Annual report pursuant to Section 13 and 15(d)

Revenue Recognition

v3.19.3.a.u2
Revenue Recognition
12 Months Ended
Dec. 31, 2019
Revenue Recognition  
Revenue Recognition

3. REVENUE RECOGNTION

Revenue is disaggregated between our Installation and Distribution segments and further based on market and product, as we believe this best depicts how the nature, amount, timing, and uncertainty of revenue and cash flows are affected by economic factors.  The following tables present our revenues disaggregated by market (in thousands):

Year Ended December 31, 2019

Installation

Distribution

Eliminations

Total

Residential

$

$1,483,218

$

$655,208

$

($114,540)

$

2,023,886

Commercial

$423,512

$206,935

($30,212)

600,235

  Net sales

$

1,906,730

$

862,143

$

(144,752)

$

2,624,121

Year Ended December 31, 2018

Installation

Distribution

Eliminations

Total

Residential

$

$1,352,022

$

$637,399

$

($89,056)

$

1,900,365

Commercial

$328,945

$182,910

($27,971)

483,884

  Net sales

$

1,680,967

$

820,309

$

(117,027)

$

2,384,249

Year Ended December 31, 2017

Installation

Distribution

Eliminations

Total

Residential

$

$1,032,669

$

$569,241

$

($73,403)

$

1,528,507

Commercial

$248,627

$150,518

($21,386)

377,759

  Net sales

$

1,281,296

$

719,759

$

(94,789)

$

1,906,266

The following tables present our revenues disaggregated by product (in thousands):

Year Ended December 31, 2019

Installation

Distribution

Eliminations

Total

Insulation and accessories

$

1,485,356

$

712,959

$

(114,679)

$

2,083,636

Glass and windows

152,071

-

-

152,071

Rain gutters

85,056

88,003

(24,261)

148,798

All other

184,247

61,181

(5,812)

239,616

       Net sales

$

1,906,730

$

862,143

$

(144,752)

$

2,624,121

Year Ended December 31, 2018

Installation

Distribution

Eliminations

Total

Insulation and accessories

$

1,297,931

$

665,387

$

(90,323)

$

1,872,995

Glass and windows

124,115

-

-

124,115

Rain gutters

85,950

82,080

(25,062)

142,968

All other

172,971

72,842

(1,642)

244,171

       Net sales

$

1,680,967

$

820,309

$

(117,027)

$

2,384,249

Year Ended December 31, 2017

Installation

Distribution

Eliminations

Total

Insulation and accessories

$

1,005,632

$

591,721

$

(72,763)

$

1,524,590

Glass and windows

45,450

-

-

45,450

Rain gutters

79,868

64,966

(20,090)

124,744

All other

150,346

63,072

(1,936)

211,482

       Net sales

$

1,281,296

$

719,759

$

(94,789)

$

1,906,266

We recognize revenue for our Installation segment over time as the related performance obligation is satisfied with respect to each particular order within a given customer’s contract. Progress toward complete satisfaction of the performance obligation is measured using a cost-to-cost measure of progress method. The cost input is based on the amount of material installed at that customer’s location and the associated labor costs, as compared to the total expected cost for the particular order.  Revenue is recognized as the customer is able to receive and utilize the benefits provided by our services. Each contract contains one or more individual orders, which are based on services delivered. When a contract modification is made, typically the remaining goods or services are considered distinct and we recognize revenue for the modification as a separate performance obligation. When material and installation services are bundled in a contract, we combine these items into one performance obligation as the overall promise is to transfer the combined item.

Revenue from our Distribution segment is recognized when title to products and risk of loss transfers to our customers.  This represents the point in time when the customer is able to direct the use of and obtain substantially all the benefits from the product. The determination of when control is deemed transferred depends on the shipping terms that are agreed upon in the contract.

At time of sale, we record estimated reductions to revenue for customer programs and incentive offerings, including special pricing and other volume-based incentives based on historical experience, which is continuously adjusted. The duration of our contracts with customers is relatively short, generally less than a 90-day period, therefore there is not a significant financing component when considering the determination of the transaction price which gets allocated to the individual performance obligations, generally based on standalone selling prices. Additionally, we consider shipping costs charged to a customer as a fulfillment cost rather than a promised service and expense as incurred. Sales taxes, when incurred, are recorded as a liability and excluded from revenue on a net basis.

 

We record a contract asset when we have satisfied our performance obligation prior to billing and a contract liability when a customer payment is received prior to the satisfaction of our performance obligation. The difference between the beginning and ending balances of our contract assets and liabilities primarily results from the timing of our performance and the customer’s payment.  Our remaining performance obligations are expected to be recognized within the next twelve months.

  The following table represents our contract assets and contract liabilities with customers, in thousands:

Included in Line Item on

As of

Condensed Consolidated

December 31, 

December 31, 

Balance Sheets

2019

2018

Contract Assets:

Receivables, unbilled

Receivables, net

$

57,153

$

61,339

Contract Liabilities:

Deferred revenue

Accrued liabilities

$

16,139

$

19,963