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Note 11 - Product Warranty Obligations | 12 Months Ended
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Dec. 31, 2025
Notes to Financial Statements |
Product Warranty Disclosure [Text Block] |
11. | 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:
|  | Year Ended December 31, |
|  | 2025 |  |  | 2024 |  |  | 2023 |
Balance at beginning of period |  | $ | 110,987 |  |  | $ | 116,408 |  |  | $ | 138,011 |
Payments |  |  | (86,448 | ) |  |  | (88,990 | ) |  |  | (92,200 | )
Provision for warranty issued |  |  | 100,589 |  |  |  | 77,802 |  |  |  | 67,104 |
Changes in estimates for pre-existing warranties |  |  | 6,794 |  |  |  | 5,767 |  |  |  | 3,493 |
Balance at end of period |  | $ | 131,922 |  |  | $ | 110,987 |  |  | $ | 116,408 |
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:
|  | Year Ended December 31, |
|  | 2025 |  |  | 2024 |  |  | 2023 |
Balance at beginning of period |  | $ | 186,922 |  |  | $ | 155,870 |  |  | $ | 132,813 |
Deferred revenue contracts issued |  |  | 67,598 |  |  |  | 60,651 |  |  |  | 48,107 |
Amortization of deferred revenue contracts |  |  | (35,116 | ) |  |  | (29,599 | ) |  |  | (25,050 | )
Balance at end of period |  | $ | 219,404 |  |  | $ | 186,922 |  |  | $ | 155,870 |
The timing of recognition of the Company’s deferred revenue balance related to extended warranties as of December 31, 2025 is as follows:
2026 |  | $ | 38,958 |
2027 |  |  | 41,161 |
2028 |  |  | 37,912 |
2029 |  |  | 31,155 |
2030 |  |  | 24,050 |
After 2030 |  |  | 46,168 |
Total |  | $ | 219,404 |
The Company has a post-sale extended warranty marketing agreement with a third party, pursuant to which the Company is required to pay fees to the third-party service provider based on the number of extended warranty contracts the provider sells, which it classifies as costs to obtain a contract. These fees are deferred and recorded in the consolidated balance sheets as prepaid expenses and other assets when cost will be recognized in less than twelve months and operating lease and other assets when cost will be recognized in more than twelve months. These deferred costs are then amortized to cost of goods sold in the consolidated statements of comprehensive income over the same period that the underlying deferred revenue is recognized. Deferred contract costs as of December 31, 2025 and 2024 were $24,313 and $17,140, respectively. Amortization of deferred contract costs recorded during the years ended December 31, 2025, 2024 and 2023 was $3,824, $2,958, and $2,306, respectively. Standard product warranty obligations and extended warranty related deferred revenues are included in the consolidated balance sheets as follows:
|  | December 31, |
|  | 2025 |  |  | 2024 |
Product warranty liability: |  |  |  |  |  |  |  |
Current portion - accrued product warranty |  | $ | 44,716 |  |  | $ | 56,127 |
Long-term portion - other long-term liabilities |  |  | 87,206 |  |  |  | 54,860 |
Total |  | $ | 131,922 |  |  | $ | 110,987 |
Deferred revenue related to extended warranties: |  |  |  |  |  |  |  |
Current portion - other accrued liabilities |  | $ | 38,958 |  |  | $ | 34,069 |
Long-term portion - Deferred revenue |  |  | 180,446 |  |  |  | 152,853 |
Total |  | $ | 219,404 |  |  | $ | 186,922 |

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