Quarterly report pursuant to Section 13 or 15(d)

Revenue from Contracts with Customers

Revenue from Contracts with Customers
6 Months Ended
Jun. 30, 2018
Revenue from Contracts with Customers

2. Revenue from Contracts with Customers

We recognize revenue from our product sales upon shipment or delivery to customers in accordance with the respective contractual arrangements, provided no significant obligations remain and collection is probable. For sales that include customer acceptance terms, revenue is recorded after customer acceptance, which generally requires shipment to the customer’s designated applicable location. It is our policy that all sales are final. Requests for returns are reviewed on a case by case basis. As revenue is recorded, we accrue an estimated amount for product returns as a reduction of revenue.

We recognize revenue from fixed-price and modified fixed-price contracts for turnkey energy conservation projects using cost-based input methods, in which significant judgement is required to evaluate assumptions including the amount of net contract revenue and the total estimated cost to determine our progress towards contract completion and to calculate the corresponding amount of revenue recognized. Cost-based input methods are used to reflect contract progress as costs are incurred. The transaction price is determined based on the contract price, which has a fixed or determinable fee. If estimated total costs on any contract are greater than the net contract revenues, we recognize the entire estimated loss in the period the loss becomes known. The cumulative effect of revisions to estimates related to net contract revenues or costs to complete contracts are recorded in the period in which the revisions to estimates are identified and the amounts can be reasonably estimated.

Unbilled contracts receivable represents a contract asset for revenue that has been recognized in advance of billing the customer, which is common for construction-type contracts. Billing requirements vary by contract and are generally structured as milestone-based or in accordance with prescribed billing dates (i.e. first and middle of the month) to coincide with the completion of the project. From time to time, certain of our turnkey energy conservation projects may also contain retainage provisions. Retainage represents a contract asset for the portion of the contract price earned by us for work performed but held for payment by the customer as a form of security, until a specific period of time has elapsed.

Revenue, disaggregated by revenue stream, consisted of the following:


     Three Months Ended
June 30,
     Six Months Ended
June 30,
     2018      2017      2018      2017  

Revenue from the sale of LED products

   $ 26.3      $ 30.2      $ 49.8      $ 50.0  

Revenue from fixed-price and modified fixed-price contracts for turnkey energy conservation projects (predominately related to LED products)

     10.2        13.1        20.4        23.9  














   $ 36.5      $ 43.3      $ 70.2      $ 73.9  













For the three and six months ended June 30, 2018 and 2017, revenue earned outside of the United States was less than 1% for each period.

Practical Expedients and Exemptions

We have excluded disclosure related to the aggregate amount of the transaction price allocated to the performance obligations that are unsatisfied at June 30, 2018 as the contract periods are of one year or less. Additionally, we do not disclose the value of unsatisfied performance obligations for contracts with an original expected length of one year or less. At June 30, 2018, we had no contracts with an original expected length of greater than one year.

We generally expense sales commissions in “Selling, general and administrative expenses” in the unaudited Condensed Consolidated Statements of Operations at the time the applicable revenue is recorded. Shipping and handling costs are treated as fulfillment activities and not as promised services, and are expensed as incurred.