Note 10 - Product Warranty Obligations

3 Months Ended

Mar. 31, 2020

Notes to Financial Statements

Product Warranty Disclosure [Text Block]

10.   Product Warranty Obligations

The Company records a liability for standard product warranty obligations accounted for as assurance warranties at the time of sale to a customer based upon historical warranty experience. The Company also records a liability for specific warranty matters when they become known and are reasonably estimable. The following is a tabular reconciliation of the Company’s standard product warranty liability accounted for as an assurance warranty:

	Three Months Ended March 31,
	2020			2019
Balance at beginning of period	$	49,316		$	41,785
Product warranty reserve assumed in acquisition		-			212
Payments		(7,588	)		(5,634	)
Provision for warranty issued		8,286			6,960
Changes in estimates for pre-existing warranties		(991	)		239
Balance at end of period	$	49,023		$	43,562

Additionally, the Company sells extended warranty coverage for certain products, which it accounts for as a service warranty. The sales of extended warranties are recorded as deferred revenue, and typically have a duration of five to ten years. The deferred revenue related to extended warranty coverage is amortized over the duration of the extended warranty contract period, following the standard warranty period, using the straight-line method. Revenue is recognized on extended warranty contracts when the revenue recognition criteria are met, resulting in ratable recognition over the contract term. The amortization of deferred revenue is recorded to net sales in the condensed consolidated statements of comprehensive income. The following is a tabular reconciliation of the deferred revenue related to extended warranty coverage:

	Three Months Ended March 31,
	2020			2019
Balance at beginning of period	$	78,738		$	68,340
Deferred revenue contracts issued		5,939			5,800
Amortization of deferred revenue contracts		(3,797	)		(3,296	)
Balance at end of period	$	80,880		$	70,844

The timing of recognition of the Company’s deferred revenue balance related to extended warranties at March 31, 2020 is as follows:

Remainder of 2020	$	12,192
2021		17,253
2022		15,782
2023		12,351
2024		8,173
After 2024		15,129
Total	$	80,880

Standard product warranty obligations and extended warranty related deferred revenues are included in the condensed consolidated balance sheets as follows:

	March 31,		December 31,
	2020		2019
Product warranty liability
Current portion - other accrued liabilities	$	27,504	$	27,885
Long-term portion - other long-term liabilities		21,519		21,431
Total	$	49,023	$	49,316
Deferred revenue related to extended warranties
Current portion - other accrued liabilities	$	18,764	$	15,519
Long-term portion - other long-term liabilities		62,116		63,219
Total	$	80,880	$	78,738