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Note 9 - Product Warranty Obligations
 6 Months Ended
Jun. 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 June 30,

  

Six Months Ended June 30,

 
  

2024

  

2023

  

2024

  

2023

 

Balance at beginning of period

 $111,126  $128,599  $116,408  $138,011 

Payments

  (20,733)  (25,490)  (42,080)  (51,642)

Provision for warranty issued

  16,745   17,352   32,049   33,217 

Changes in estimates for pre-existing warranties

  (859)  1,761   (98)  2,636 

Balance at end of period

 $106,279  $122,222  $106,279  $122,222 

 

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 June 30,

  

Six Months Ended June 30,

 
  

2024

  

2023

  

2024

  

2023

 

Balance at beginning of period

 $163,793  $136,685  $155,870  $132,813 

Deferred revenue contracts issued

  15,089   10,433   29,873   20,159 

Amortization of deferred revenue contracts

  (7,180)  (6,196)  (14,041)  (12,050)

Balance at end of period

 $171,702  $140,922  $171,702  $140,922 

 

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

 

Remainder of 2024

 $15,235 

2025

  32,467 

2026

  31,887 

2027

  26,787 

2028

  20,690 

After 2028

  44,636 

Total

 $171,702 

 

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

 

  

June 30,

  

December 31,

 
  

2024

  

2023

 

Product warranty liability

        

Current portion - accrued product warranty

 $58,743  $65,298 

Long-term portion - other long-term liabilities

  47,536   51,110 

Total

 $106,279  $116,408 
         

Deferred revenue related to extended warranties

        

Current portion - other accrued liabilities

 $33,999  $28,203 

Long-term portion - deferred revenue

  137,703   127,667 

Total

 $171,702  $155,870