Quarterly report pursuant to Section 13 or 15(d)

Revenue

v3.22.2
Revenue
 6 Months Ended
Jun. 30, 2022
Revenue from Contract with Customer [Abstract]  
Revenue

Note 13. Revenue

We evaluate financial performance and make resource allocation decisions based upon the results of our single operating and reportable segment; however, we believe presenting revenue split between our primary revenue streams of products and services best depicts how the nature, amount, timing and certainty of our net sales and cash flows are affected by economic factors.

We generally produce and sell finished products, for which we recognize revenue upon shipment. Due to the highly specialized nature of our products, returns are infrequent, and therefore we do not estimate amounts for sales returns and allowances. There are no forms of variable consideration such as discounts, rebates, or volume discounts that we estimate to reduce our transaction price.

We defer certain contract fulfillment costs. These costs are amortized to cost of revenue on a per-pound basis as we sell the related product. During the three months ended June 30, 2022 and 2021, we charged $0.1 million of fulfillment costs to cost of revenue. During the six months ended June 30, 2022 and 2021, we charged $0.3 million of fulfillment costs to cost of revenue. At June 30, 2022 and December 31, 2021 we had recorded gross contract assets of $2.9 million and $2.5 million, respectively, related to these fulfillment costs.

Our R&D services contract customers generally pay us at the commencement of the agreement and then at additional intervals as outlined in each contract. We recognize contract liabilities for such payments and then recognize revenue as we satisfy the related performance obligations. To the extent collectible revenue recognized under this method exceeds the consideration received, we recognize contract assets for such unbilled consideration.

The following table shows the significant changes in the R&D contract asset and contract liability balances.

 

 

June 30,
2022

 

 

December 31,
2021

 

(in thousands)

 

Contract Assets

 

 

Contract Liabilities

 

 

Contract Assets

 

 

Contract Liabilities

 

Beginning balance

 

$

2,128

 

 

$

(214

)

 

$

-

 

 

$

(2,115

)

Revenue recognized in the quarter ended:

 

 

 

 

 

 

 

 

 

 

 

 

March 31

 

 

(582

)

 

 

582

 

 

 

-

 

 

 

1,397

 

June 30

 

 

2,038

 

 

 

210

 

 

 

1,530

 

 

 

1,513

 

September 30

 

 

-

 

 

 

-

 

 

 

6

 

 

 

572

 

December 31

 

 

-

 

 

 

-

 

 

 

592

 

 

 

675

 

Total revenue recognized

 

 

1,456

 

 

 

792

 

 

 

2,128

 

 

 

4,157

 

Unearned consideration received in the quarter ended:

 

 

 

 

 

 

 

 

 

 

 

 

March 31

 

 

-

 

 

 

(368

)

 

 

-

 

 

 

(1,600

)

June 30

 

 

(50

)

 

 

(2,500

)

 

 

-

 

 

 

-

 

September 30

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

December 31

 

 

-

 

 

 

-

 

 

 

-

 

 

 

(656

)

Total unearned consideration received

 

 

(50

)

 

 

(2,868

)

 

 

-

 

 

 

(2,256

)

Reserves recorded in the quarter ended:

 

 

 

 

 

 

 

 

 

 

 

 

June 30

 

 

(1,215

)

 

 

-

 

 

 

-

 

 

 

-

 

Ending balance

 

$

2,319

 

 

$

(2,290

)

 

$

2,128

 

 

$

(214

)

COVID-related shutdowns have caused significant delays in production trials and material testing at outside laboratories, which resulted in missing the deadlines specified in one of our contract R&D arrangements. During the three months ended June 30, 2022, our partner in this project elected to cancel it, according to the terms of the contract, due to these delays. As a result, we recorded a reserve of $1.2 million against the outstanding contract asset.

Disaggregated Revenues

Revenue by geographic areas is based on the location of the customer. The following is a summary of revenue information by major geographic area:

 

 

Three Months Ended June 30,

 

 

Six Months Ended June 30,

 

(in thousands)

 

2022

 

 

2021

 

 

2022

 

 

2021

 

Domestic

 

$

11,540

 

 

$

10,457

 

 

$

22,221

 

 

$

19,419

 

Germany

 

 

-

 

 

 

921

 

 

 

2,689

 

 

 

2,176

 

Belgium

 

 

556

 

 

 

1,328

 

 

 

1,084

 

 

 

2,505

 

Switzerland

 

 

(223

)

 

 

1,535

 

 

 

80

 

 

 

2,761

 

All other countries

 

 

830

 

 

 

230

 

 

 

1,372

 

 

 

791

 

Total revenues

 

$

12,703

 

 

$

14,471

 

 

$

27,446

 

 

$

27,652