Revenue

3 Months Ended

Jun. 30, 2023

Revenue from Contract with Customer [Abstract]

Revenue

Revenue

The Company is a global provider of highly engineered products, differentiated industrial technologies, and innovative solutions, serving a wide range of end markets and customers. Its specialized products and services are used in far-reaching applications in aerospace, healthcare, automation, packaging, mobility and manufacturing.

Revenue is recognized by the Company when control of the product or solution is transferred to the customer. Control is generally transferred when products are shipped or delivered to customers, title is transferred, the significant risks and rewards of ownership have transferred, and the Company has rights to payment and the rewards of ownership pass to the customer. Customer acceptance may also be a factor in determining whether control of the product has transferred. Although revenue is generally recognized at a point in time, a certain portion of the Company's businesses with customized products or contracts in which the Company performs work on customer-owned assets requires the use of an over-time recognition model as certain contracts meet one or more of the established criteria pursuant to the accounting guidance. Also, service revenue is recognized as control transfers, which is concurrent with the services being performed.

The following table presents the Company's revenue disaggregated by products and services, and geographic regions, by segment:

	Three Months Ended June 30, 2024						Three Months Ended June 30, 2023
	Aerospace		Industrial		Total Company		Aerospace		Industrial		Total Company
Products and Services(A)
Aerospace Original Equipment Manufacturing Products	$	132,185	$	—	$	132,185	$	75,362	$	—	75,362
Aerospace Aftermarket Products and Services	85,773		—		85,773		46,653		—		46,653
Force & Motion Control Products	—		42,452		42,452		—		100,440		100,440
Molding Solutions Products	—		106,894		106,894		—		100,127		100,127
Automation Products	—		14,928		14,928		—		16,402		16,402
	$	217,958	$	164,274	$	382,232	$	122,015	$	216,969	$	338,984
Geographic Regions (B)
Americas	$	147,877	$	53,551	$	201,428	$	87,849	$	93,254	$	181,103
Europe	43,769		76,679		120,448		20,401		81,021		101,422
Asia	23,614		33,326		56,940		11,641		40,821		52,462
Rest of World	2,698		718		3,416		2,124		1,873		3,997
	$	217,958	$	164,274	$	382,232	$	122,015	$	216,969	$	338,984

	Six Months Ended June 30, 2024						Six Months Ended June 30, 2023
	Aerospace		Industrial		Total Company		Aerospace		Industrial		Total Company
Products and Services(A)
Aerospace Original Equipment Manufacturing Products	$	267,012	$	—	$	267,012	$	148,100	$	—	148,100
Aerospace Aftermarket Products and Services	172,316		—		172,316		91,171		—		91,171
Force & Motion Control Products (B)	—		135,574		135,574		—		198,914		198,914
Molding Solutions Products	—		208,288		208,288		—		203,654		203,654
Automation Products	—		29,680		29,680		—		32,502		32,502
	$	439,328	$	373,542	$	812,870	$	239,271	$	435,070	$	674,341
Geographic Regions (C)
Americas	$	302,908	$	143,568	$	446,476	$	172,421	$	189,194	$	361,615
Europe	85,725		156,253		241,978		41,068		160,629		201,697
Asia	45,757		70,882		116,639		21,663		80,932		102,595
Rest of World	4,938		2,839		7,777		4,119		4,315		8,434
	$	439,328	$	373,542	$	812,870	$	239,271	$	435,070	$	674,341

(A) The results of MB Aerospace, from the acquisition on August 31, 2023, have been included within the Company's revenue disaggregated by products and services, and geographic regions within the Aerospace Segment for the three and six month periods ended June 30, 2024.

(B) Effective April 23, 2024, following the divestiture of the Businesses, the Company renamed the Motion Control Solutions business to Force & Motion Control. Revenue related to the divested businesses contributed $0 and $53,040 during the three and six month periods ended June 30, 2024, respectively, and $57,616 and $110,862 during the three and six month periods ended June 2023, respectively.

(C) Sales by geographic region are based on the location to which the product is shipped and services are delivered.

Revenue from products and services transferred to customers at a point in time accounted for approximately 70 percent and 75 percent of total revenue for the three month periods ended June 30, 2024 and June 30, 2023, respectively. Revenue from products and services transferred to customers at a point in time accounted for approximately 70 percent and 80 percent of total revenue for the six month periods ended June 30, 2024 and June 30, 2023, respectively. A majority of revenue within the Industrial segment and Aerospace Original Equipment Manufacturing Products business ("OEM"), along with a portion of revenue within the Aerospace Aftermarket Products and Services business ("Aftermarket"), is recognized at a point in time, primarily when the product or solution is shipped to the customer.

