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REVENUE
6 Months Ended
Jun. 30, 2018
REVENUE [Abstract]  
REVENUE
NOTE 12 – REVENUE

Adoption of ASC Topic 606, "Revenue from Contracts with Customers"

On January 1, 2018, we adopted Topic 606 using the modified retrospective method applied to those contracts that were in progress as of January 1, 2018. Results for reporting periods beginning after January 1, 2018 are presented under Topic 606, while prior period amounts are not adjusted and continue to be reported in accordance with our historical accounting under Topic 605. The impact to revenues as a result of applying Topic 606 was a decrease of $108 and an increase of $351 for the three and six months ended June 30, 2018, respectively.

Revenue Recognition

Revenues are recognized when control of the promised goods is transferred to our customers, in an amount that reflects the consideration we expect to realize in exchange for those goods.

The following table presents our revenues disaggregated by revenue source (in thousands, unaudited). Sales and usage-based taxes are excluded from revenues.

  
Three Months Ended
  
Six Months Ended
 
  
June 30,
  
June 30,
 
  
2018
  
2017
  
2018
  
2017
 
Product Sales
 
$
149,052
  
$
133,149
  
$
297,834
  
$
257,772
 
Co-manufacturing
  
11,830
   
11,210
   
20,669
   
21,309
 
Bill and Hold
  
1,555
   
1,401
   
2,844
   
2,384
 
Consignment
  
333
   
594
   
1,378
   
1,237
 
Product Sales Revenue
  
162,770
   
146,354
   
322,725
   
282,702
 
Royalty Revenue
  
917
   
728
   
2,372
   
2,108
 
Total Revenue
 
$
163,687
  
$
147,082
  
$
325,097
  
$
284,810
 
 
The following table presents our revenues disaggregated by geography, based on the billing addresses of our customers (in thousands, unaudited):

  
Three Months Ended
  
Six Months Ended
 
  
June 30,
  
June 30,
 
  
2018
  
2017
  
2018
  
2017
 
Domestic Revenue
 
$
125,019
  
$
113,227
  
$
245,687
  
$
219,527
 
Foreign Revenue
  
38,668
   
33,855
   
79,410
   
65,283
 
Total Revenue
 
$
163,687
  
$
147,082
  
$
325,097
  
$
284,810
 

Product Sales Revenues

Balchem’s primary operation is the manufacturing and sale of health and wellness ingredient products, in which Balchem receives an order from a customer and fulfills that order. Balchem’s product sales have four sub-streams of revenue: product sales, co-manufacturing, bill and hold, and consignment.

Royalty Revenues

Royalty revenue consists of agreements with customers to use Balchem’s intellectual property in exchange for a sales based royalty. Royalty revenue is recorded as part of the Human Nutrition & Health segment.
 
Contract Liabilities

We record contract liabilities when cash payments are received or due in advance of our performance, including amounts which are refundable.

Our payment terms vary by the type and location of our customer and the products offered. The term between invoicing and when payment is due is not significant. For certain products or services and customer types, we require payment before the products are delivered to the customer.

Practical Expedients and Exemptions

We generally expense sales commissions when incurred because the amortization period would have been one year or less. These costs are recorded within selling and marketing expenses.

We do not disclose the value of unsatisfied performance obligations for (i) contracts with an original expected length of one year or less and (ii) contracts for which we recognize revenue at the amount to which we have the right to invoice for products shipped.