Note 9 - Product Warranty Obligations

9 Months Ended

Sep. 30, 2024

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 related product to a customer based on 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,
	2024			2023			2024			2023
Balance at beginning of period	$	106,279		$	122,222		$	116,408		$	138,011
Payments		(23,050	)		(24,427	)		(65,130	)		(76,069	)
Provision for warranty issued		22,755			18,136			54,804			51,353
Changes in estimates for pre-existing warranties		1,458			3,630			1,360			6,266
Balance at end of period	$	107,442		$	119,561		$	107,442		$	119,561

The Company also 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. The Company believes the straight-line method is appropriate because the performance obligation is satisfied based on the passage of time. The amortization of deferred revenue is recorded to net sales in the 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,
	2024			2023			2024			2023
Balance at beginning of period	$	171,702		$	140,922		$	155,870		$	132,813
Deferred revenue contracts issued		15,169			10,615			45,042			30,774
Amortization of deferred revenue contracts		(7,577	)		(6,414	)		(21,618	)		(18,464	)
Balance at end of period	$	179,294		$	145,123		$	179,294		$	145,123

The timing of recognition of the Company’s deferred revenue balance related to extended warranties as of  September 30, 2024 is as follows:

Remainder of 2024	$	7,902
2025		33,387
2026		33,804
2027		29,451
2028		23,149
After 2028		51,601
Total	$	179,294

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

	September 30,		December 31,
	2024		2023
Product warranty liability
Current portion - accrued product warranty	$	60,377	$	65,298
Long-term portion - other long-term liabilities		47,065		51,110
Total	$	107,442	$	116,408
Deferred revenue related to extended warranties
Current portion - other accrued liabilities	$	32,797	$	28,203
Long-term portion - deferred revenue		146,497		127,667
Total	$	179,294	$	155,870