Note 9 - Product Warranty Obligations

6 Months Ended

Jun. 30, 2022

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 June 30,						Six Months Ended June 30,
	2022			2021			2022			2021
Balance at beginning of period	$	101,491		$	65,297		$	94,213		$	59,218
Payments		(18,434	)		(9,282	)		(31,458	)		(19,061	)
Provision for warranty issued		21,668			17,164			43,093			31,994
Changes in estimates for pre-existing warranties		5,613			1,579			4,490			2,607
Balance at end of period	$	110,338		$	74,758		$	110,338		$	74,758

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 June 30,						Six Months Ended June 30,
	2022			2021			2022			2021
Balance at beginning of period	$	115,923		$	93,182		$	111,647		$	89,788
Deferred revenue contracts issued		11,332			12,168			20,878			20,199
Amortization of deferred revenue contracts		(5,357	)		(4,866	)		(10,627	)		(9,503	)
Balance at end of period	$	121,898		$	100,484		$	121,898		$	100,484

The timing of recognition of the Company’s deferred revenue balance related to extended warranties as of  June 30, 2022 is as follows:

Remainder of 2022	$	10,929
2023		23,300
2024		22,741
2025		19,314
2026		15,263
After 2026		30,351
Total	$	121,898

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

	June 30,		December 31,
	2022		2021
Product warranty liability
Current portion - other accrued liabilities	$	68,405	$	59,052
Long-term portion - other long-term liabilities		41,933		35,161
Total	$	110,338	$	94,213
Deferred revenue related to extended warranties
Current portion - other accrued liabilities	$	22,503	$	20,556
Long-term portion - other long-term liabilities		99,395		91,091
Total	$	121,898	$	111,647