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REVENUE RECOGNITION
 6 Months Ended
Aug. 31, 2024
Revenue from Contract with Customer [Abstract]  
REVENUE RECOGNITION

NOTE 3: REVENUE RECOGNITION

 

The Company’s sales revenue is derived primarily from short term contracts with customers, which, on average, are in effect for less than twelve months. Sales revenue from manufactured equipment transferred at a single point in time accounts for a majority of the Company’s revenue.

 

Sales revenue is recognized when control of the Company’s manufactured equipment is transferred to its customers, in an amount that reflects the consideration the Company expects to receive based upon the agreed transaction price. The Company’s performance obligations are satisfied when its customers take control of the purchased equipment, which is based on the contract terms. Based on prior experience, the Company reasonably estimates its sales returns and warranty reserves. Sales are presented net of discounts and allowances. Discounts and allowances are determined when a sale is negotiated. The Company does not grant its customers or independent representatives, the ability to return equipment nor does it grant price adjustments after a sale is complete.

 

The Company does not capitalize any sales commission costs related to the acquisition of a contract. All commissions related to a performance obligation that are satisfied at a point in time are expensed when the customer takes control of the purchased equipment.

 

The Company applies the practical expedient in paragraph ASC 606-10-50-14 and does not disclose information about remaining performance obligations that have original expected durations of one-year or less.

 

At August 31, 2024, the Company had received approximately $3,225,000 in cash deposits, representing contract liabilities.

 

At February 29, 2024, the Company had received approximately $3,420,000 in cash deposits, representing contract liabilities, and had issued Letters of Credit in the amount of $72,000 to secure these cash deposits. During the six months ended August 31, 2024, the Company recognized $2,641,000 of these deposits as revenue.

 

The Company’s sales revenue by product line is as follows:

    Three Months Ended August 31,   Six Months Ended August 31,
    2024     % of total   2023     % of total   2024     % of total   2023     % of total
Fluxing Systems   $ 119,000     2%   $ 204,000     4%   $ 253,000     3%   $ 440,000     5%
Integrated Coating Systems     2,023,000     39%     853,000     15%     2,770,000     27%     1,162,000     12%
Multi-Axis Coating Systems     1,931,000     38%     2,923,000     52%     4,595,000     45%     4,686,000     51%
OEM Systems     205,000     4%     535,000     9%     537,000     5%     810,000     9%
Spare Parts, Services and Other     884,000     17%     1,124,000     20%     2,038,000     20%     2,144,000     23%
TOTAL   $ 5,162,000         $ 5,639,000         $ 10,193,000         $ 9,242,000