Founded in 1993, Advant is headquartered in Galway, Ireland, with operations in Costa Rica and partner manufacturing in Mexico. Advant is a developer and manufacturer of Class I, II, and III medical devices and packaging, primarily for catheters and guide wires.

The following table summarizes the allocation of consideration paid to the acquisition date fair value of the assets acquired and liabilities assumed based on management’s estimates of fair value (in thousands):

Acquisition costs associated with the transaction through the second quarter of 2022 were approximately $779 thousand, of which requires an entity$749 thousand was charged to recognizeexpense in thesix-months ended June 30, 2022 and $30 thousand was charged to expense in the year ended December 31, 2021. These costs were primarily for legal, investment banking and valuation services, as well as stamp duty filings and are reflected on the face of the income statement.

The amount of revenue to which itand earnings of Advant recognized since the acquisition date through the second quarter of 2022 was approximately $6.8 million and $0.7 million, respectively, and is included in the condensed consolidated statement of comprehensive income for the period ended June 30, 2022.

Pro-forma statements

The following table contains an unaudited pro forma condensed consolidated statement of operations for the six-month period ended June 30, 2022, as if the Advant acquisition had occurred at the beginning of 2022 (in thousands):

The above unaudited pro forma information is presented for illustrative purposes only and may not be indicative of the results of operations that would have occurred had the acquisition occurred as presented. In addition, future results may vary significantly from the results reflected in such pro forma information.

The Company recognizes revenue when a customer obtains control of a promised good or service. The amount of revenue recognized reflects the consideration that the Company expects to be entitled to in exchange for the transfer of promised goods or services to customers. This standard will replace most existing revenue recognition guidance when it becomes effective. The standard permits the use of either the full retrospective or modified retrospective transition methods.services. The Company expectsrecognizes revenue in accordance with the core principles of ASC 606 which include (1) identifying the contract with a customer, (2) identifying separate performance obligations within the contract, (3) determining the transaction price, (4) allocating the transaction price to adopt the standard in the first quarter of 2018 using the modified retrospective transition method.performance obligations, and (5) recognizing revenue. The Company has identified its primary revenue streams, completed a preliminary review of a representative sample of contracts with its customers and is in the process of evaluating the impact of this ASU on its revenue streams and accounting policies. Based on the procedures completed to date, the Company expects that for a significantrecognizes all but an immaterial portion of its product sales upon shipment. The Company recognizes revenue from the sale of tooling and machinery primarily upon customer acceptance. The Company recognizes revenue from engineering services, which are primarily product development services, as the services are performed or as otherwise determined based on the substance of the agreement. The Company recognizes revenue from bill and hold transactions at the time the specified goods are complete and available to the customer. In the ordinary course of business, the recognitionCompany accepts sales returns from customers for defective goods, such amounts being immaterial. Although only applicable to an insignificant number of revenue under the updated standard will occur at a point in time, which is consistent with current practice. The Company has identified certain revenue streams for which the recognition of revenue may occur over time, which is a change from current practice. These revenue streams include certain customer stocking commitments. Additionally,transactions, the Company has identified certain revenue streams for whichelected to exclude sales taxes from the recognition of revenue may be deferred, which is also a change from current practice. These revenue streams include certain tooling sales.transaction price. The Company does not expect that the impact of these changes in the timing of revenue recognition for these items to be significant to the financial statements. The Company is also in the process of updating its internal controls and drafting the expanded disclosures as required by this ASU. The Company does not expect significant changes to its systems or internal controls. As the Company continues through the adoption process, it is possible that these preliminary conclusions may change.

In February 2016, the FASB issued ASU No. 2016-02, Leases. The guidance in this ASU supersedes the leasing guidance in Topic 840, Leases. Under the new guidance, lessees are required to recognize lease assets and lease liabilities on the balance sheet for those leases previously classified as operating leases. The amendments in ASU No. 2016-02 are effective for annual reporting periods beginning after December 15, 2018, including interim periods within that reporting period with early adoption permitted. The Company is evaluating the impact of adopting this ASU on its consolidated financial position and results of operations.

