Revenue

9 Months Ended

Sep. 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 September 30, 2022
(in thousands)	Americas		Asia		Europe		Total
Market Sector:
Industrials	$	29,504	$	90,469	$	35,305	$	155,278
A&D		69,700		13,514		3,024		86,238
Medical		85,609		67,956		11,981		165,546
Semi-Cap		77,123		91,907		17,295		186,325
Computing		78,438		16,124		—		94,562
Telecommunications		43,012		40,487		127		83,626
External revenue		383,386		320,457		67,732		771,575
Elimination of intersegment sales		17,519		17,269		668		35,456
Segment revenue	$	400,905	$	337,726	$	68,400	$	807,031

	Nine Months Ended September 30, 2022
(in thousands)	Americas		Asia		Europe		Total
Market Sector:
Industrials	$	71,171	$	275,422	$	104,667	$	451,260
A&D		216,204		29,196		11,922		257,322
Medical		240,467		176,408		31,778		448,653
Semi-Cap		212,152		274,703		57,806		544,661
Computing		180,109		38,145		—		218,254
Telecommunications		108,077		107,228		232		215,537
External revenue		1,028,180		901,102		206,405		2,135,687
Elimination of intersegment sales		38,580		44,332		2,186		85,098
Segment revenue	$	1,066,760	$	945,434	$	208,591	$	2,220,785

	Three Months Ended September 30, 2021
(in thousands)	Americas		Asia		Europe		Total
Market Sector:
Industrials	$	19,907	$	69,436	$	18,849	$	108,192
A&D		95,940		827		4,071		100,838
Medical		64,357		43,480		9,956		117,793
Semi-Cap		53,732		63,733		16,111		133,576
Computing		46,804		9,742		11		56,557
Telecommunications		28,456		26,019		451		54,926
External revenue		309,196		213,237		49,449		571,882
Elimination of intersegment sales		9,920		11,194		535		21,649
Segment revenue	$	319,116	$	224,431	$	49,984	$	593,531

	Nine Months Ended September 30, 2021
(in thousands)	Americas		Asia		Europe		Total
Market Sector:
Industrials	$	61,261	$	185,961	$	56,328	$	303,550
A&D		270,854		900		15,145		286,899
Medical		159,701		134,650		40,537		334,888
Semi-Cap		158,090		179,275		48,525		385,890
Computing		114,908		24,922		11		139,841
Telecommunications		90,421		79,960		816		171,197
External revenue		855,235		605,668		161,362		1,622,265
Elimination of intersegment sales		32,989		29,606		1,122		63,717
Segment revenue	$	888,224	$	635,274	$	162,484	$	1,685,982

During the nine months ended September 30, 2022 and 2021, 90.6% 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 September 30, 2022 and December 31, 2021, the Company had $187.7 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:

	Nine Months Ended September 30,
(in thousands)	2022			2021
Beginning balance as of December 31	$	155,243		$	142,779
Revenue recognized		1,937,398			1,463,872
Amounts collected or invoiced		(1,904,911	)		(1,446,457	)
Ending balance as of September 30	$	187,730		$	160,194

As of September 30, 2022 and December 31, 2021, the Company had $211.6 million and $118.1 million, respectively, in advance payments from customers. Of those amounts, $187.4 million and $79.9 million, respectively, were customer deposits and prepayments of inventory and $24.2 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.