Revenue from products and services transferred to customers over-time accounted for approximately 30 percent of total revenue and 25 percent of total revenue for the three month periods ended June 30, 2024 and June 30, 2023, respectively. Revenue from products and services transferred to customers over-time accounted for approximately 30 percent and 20 percent of total revenue for the six month periods ended June 30, 2024 and June 30, 2023, respectively. The Company recognizes revenue over-time in instances where a contract supports a continual transfer of control to the customer. Substantially all of our revenue in the Aerospace Aftermarket maintenance repair and overhaul business (within Aftermarket Products and Services) and a portion of the revenue within Force & Motion Control productions (formerly Motion Control Solutions), Molding Solutions products and Aerospace OEM products is recognized over-time. Within the Molding Solutions and Aerospace Aftermarket businesses, this continual transfer of control to the customer partially results from repair and refurbishment work performed on customer-controlled assets. With other contracts, this continual transfer of control to the customer is supported by clauses in the contract, or governing commercial law of the relevant jurisdiction, where we deliver products that do not have an alternative use and require an enforceable right to payment of costs incurred (plus a reasonable profit) or the Company has a contractual right to complete any work in process and receive full contract price.

The majority of our revenue is from contracts that are for less than one year, however certain Aerospace OEM and Molding Solutions business contracts extend beyond one year. In the Industrial segment, customers are typically OEMs or suppliers to OEMs and, in some businesses, distributors. In the Aerospace segment, customers include commercial airlines, OEMs, defense-related manufacturers, and industry parts and service providers.

A performance obligation represents a promise within a contract to provide a distinct good or service to the customer. Revenue is recognized in an over-time model based on the extent of progress towards completion of the performance obligation. The selection of the method to measure progress towards completion requires judgment and is based on the nature of the products or services to be provided. The Company utilizes the cost-to-cost measure of progress for over-time contracts as we believe this measure best depicts the transfer of control to the customer, which occurs as we incur costs on contracts.

Adjustments to net sales, cost of sales and the related impact to operating income are recognized as necessary in the period they become known. Revenue recognized from performance obligations satisfied in previous periods was not material in both the three month period ended June 30, 2024 and 2023.

Contract Balances. The timing of revenue recognition, invoicing and cash collections affects accounts receivable, unbilled receivables (contract assets) and customer advances and deposits (contract liabilities) on the Condensed Consolidated Balance Sheets.

Unbilled Receivables (Contract Assets) - Pursuant to the over-time revenue recognition model, revenue may be recognized prior to the customer being invoiced. An unbilled receivable is recorded to reflect revenue that is recognized when 1) the cost-to-cost method is applied and 2) such revenue exceeds the amount invoiced to the customer. Unbilled receivables are included within Prepaid Expenses and Other Current Assets on the Condensed Consolidated Balance Sheets as of June 30, 2024 and December 31, 2023.

Customer Advances and Deposits (Contract Liabilities) - The Company may receive a customer advance or deposit, or have an unconditional right to receive a customer advance, prior to revenue being recognized. Certain contracts within the Molding Solutions business, for example, may require such advances. Since the performance obligations related to such advances have not been satisfied, a contract liability is established. An offsetting asset of equal amount is recorded as an account receivable until the advance is collected. Advances and deposits are included within Accrued Liabilities on the Condensed Consolidated Balance Sheets until the respective revenue is recognized. Advance payments are not considered a significant financing component as they are generally received less than one year before the customer solution is completed. These assets and liabilities are reported on the Condensed Consolidated Balance Sheets on an individual contract basis at the end of each reporting period.

Net contract assets (liabilities) consisted of the following:

	June 30, 2024		December 31, 2023		$ Change		% Change
Unbilled receivables (contract assets)	$	69,246	$	59,652	$	9,594	16	%
Contract liabilities	(50,924)		(42,428)		(8,496)		20	%
Net contract assets	$	18,322	$	17,224	$	1,098	6	%

Contract liabilities balances at June 30, 2024 and December 31, 2023 include $19,416 and $10,032, respectively, of customer advances for which the Company has not yet collected payment, but has an unconditional right to collect payment. Accounts receivable, as presented on the Condensed Consolidated Balance Sheet, includes corresponding balances at June 30, 2024 and December 31, 2023, respectively.

Changes in the net contract assets during the six month period ended June 30, 2024 included a $9,594 increase in contract assets, driven primarily by contract progress (i.e., unbilled receivable), partially offset by earlier contract progress being invoiced to the customer. Offsetting this net contract increase was a $8,496 increase in contract liabilities, driven primarily by new customer advances, partially offset by revenue recognized in the current six-month period.

The Company recognized approximately 20% and 75% of the revenue related to the contract liabilities balance as of December 31, 2023 during the three and six month period ended June 30, 2024, and approximately 30% and 70% of the revenue related to the contract liabilities balance as of December 31, 2022 during the three and six month period ended June 30, 2023, respectively, primarily representing revenue from the sale of molds and hot runners within the Molding Solutions business.

Remaining Performance Obligations. The Company has elected to disclose remaining performance obligations only for contracts with an original duration of greater than one year. Such remaining performance obligations represent the transaction price of firm orders for which work has not yet been performed and, for Aerospace, excludes projections of components and assemblies that Aerospace OEM customers anticipate purchasing in the future under existing programs, which represent orders

that are beyond lead time and do not represent performance obligations pursuant to accounting guidance. As of June 30, 2024, the aggregate amount of the transaction price allocated to remaining performance obligations was $573,021. The Company expects to recognize revenue on approximately 70% of the remaining performance obligations over the next 12 months, with the remainder to be recognized within 24 months.