Basis of Presentation (Policies)

4 Months Ended

Apr. 18, 2020

Accounting Policies [Abstract]

Reporting Segment

REPORTING SEGMENT — The company has one operating segment based on the nature of products the company sells, intertwined production and distribution model, the internal management structure and information that is regularly reviewed by the chief executive officer (“CEO”), who is the chief operating decision maker, for the purpose of assessing performance and allocating resources.

Accounts and Notes Receivable

Accounts and Notes Receivable.    Accounts and notes receivable consist of trade receivables, current portions of distributor notes receivable, and miscellaneous receivables. The company recognizes an allowance for credit losses related to its accounts and notes receivable to present the net amount expected to be collected as of the balance sheet date. The company estimates this allowance based on historical data such as days sales outstanding trends, previous write-offs of balances, and weekly reviews of aged trial balances, among others. Accounts and notes receivable balances are written off when deemed uncollectible and are recognized as a deduction from the allowance for credit losses. Expected recoveries, not to exceed the amount previously written off, are considered in determining the reserve balance at the balance sheet date.  As of fiscal year end, balances older than six months are deemed uncollectible and are fully reserved for in the allowance.  Activity in the allowance for trade accounts receivable credit losses for the sixteen weeks ended April 18, 2020 was as follows (amounts in thousands):

Allowance at December 28, 2019	$	2,089
Amounts charged to expense		4,668
Write-offs		—
Recoveries and other		(1,082	)
Allowance at April 18, 2020	$	5,675

The amounts charged to expense for bad debts in the table above are reported as adjustments to reconcile net (loss) income to net cash provided by operating activities in the Condensed Consolidated Statements of Cash Flows. The write-offs represent the amounts that are used to reduce the gross accounts and notes receivable at the time the balance due from the customer is written-off.  

In light of the current economic uncertainty for certain of our foodservice customers caused by COVID-19, we have recorded an additional bad debt allowance of $2.7 million in the first quarter of fiscal 2020.