Quarterly report pursuant to Section 13 or 15(d)

Revenue

v3.24.3
Revenue
 9 Months Ended
Sep. 28, 2024
Revenue from Contract with Customer [Abstract]  
Revenue Revenue
On September 28, 2024, we had $611.9 million of outstanding performance obligations, which we refer to as total backlog. In conjunction with the customer bankruptcy discussed in Note 1, we have removed all outstanding backlog in the third quarter of 2024, approximately $9.3 million, related to such customer. We expect to recognize approximately $519.8 million of our outstanding performance obligations as revenue over the next twelve months and the balance thereafter.
The Company's contract assets and contract liabilities consist primarily of costs and profits in excess of billings and billings in excess of cost and profits, respectively. The following table presents the beginning and ending balances of contract assets and contract liabilities during the nine months ended September 28, 2024:
(In thousands) Contract Assets Contract Liabilities
Beginning Balance, January 1, 2024
 $ 46,321  $ 22,888 
Ending Balance, September 28, 2024
 $ 57,489  $ 20,210 
The increase in contract assets reflects the net impact of new revenue recognized in excess of billings exceeding billing of previously unbilled revenue during the period, partially offset by a $3.5 million revision of estimated costs to complete certain long-term mass transit Test contracts which was recorded in the second quarter of 2024. The revision resulted in reduced revenue recognized during the nine months ended September 28, 2024 due to lower estimates of the percentage of work completed on the programs. The decrease in contract liabilities reflects the net impact of revenue recognized in excess of new customer advances or deferred revenues recorded.
We recognized $6.3 million and $9.3 million during the three months ended and $16.4 million and $22.1 million during the nine months ended September 28, 2024 and September 30, 2023, respectively, in revenues that were included in the contract liability balance at the beginning of the period.
The Company recognizes an asset for certain, material costs to fulfill a contract if it is determined that the costs relate directly to a contract or an anticipated contract that can be specifically identified, generate or enhance resources that will be used in satisfying performance obligations in the future, and are expected to be recovered. Such costs are amortized on a systematic basis that is consistent with the transfer to the customer of the goods to which the asset relates. Start-up costs are expensed as incurred. Capitalized fulfillment costs are included in Work in Progress within Inventories in the accompanying Consolidated Condensed Balance Sheets. Should future orders not materialize or it is determined the costs are no longer probable of
recovery, the capitalized costs are written off. Capitalized fulfillment costs were $4.2 million and $4.7 million on September 28, 2024 and December 31, 2023, respectively. Amortization of fulfillment costs recognized within Cost of Products Sold was approximately $0.1 million and $3.1 million for the three and nine months ended September 28, 2024. No amortization of fulfillment costs was recorded in 2023.
The following table presents our revenue disaggregated by Market Segments as follows:
Nine Months Ended Three Months Ended
(In thousands) September 28, 2024 September 30, 2023 September 28, 2024 September 30, 2023
Aerospace Segment
Commercial Transport
 $ 383,679  $ 308,016  $ 133,850  $ 101,724 
Military Aircraft
 63,545  44,335  21,685  16,687 
General Aviation
 56,643  60,656  18,077  16,193 
Other
 14,268  23,076  3,942  7,500 
Aerospace Total 518,135  436,083  177,554  142,104 
Test Systems Segment
Government & Defense
 68,751  57,831  26,144  20,818 
Test Systems Total 68,751  57,831  26,144  20,818 
Total $ 586,886  $ 493,914  $ 203,698  $ 162,922 
The following table presents our revenue disaggregated by Product Lines as follows:
Nine Months Ended Three Months Ended
(In thousands) September 28, 2024 September 30, 2023 September 28, 2024 September 30, 2023
Aerospace Segment
Electrical Power & Motion
 $ 263,919  $ 185,712  $ 90,467  $ 64,312 
Lighting & Safety
 135,162  116,967  46,921  38,496 
Avionics
 83,716  83,011  29,151  22,347 
Systems Certification
 12,272  19,832  4,460  6,535 
Structures
 8,798  7,485  2,613  2,914 
Other
 14,268  23,076  3,942  7,500 
Aerospace Total 518,135  436,083  177,554  142,104 
Test Systems 68,751  57,831  26,144  20,818 
Total $ 586,886  $ 493,914  $ 203,698  $ 162,922