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

Quarterly report pursuant to Section 13 or 15(d)

Revenue

Revenue

3 Months Ended

Mar. 31, 2019

Revenue from Contract with Customer [Abstract]

Disaggregated Revenue

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

A summary of revenues for our operating groups by customer for the three months ended March 31, 2019 and 2018 are as follows (in thousands):



	Three months ended March 31, 2019
Customer	Supply Chain Management		Aviation		Federal Services		Total
USPS	$	42,683	$	—	$	—	$	42,683
DoD	4,842		895		56,964		62,701
Commercial	3,980		48,475		1,104		53,559
Other government	199		—		10,777		10,976
	$	51,704	$	49,370	$	68,845	$	169,919



	Three months ended March 31, 2018
Customer	Supply Chain Management		Aviation		Federal Services		Total
USPS	$	44,031	$	—	$	—	$	44,031
DoD	8,176		1,215		78,262		87,653
Commercial	3,386		31,535		202		35,123
Other government	271		—		9,819		10,090
	$	55,864	$	32,750	$	88,283	$	176,897

A summary of revenues for our operating groups by contract type for the three months ended March 31, 2019 and 2018 are as follows (in thousands):



	Three months ended March 31, 2019
Contract Type	Supply Chain Management		Aviation		Federal Services		Total
Cost-type	$	—	$	212	$	27,840	$	28,052
Fixed-price	51,704		23,936		19,867		95,507
Time and materials	—		25,222		21,138		46,360
Total revenues	$	51,704	$	49,370	$	68,845	$	169,919



	Three months ended March 31, 2018
Contract Type	Supply Chain Management		Aviation		Federal Services		Total
Cost-type	$	—	$	397	$	51,121	$	51,518
Fixed-price	55,864		19,504		15,139		90,507
Time and materials	—		12,849		22,023		34,872
Total revenues	$	55,864	$	32,750	$	88,283	$	176,897

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 $44.5 million at March 31, 2019, primarily due to revenue recognized in excess of billings. 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 $4.5 million at March 31, 2019, primarily due to revenue recognized in excess of advance payments received. For the three months ended March 31, 2019 and March 31, 2018, we recognized revenue that was previously included in the beginning balance of contract liabilities of $1.5 million and $6.5 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 months ended March 31, 2019 and March 31, 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 months ended March 31, 2019 and March 31, 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 March 31, 2019, the aggregate amount of transaction prices allocated to unsatisfied or partially unsatisfied performance obligations was $278 million. Performance obligations expected to be satisfied within one year and greater than one year are 96% and 4%, 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 three months ended March 31, 2019 and March 31, 2018, revenue recognized from performance obligations satisfied in prior periods was not material.