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Note 9 - Product Warranty Obligations
 9 Months Ended
Sep. 30, 2025
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,

 
  

2025

  

2024

  

2025

  

2024

 

Balance at beginning of period

 $119,944  $106,279  $110,987  $116,408 

Payments

  (23,934)  (23,050)  (63,689)  (65,130)

Provision for warranty issued

  28,147   22,755   72,091   54,804 

Changes in estimates for pre-existing warranties

  1,144   1,458   5,912   1,360 

Balance at end of period

 $125,301  $107,442  $125,301  $107,442 

 

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 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,

 
  

2025

  

2024

  

2025

  

2024

 

Balance at beginning of period

 $202,650  $171,702  $186,922  $155,870 

Deferred revenue contracts issued

  17,567   15,169   50,299   45,042 

Amortization of deferred revenue contracts

  (8,787)  (7,577)  (25,791)  (21,618)

Balance at end of period

 $211,430  $179,294  $211,430  $179,294 

 

The timing of recognition of the Company’s deferred revenue balance related to extended warranties as of  September 30, 2025 is as follows:

 

Remainder of 2025

 $9,199 

2026

  38,423 

2027

  39,785 

2028

  34,718 

2029

  28,153 

After 2029

  61,152 

Total

 $211,430 

 

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

 

  

September 30,

  

December 31,

 
  

2025

  

2024

 

Product warranty liability

        

Current portion - Accrued product warranty

 $44,689  $56,127 

Long-term portion - other long-term liabilities

  80,612   54,860 

Total

 $125,301  $110,987 
         

Deferred revenue related to extended warranties

        

Current portion - Other accrued liabilities

 $37,746  $34,069 

Long-term portion - Deferred Revenue

  173,684   152,853 

Total

 $211,430  $186,922