable collection efforts have been exhausted and the amounts are deemed uncollectible by management. The majority of the Company’s receivables within the scope of this topic are related to equipment that requires significant down payment with other terms allowing for payment shortly after shipment, typically 30 days, which the Company believes is very short term in nature. The significant down payment requirement leads to lower write-offs because it requires an upfront commitment by customers and they ultimately don’t want to lose their upfront investment. The 30-day payment requirement after shipment allows us to quickly assess where a customer stands on their account and lets us begin collect efforts.