In March 2016, the FASB issued ASU No. 2016-09, Improvements to Employee Share Based Payment Accounting. This ASU simplifies several aspects of the accounting for share-based payment transactions, including income tax consequences, classification of awards, forfeitures and classification on the statement of cash flows. The Company adopted this ASU on January 1, 2017. As the Company has not had a significant amount of forfeitures historically, under the provisions of this ASU the Company has elected to account for forfeituresshipping and handling activities for which the Company is responsible under the terms and conditions of the sale not as they occur,performance obligations but rather than estimate expected forfeitures. as fulfillment costs. These activities are required to fulfill the Company’s promise to transfer the good and are expensed when revenue is recognized.

Disaggregated Revenue

The impactfollowing table presents the Company’s revenue disaggregated by the major types of adopting this updategoods and services sold to the Company’s Consolidated Financial Statements will depend on market factors and the timing and intrinsic value of future share-based compensation award vests and exercises. Subsequent to adoption, the Company notes the potential for volatility in its effective tax rate as any windfall or shortfall tax benefits related to its share-based compensation plans will be recorded directly to income tax expense in the Condensed Consolidated Statement of Income.customers (in thousands):

RevisionsContract balances

Certain revisions have been madeTiming of revenue recognition may differ from the timing of invoicing to customers. When invoicing occurs prior to revenue recognition, the 2016 Condensed Consolidated Statement of Cash Flows to conform toCompany has contract liabilities included within “deferred revenue” on the current year presentation relating to a reserve for uncertain tax positions and to cash paid for capital expenditures. The reclassification of a reserve for uncertain tax positions resulted in an increase to the change in refundable income taxes of $315,000 and a decrease to the change in accrued expenses of $315,000. A change in presentation of cash paid for capital expenditures resulted in a decrease of $311,000 in both the change in accounts payable and in additions to property, plant and equipment, net. These revisions had no impact on previously reported net income and are deemed immaterial to the previously issued financial statements.

condensed consolidated balance sheets.

The following table presents a roll-forward of contract liabilities activity for the six-month periods ended June 30,2023 and 2022 (in thousands):

Revenue recognized during the three-and-six-month periods ended June 30, 2023 from amounts included in deferred revenue at the beginning of the period were approximately $0.1 million and $2.0 million, respectively.

Revenue recognized during the three-and-six-month periods ended June 30, 2022 from amounts included in deferred revenue at the beginning of the period were approximately $1.5 million and $1.8 million, respectively.

When invoicing occurs after revenue recognition, the Company has contract assets, included within “receivables” on the condensed consolidated balance sheet.

The following table presents a roll-forward of contract assets activity for the six-month periods ended June 30, 2023 and 2022 (in thousands):

Supplemental cash flow information consists of the following (in thousands):

Receivables consist of the following (in thousands):

The Company is exposed to credit losses primarily through sales of products and services. The Company’s expected loss allowance methodology for accounts receivable is developed using historical collection experience, current and future economic and market conditions, and a review of the current status of customers' trade accounts receivables. Due to the short-term nature of such receivables, the estimate of the amount of accounts receivable that may not be collected is based on the aging of the accounts receivable balances and the financial condition of customers. Additionally, specific allowance amounts are established to record the appropriate provision for customers that have a higher probability of default. The Company’s monitoring activities include timely account reconciliation, dispute resolution, payment confirmation, consideration of customers' financial condition and macroeconomic conditions. Balances are written off when determined to be uncollectible. Estimates based on an assessment of anticipated payment and all other historical, current, and future information that is reasonably available are used to determine the allowance.

The following table provides a roll-forward of the allowance for credit losses that is deducted from accounts receivable to present the net amount expected to be collected as of June 30, 2023 and 2022 (in thousands):

Financial instruments recorded at fair value in the consolidated balance sheets, or disclosed at fair value in the footnotes, are categorized based upon the level of judgment associated with the inputs used to measure their fair value. Hierarchical levels defined by ASC 820,Fair Value Measurements and Disclosures, and directly related to the amount of subjectivity associated with inputs to fair valuation of these assets and liabilities, are as follows:

Level 1

Valued based on unadjusted, quoted prices in active markets for identical assets or liabilities at the measurement date. An active market for the asset or liability is a market in which transactions for the asset or liability occur with sufficient frequency and volume to provide pricing information on an ongoing basis.

Level 2

Valued based on either directly or indirectly observable prices for the asset or liability through correlation with market data at the measurement date and for the duration of the instrument’s anticipated life.

