Revenue

9 Months Ended

Sep. 30, 2024

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. 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. 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 trade accounts receivable when the entitlement to payment becomes unconditional.

Taxes assessed by governmental authorities that are imposed on and concurrent with a specific revenue-producing transaction and 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

The following tables provide a summary of the Company’s revenue disaggregated by market sector and a reconciliation of the disaggregated revenue to the Company’s revenue by reportable operating segment:

	Three Months Ended September 30, 2024
(in thousands)	Americas		Asia		Europe		Total
Market sector:
Semi-Cap	$	50,073	$	106,231	$	31,088	$	187,392
Complex Industrials		35,779		87,722		27,413		150,914
Medical		54,679		40,644		11,811		107,134
A&D		89,589		1,596		10,844		102,029
AC&C		68,609		41,663		6		110,278
External revenue		298,729		277,856		81,162		657,747
Elimination of intersegment sales		7,804		12,065		2,355		22,224
Segment revenue	$	306,533	$	289,921	$	83,517	$	679,971

	Nine Months Ended September 30, 2024
(in thousands)	Americas		Asia		Europe		Total
Market sector:
Semi-Cap	$	158,202	$	273,388	$	93,605	$	525,195
Complex Industrials		101,100		251,209		81,340		433,649
Medical		172,556		125,822		35,034		333,412
A&D		270,714		13,398		32,591		316,703
AC&C		277,889		112,345		25		390,259
External revenue		980,461		776,162		242,595		1,999,218
Elimination of intersegment sales		41,542		29,245		7,274		78,061
Segment revenue	$	1,022,003	$	805,407	$	249,869	$	2,077,279

	Three Months Ended September 30, 2023
(in thousands)	Americas		Asia		Europe		Total
Market sector:
Semi-Cap	$	65,920	$	75,103	$	24,231	$	165,254
Complex Industrials		28,504		94,939		30,198		153,641
Medical		92,509		46,968		9,653		149,130
A&D		84,821		8,833		6,033		99,687
AC&C		113,425		38,558		—		151,983
External revenue		385,179		264,401		70,115		719,695
Elimination of intersegment sales		14,177		10,762		1,297		26,236
Segment revenue	$	399,356	$	275,163	$	71,412	$	745,931

	Nine Months Ended September 30, 2023
(in thousands)	Americas		Asia		Europe		Total
Market sector:
Semi-Cap	$	189,939	$	216,522	$	71,369	$	477,830
Complex Industrials		96,390		270,369		97,245		464,004
Medical		251,001		146,136		33,978		431,115
A&D		215,185		25,655		18,426		259,266
AC&C		381,016		134,335		56		515,407
External revenue		1,133,531		793,017		221,074		2,147,622
Elimination of intersegment sales		67,252		37,039		2,783		107,074
Segment revenue	$	1,200,783	$	830,056	$	223,857	$	2,254,696

The timing of revenue recognition, billings and cash collections results in billed accounts receivable, contract assets and advance payments from customers. During the nine months ended September 30, 2024 and 2023, 86.7% and 89.0%, respectively, of the Company’s revenue was recognized as products and services that were transferred over time.

Contract assets primarily relate to the Company’s right to consideration for work completed but not billed to the customer as of period end. Contract asset balances are transferred to trade accounts receivable when the rights become unconditional.

A summary of activity related to the Company’s contract assets follows:

	Nine Months Ended September 30,
(in thousands)	2024			2023
Balance as of the beginning of the year	$	174,979		$	183,613
Revenue recognized		1,734,408			1,911,958
Amounts collected or invoiced		(1,722,849	)		(1,905,486	)
Balance as of the end of the period	$	186,538		$	190,085

As of September 30, 2024 and December 31, 2023, the Company had $145.4 million and $204.9 million, respectively, in advance payments from customers. Of those amounts, $134.7 million and $191.6 million, respectively, were customer deposits and prepayments of inventory and $10.7 million and $13.3 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.