Revenue

9 Months Ended

Sep. 28, 2024

Revenue from Contract with Customer [Abstract]

Revenue

Revenue

On September 28, 2024, we had $611.9 million of outstanding performance obligations, which we refer to as total backlog. In conjunction with the customer bankruptcy discussed in Note 1, we have removed all outstanding backlog in the third quarter of 2024, approximately $9.3 million, related to such customer. We expect to recognize approximately $519.8 million of our outstanding performance obligations as revenue over the next twelve months and the balance thereafter.

The Company's contract assets and contract liabilities consist primarily of costs and profits in excess of billings and billings in excess of cost and profits, respectively. The following table presents the beginning and ending balances of contract assets and contract liabilities during the nine months ended September 28, 2024:

(In thousands)	Contract Assets		Contract Liabilities
Beginning Balance, January 1, 2024	$	46,321	$	22,888
Ending Balance, September 28, 2024	$	57,489	$	20,210

The increase in contract assets reflects the net impact of new revenue recognized in excess of billings exceeding billing of previously unbilled revenue during the period, partially offset by a $3.5 million revision of estimated costs to complete certain long-term mass transit Test contracts which was recorded in the second quarter of 2024. The revision resulted in reduced revenue recognized during the nine months ended September 28, 2024 due to lower estimates of the percentage of work completed on the programs. The decrease in contract liabilities reflects the net impact of revenue recognized in excess of new customer advances or deferred revenues recorded.

We recognized $6.3 million and $9.3 million during the three months ended and $16.4 million and $22.1 million during the nine months ended September 28, 2024 and September 30, 2023, respectively, in revenues that were included in the contract liability balance at the beginning of the period.

The Company recognizes an asset for certain, material costs to fulfill a contract if it is determined that the costs relate directly to a contract or an anticipated contract that can be specifically identified, generate or enhance resources that will be used in satisfying performance obligations in the future, and are expected to be recovered. Such costs are amortized on a systematic basis that is consistent with the transfer to the customer of the goods to which the asset relates. Start-up costs are expensed as incurred. Capitalized fulfillment costs are included in Work in Progress within Inventories in the accompanying Consolidated Condensed Balance Sheets. Should future orders not materialize or it is determined the costs are no longer probable of

recovery, the capitalized costs are written off. Capitalized fulfillment costs were $4.2 million and $4.7 million on September 28, 2024 and December 31, 2023, respectively. Amortization of fulfillment costs recognized within Cost of Products Sold was approximately $0.1 million and $3.1 million for the three and nine months ended September 28, 2024. No amortization of fulfillment costs was recorded in 2023.

The following table presents our revenue disaggregated by Market Segments as follows:

	Nine Months Ended				Three Months Ended
(In thousands)	September 28, 2024		September 30, 2023		September 28, 2024		September 30, 2023
Aerospace Segment
Commercial Transport	$	383,679	$	308,016	$	133,850	$	101,724
Military Aircraft	63,545		44,335		21,685		16,687
General Aviation	56,643		60,656		18,077		16,193
Other	14,268		23,076		3,942		7,500
Aerospace Total	518,135		436,083		177,554		142,104
Test Systems Segment
Government & Defense	68,751		57,831		26,144		20,818
Test Systems Total	68,751		57,831		26,144		20,818
Total	$	586,886	$	493,914	$	203,698	$	162,922

The following table presents our revenue disaggregated by Product Lines as follows:

	Nine Months Ended				Three Months Ended
(In thousands)	September 28, 2024		September 30, 2023		September 28, 2024		September 30, 2023
Aerospace Segment
Electrical Power & Motion	$	263,919	$	185,712	$	90,467	$	64,312
Lighting & Safety	135,162		116,967		46,921		38,496
Avionics	83,716		83,011		29,151		22,347
Systems Certification	12,272		19,832		4,460		6,535
Structures	8,798		7,485		2,613		2,914
Other	14,268		23,076		3,942		7,500
Aerospace Total	518,135		436,083		177,554		142,104
Test Systems	68,751		57,831		26,144		20,818
Total	$	586,886	$	493,914	$	203,698	$	162,922