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Warranty
3 Months Ended
Apr. 02, 2022
Guarantees and Product Warranties [Abstract]  
Warranty

NOTE 3. WARRANTY

Most of our manufactured products are sold with warranties. Warranty periods, which vary by product components, generally range from 1 to 10 years; however, the warranty period for a limited number of specifically identified components in certain applications is a lifetime. The majority of the products sold have warranties on components which range from 1 to 3 years. The amount charged to expense for warranties is based on management’s assessment of the cost per service call and the number of service calls expected to be incurred to satisfy warranty obligations on the current net sales.

During the three months ended April 2, 2022, we recorded warranty expense at a rate of approximately 2.6% of sales, which was level with the three months ended April 3, 2021 of 2.6% of sales. Our warranty expense rate in the three months ended April 2, 2022 is a result of an increase in the use of higher-cost contract labor to respond to warranty claims due to a currently tight labor market, whereas in the three months ended April 3, 2021, the wind-down of the commercial business of NewSouth in the first quarter of 2021 resulted in warranty costs higher than those we would incur in the normal course of business.

The following table summarizes current period charges, adjustments to previous estimates, as well as settlements, which represent actual costs incurred during the period for the three months ended April 2, 2022 and April 3, 2021. The reserve is determined through specific identification and assessing our history. Of the accrued warranty reserve of $16.3 million at April 2, 2022, $13.8 million is classified within accrued expenses on the condensed consolidated balance sheet at April 2, 2022, with the remainder classified within other liabilities. Of the accrued warranty reserve of $13.5 million at January 1, 2022, $11.8 million is classified within accrued expenses on the condensed consolidated balance sheet at January 1, 2022, with the remainder classified within other liabilities.

 

 

 

Beginning

 

 

Charged

 

 

 

 

 

 

 

 

End of

 

Accrued Warranty

 

of Period

 

 

to Expense

 

 

Adjustments

 

 

Settlements

 

 

Period

 

(in thousands)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Three months ended April 2, 2022

 

$

13,504

 

 

$

9,148

 

 

$

750

 

 

$

(7,081

)

 

$

16,321

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Three months ended April 3, 2021

 

$

8,001

 

 

$

6,966

 

 

$

389

 

 

$

(5,713

)

 

$

9,643