Revenue

6 Months Ended

Jun. 30, 2022

Revenue from Contract with Customer [Abstract]

Revenue

Note 9 – Revenue

The Company’s revenues are generated primarily from its manufacturing services, which entails the sale of manufactured products built to customer specifications. The Company also generates revenue from design, development and engineering services, in addition to the sale of other inventory.

Revenue is measured based on the consideration specified in a contract with a customer. The Company recognizes revenue when it satisfies a performance obligation by transferring control over a manufactured product to a customer. The Company’s contracts with customers are generally short-term in nature. The Company applies the optional exemption related to short-term performance obligations and does not disclose information about remaining performance obligations that have original expected durations of one year or less. Customers are generally billed when the product is shipped or as services are performed. Under the majority of the Company’s manufacturing contracts with customers, the customer controls all of the work-in-progress as products are being built. Revenues under these contracts are recognized progressively based on the cost-to-cost method. For other manufacturing contracts, the customer does not take control of the product until it is completed. Under these contracts, the Company recognizes revenue upon transfer of control of the product to the customer, which is generally when goods are shipped. Revenue from design, development and engineering services is recognized over time as the services are performed. As a general matter, the Company assumes no significant obligations after shipment as it typically warrants workmanship only. Therefore, the warranty provisions are generally not significant.

If the Company records revenue, but does not issue an invoice, a contract asset is recognized. The contract asset is transferred to accounts receivable when the entitlement to payment becomes unconditional.

Taxes assessed by governmental authorities 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 revenue.

Shipping and handling costs associated with outbound freight after control over a product has transferred to a customer are accounted for as fulfillment costs and are included in cost of sales.

Disaggregation of revenue

In the following tables, revenue is disaggregated by market sector. The tables also include a reconciliation of the disaggregated revenue with the reportable operating segments. Elimination of intersegment sales includes intersegment sales between reportable operating segments.

	Reportable Operating Segments
	Three Months Ended June 30, 2022
(in thousands)	Americas		Asia		Europe		Total
Market Sector:
Industrials	$	22,941	$	100,495	$	35,400	$	158,836
A&D		77,803		8,667		3,427		89,897
Medical		86,879		69,459		9,896		166,234
Semi-Cap		68,706		85,978		20,215		174,899
Computing		57,045		11,591		—		68,636
Telecommunications		37,551		31,976		—		69,527
External revenue		350,925		308,166		68,938		728,029
Elimination of intersegment sales		9,350		12,296		912		22,558
Segment revenue	$	360,275	$	320,462	$	69,850	$	750,587

	Six Months Ended June 30, 2022
(in thousands)	Americas		Asia		Europe		Total
Market Sector:
Industrials	$	41,667	$	184,953	$	69,362	$	295,982
A&D		146,504		15,682		8,898		171,084
Medical		154,858		108,452		19,797		283,107
Semi-Cap		135,029		182,796		40,511		358,336
Computing		101,671		22,021		—		123,692
Telecommunications		65,065		66,741		105		131,911
External revenue		644,794		580,645		138,673		1,364,112
Elimination of intersegment sales		21,061		27,063		1,518		49,642
Segment revenue	$	665,855	$	607,708	$	140,191	$	1,413,754

	Three Months Ended June 30, 2021
(in thousands)	Americas		Asia		Europe		Total
Market Sector:
Industrials	$	20,358	$	61,115	$	18,433	$	99,906
A&D		91,427		73		5,180		96,680
Medical		47,920		50,386		10,599		108,905
Semi-Cap		55,492		66,781		16,931		139,204
Computing		32,766		6,832		—		39,598
Telecommunications		32,007		28,222		140		60,369
External revenue		279,970		213,409		51,283		544,662
Elimination of intersegment sales		12,300		9,130		337		21,767
Segment revenue	$	292,270	$	222,539	$	51,620	$	566,429

	Six Months Ended June 30, 2021
(in thousands)	Americas		Asia		Europe		Total
Market Sector:
Industrials	$	41,354	$	116,525	$	37,479	$	195,358
A&D		174,914		73		11,074		186,061
Medical		95,344		91,170		30,581		217,095
Semi-Cap		104,358		115,542		32,414		252,314
Computing		68,104		15,180		—		83,284
Telecommunications		61,965		53,941		365		116,271
External revenue		546,039		392,431		111,913		1,050,383
Elimination of intersegment sales		23,069		18,412		587		42,068
Segment revenue	$	569,108	$	410,843	$	112,500	$	1,092,451

During the six months ended June 30, 2022 and 2021, 90.2% and 90.0%, respectfully, of the Company’s revenue was recognized as products and services that were transferred over time.

The timing of revenue recognition, billings and cash collections result in billed accounts receivable, contract assets and advance payments from customers.

As of June 30, 2022 and December 31, 2021, the Company had $179.2 million and $155.2 million, respectively, in contract assets from contracts with customers. The contract assets primarily relate to the Company’s right to consideration for work completed but not billed at the reporting date. The contract assets are transferred to accounts receivable when the rights become unconditional.

Significant changes in the contract asset balance during the period are as follows:

	Six Months Ended June 30,
(in thousands)	2022			2021
Beginning balance as of December 31	$	155,243		$	142,779
Revenue recognized		1,233,229			944,052
Amounts collected or invoiced		(1,209,300	)		(932,202	)
Ending balance as of June 30	$	179,172		$	154,629

As of June 30, 2022 and December 31, 2021, the Company had $173.6 million and $118.1 million, respectively, in advance payments from customers. Of those amounts, $144.9 million and $79.9 million, respectively, were customer deposits and prepayments of inventory and $28.7 million and $38.2 million, respectively, were related to the contractual timing of payments. The advance payments are not considered a significant financing component because they are used to meet working capital demands of a contract, offset inventory risks and protect the Company from the failure of other parties to fulfill obligations under a contract.