Level 3

Valued based on management’s best estimate of what market participants would use in pricing the asset or liability at the measurement date. Consideration is given to the risk inherent in the valuation technique and the risk inherent in the inputs to the model.

The following table presents the fair value and hierarchy levels, for financial assets that are measured at fair value on a recurring basis (in thousands):

The Company has financial instruments, such as accounts receivable, accounts payable, and accrued expenses, whichthat are stated at carrying amounts that approximate fair value because of the short maturity of those instruments. The carrying amount of the Company’s long-term debt approximates fair value as the interest rate on the debt approximates the estimated borrowing rate currently available to the Company.Company.

Share-based compensation is measured at the grant date based on the fair value of the award and is recognized as an expense over the requisite service period (generally the vesting period of the equity grant).

The Company issues share-based awards through several plans that are described in detail in the notes to the consolidated financial statements for the year ended December 31, 2016. 2022. The compensation cost charged against income for those plans is included in selling, general & administrative expenses as follows (in thousands):

The total income tax benefit recognized in the condensed consolidated statements of comprehensive income for share-based compensation arrangements was approximately $106,000$752 thousand and $67,000, respectively,$236 thousand for the three-monththree-month periods ended SeptemberJune 30, 2017 2023 and 2016,2022, respectively, and approximately $441,000$1.6 million and $264,000, respectively,$617 thousand for the nine-monthsix-month periods ended SeptemberJune 30,2023 and 2022, respectively.

The compensation expense for common stock grants during the six-month period ended June 30, 2017 and 2016.2023, was determined based on an approved fixed dollar amount with the number of shares to be determined on the date of issuance.

Stock Option grants

The following is a summary of stock option activity under all plans for the three-monthsix-month period ended September June 30, 2017:2023:

On June 6, 2017, 7, 2023, the Company granted options to its directors for the purchase of 12,3364,215 shares of the Company’s common stock at that day’s closing price of $167.98. On February 14, 2023, the Company granted options to its President and Chief Executive Officer for the purchase of 7,935 shares of common stock at that day’s closing price of $27.05.$111.54. The compensation expense related to these grants was determined as the fair value of the options using the Black ScholesBlack-Scholes option pricing model based on the following assumptions:

The stock volatility for each grant is determined based on a review of the experience of the weighted average of historical daily price changes of the Company’s common stock over the expected option term, and the risk-free interest rate is based on the U.S. Treasury yield curve in effect at the time of grant for periods correspondingcorrespond‐ing with the expected term of the option. The expected term is estimated based on historical option exercise activity.

During the nine-month periodssix-month period ended SeptemberJune 30, 2017 2023 and 2016,2022, the total intrinsic value of all options exercised (i.e., the difference between the market price on the exercise date and the price paid by the employees to exercise the options) was approximately $577,000$3.0 million and $564,000,$72 thousand, respectively, and the total amount of consideration received by the Company from the exercised options was approximately $802,000$789 thousand and $529,000,$21 thousand, respectively. At its discretion, the Company allows option holders to surrender previously owned common stock in lieu of paying the exercise price and withholding taxes. During the nine-monthsix-month period ended SeptemberJune 30, 2017 there2023, 861 shares were 6,511 shares surrendered at an average market price of $26.45. During$127.05. Zero shares were surrendered during the nine-monthsame period ended September 30, 2016 there were no shares surrendered for this purpose.in 2022.

On February 21, 2017, the Company’s Compensation Committee approved the award of $400,000, payable in shares of common stock to the Company’s Chairman, Chief Executive Officer, and President under the 2003 Incentive Plan. The shares will be issued in December, 2017.RSUs

The following table summarizes information about Restricted Stock Units (“RSUs”)RSU activity during the nine-monthsix-month period ended SeptemberJune 30, 2017:2023:

At the Company’s discretion, upon vesting, RSU holders are given the option to net-share settle to cover the required minimum withholding tax, and the remaining amount is converted into the equivalent number of common shares.shares and issued to the RSU holder. During the nine-month periodssix-month period ended SeptemberJune 30, 2017 2023 and 2016, 4,3772022, 20,457 and 3,88919,425 shares were surrendered at an average market price of $24.50$117.95 and $22.82,$67.05, respectively.

As of SeptemberJune 30, 2017, 2023, the Company had approximately $754,000$7.5 million of unrecognized compensation expense whichthat is expected to be recognized over a period of 3.5 years.

2.75 years.