Note 9 - Product Warranty Obligations

9 Months Ended

Sep. 30, 2021

Notes to Financial Statements

Product Warranty Disclosure [Text Block]

9.   Product Warranty Obligations

The Company records a liability for standard product warranty obligations accounted for as assurance warranties at the time of sale of the product 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 September 30,						Nine Months Ended September 30,
	2021			2020			2021			2020
Balance at beginning of period	$	74,758		$	50,324		$	59,218		$	49,316
Product warranty reserve assumed in acquisition		1,085			124			1,085			124
Payments		(10,475	)		(8,667	)		(29,536	)		(24,136	)
Provision for warranty issued		16,527			10,949			48,521			27,691
Changes in estimates for pre-existing warranties		1,089			(575	)		3,696			(840	)
Balance at end of period	$	82,984		$	52,155		$	82,984		$	52,155

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 September 30,						Nine Months Ended September 30,
	2021			2020			2021			2020
Balance at beginning of period	$	100,484		$	83,153		$	89,788		$	78,738
Deferred revenue contracts issued		11,105			6,802			31,304			18,966
Amortization of deferred revenue contracts		(5,014	)		(4,241	)		(14,517	)		(11,990	)
Balance at end of period	$	106,575		$	85,714		$	106,575		$	85,714

The timing of recognition of the Company’s deferred revenue balance related to extended warranties at September 30, 2021 is as follows:

Remainder of 2021	$	5,140
2022		20,809
2023		21,053
2024		17,432
2025		13,661
After 2025		28,480
Total	$	106,575

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

	September 30,		December 31,
	2021		2020
Product warranty liability:
Current portion - other accrued liabilities	$	51,555	$	37,417
Long-term portion - other long-term liabilities		31,429		21,801
Total	$	82,984	$	59,218
Deferred revenue related to extended warranties:
Current portion - other accrued liabilities	$	20,090	$	18,857
Long-term portion - other long-term liabilities		86,485		70,931
Total	$	106,575	$	89,788