VSE Corporation Quarterly report pursuant to Section 13 or 15(d)

Quarterly report pursuant to Section 13 or 15(d)

Revenue

Revenue

9 Months Ended

Sep. 30, 2019

Revenue from Contract with Customer [Abstract]

Disaggregated Revenue

Our revenues are derived from contract services performed for the United States Postal Service ("USPS"), United States Department of Defense ("DoD") agencies or federal civilian agencies and from the delivery of products to commercial customers.

A summary of revenues for our operating groups by customer for the three and nine months ended September 30, 2019 are as follows (in thousands):



	Three months ended September 30, 2019
Customer	Supply Chain Management		Aviation		Federal Services		Total
USPS	$	42,282	$	—	$	—	$	42,282
DoD	6,935		1,613		76,505		85,053
Commercial	6,015		56,839		—		62,854
Other government	137		734		7,266		8,137
	$	55,369	$	59,186	$	83,771	$	198,326



	Nine months ended September 30, 2019
Customer	Supply Chain Management		Aviation		Federal Services		Total
USPS	$	127,077	$	—	$	—	$	127,077
DoD	18,238		2,768		201,828		222,834
Commercial	15,085		159,400		1,104		175,589
Other government	478		1,385		29,993		31,856
	$	160,878	$	163,553	$	232,925	$	557,356

A summary of revenues for our operating groups by customer for the three and nine months ended September 30, 2018 are as follows (in thousands):



	Three months ended September 30, 2018
Customer	Supply Chain Management		Aviation		Federal Services		Total
USPS	$	43,031	$	—	$	—	$	43,031
DoD	5,479		913		73,610		80,002
Commercial	3,324		32,641		62		36,027
Other government	—		446		9,425		9,871
	$	51,834	$	34,000	$	83,097	$	168,931



	Nine months ended September 30, 2018
Customer	Supply Chain Management		Aviation		Federal Services		Total
USPS	$	130,151	$	—	$	—	$	130,151
DoD	21,180		3,153		225,509		249,842
Commercial	10,123		98,213		295		108,631
Other government	507		1,188		25,903		27,598
	$	161,961	$	102,554	$	251,707	$	516,222

A summary of revenues for our operating groups by contract type for the three and nine months ended September 30, 2019 are as follows (in thousands):



	Three months ended September 30, 2019
Contract Type	Supply Chain Management		Aviation		Federal Services		Total
Cost-type	$	—	$	315	$	41,691	$	42,006
Fixed-price	55,369		26,268		19,078		100,715
Time and materials	—		32,603		23,002		55,605
Total revenues	$	55,369	$	59,186	$	83,771	$	198,326



	Nine months ended September 30, 2019
Contract Type	Supply Chain Management		Aviation		Federal Services		Total
Cost-type	$	—	$	696	$	103,027	$	103,723
Fixed-price	160,878		75,260		58,098		294,236
Time and materials	—		87,597		71,800		159,397
Total revenues	$	160,878	$	163,553	$	232,925	$	557,356

A summary of revenues for our operating groups by contract type for the three and nine months ended September 30, 2018 are as follows (in thousands):



	Three months ended September 30, 2018
Contract Type	Supply Chain Management		Aviation		Federal Services		Total
Cost-type	$	—	$	—	$	44,638	$	44,638
Fixed-price	51,834		20,152		19,234		91,220
Time and materials	—		13,848		19,225		33,073
Total revenues	$	51,834	$	34,000	$	83,097	$	168,931



	Nine months ended September 30, 2018
Contract Type	Supply Chain Management		Aviation		Federal Services		Total
Cost-type	$	—	$	1,098	$	137,560	$	138,658
Fixed-price	161,961		59,525		51,577		273,063
Time and materials	—		41,931		62,570		104,501
Total revenues	$	161,961	$	102,554	$	251,707	$	516,222

Contract Balances

Billed receivables, unbilled receivables (contract assets), and contract liabilities are the results of revenue recognition, customer billing, and timing of payment receipts. Billed receivables, net, represent unconditional rights to consideration under the terms of the contract and include amounts billed and currently due from our customers. Unbilled receivables represent our right to consideration in exchange for goods or services that we have transferred to the customer prior to us having the right to payment for such goods or services. Contract liabilities are recorded when customers remit contractual cash payments in advance of us satisfying related performance obligations under contractual arrangements, including those with performance obligations to be satisfied over a period of time.

We present our unbilled receivables and contract liabilities on a contract-by-contract basis. If a contract liability exists, it is netted against the unbilled receivables balance for that contract. Unbilled receivables increased from $41.3 million at December 31, 2018 to $54.2 million at September 30, 2019, primarily due to the revenue recognized as performance obligations were satisfied prior to the billing of our customers. Contract liabilities, which are included in accrued expenses and other current liabilities in our consolidated balance sheet, decreased from $5.0 million at December 31, 2018 to $4.9 million at September 30, 2019, primarily due to revenue recognized in excess of advance payments received. For the nine months ended September 30, 2019 and September 30, 2018, we recognized revenue that was previously included in the beginning balance of contract liabilities of $2.1 million and $8.1 million, respectively.

Performance Obligations

Our performance obligations are satisfied over time as work progresses or at a point in time. Revenues from products and services transferred to customers over time accounted for approximately 57% of our revenues for the three and nine months ended September 30, 2019 and September 30, 2018, primarily related to revenues in our Federal Services Group and for MRO services in our Aviation Group. Revenues from products and services transferred to customers at a point in time accounted for approximately 43% of our revenues for the three and nine months ended September 30, 2019 and September 30, 2018. The majority of our revenue recognized at a point in time is for the sale of vehicle and aircraft parts in our Supply Chain Management and Aviation groups.

As of September 30, 2019, the aggregate amount of transaction prices allocated to unsatisfied or partially unsatisfied performance obligations was $252 million. Performance obligations expected to be satisfied within one year and greater than one year are 97% and 3%, respectively. We have applied the practical expedient for certain parts sales and MRO services to exclude the amount of remaining performance obligations for (i) contracts with an original expected term of one year or less or (ii) contracts for which we recognize revenue in proportion to the amount we have the right to invoice for services performed.

During the nine months ended September 30, 2019 and September 30, 2018, revenue recognized from performance obligations satisfied in prior periods was not material.