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Summary of Significant Accounting Policies (Tables)

3 Months Ended

Mar. 30, 2019

Accounting Policies [Abstract]

Fair Value Measurements, Recurring and Nonrecurring

The following tables represent the Company’s financial assets (in thousands), measured at fair value on a recurring basis as of March 30, 2019:

																	Reported as
	Adjusted Basis Cost				Gross Unrealized Gains				Gross Unrealized (Losses)				Estimated Fair Value				Cash and Cash Equivalents				Short-Term Investments
Cash	$	412,861			$	—			$	—			$	412,861			$	412,861			$	—
Level 1:
Certificates of deposit	180,000				—				—				180,000				—				180,000
Subtotal	180,000				—				—				180,000				—				180,000
Level 2:
None	—				—				—				—				—				—
Level 3:
None	—				—				—				—				—				—
Total assets measured at fair value	$	592,861			$	—			$	—			$	592,861			$	412,861			$	180,000

Property, Plant and Equipment

Property and equipment are stated at cost. Depreciation is calculated using the straight-line method over estimated useful lives as follows:

	Useful Lives
Aircraft and components	10 to 20 years
Buildings	39 years
Building improvements	7 to 15 years
Computer equipment	2 to 6 years
Demonstration units	3 years
Furniture and office equipment	2 to 6 years
Leasehold improvements	Lesser of useful life or term of lease
Machinery and equipment	5 to 10 years
Tooling	3 years
Vehicles	5 years

Property and equipment, net, consists of the following (in thousands):

	March 30, 2019				December 29, 2018
Building and building improvements	$	90,974			$	88,449
Machinery and equipment	57,001				54,525
Aircraft and vehicles	25,555				25,555
Land	23,762				23,762
Computer equipment	18,334				16,582
Leasehold improvements	16,896				16,428
Tooling	14,465				14,212
Furniture and office equipment	10,558				10,459
Demonstration units	465				470
Construction-in-progress (CIP)	11,360				13,320
Total property and equipment	269,370				263,762
Accumulated depreciation and amortization	(102,082		)		(97,790		)
Property and equipment, net	$	167,288			$	165,972

Changes in Product Warranty Accrual

Changes in the product warranty accrual were as follows (in thousands):

	Three Months Ended
	March 30, 2019				March 31, 2018
Warranty accrual, beginning of period	$	1,910			$	1,149
Accrual for warranties issued	720				430
Changes to pre-existing warranties (including changes in estimates)(1)	2,447				(278		)
Settlements made	(524		)		(161		)
Warranty accrual, end of period	$	4,553			$	1,140

______________

⁽¹⁾ In connection with its adoption of ASC 842 on December 30, 2018, the Company recorded an adjustment to pre-existing warranties of $2.5 million related to equipment previously capitalized under its deferred equipment agreements where the embedded leases were treated as operating leases under prior guidance. See “Recently Adopted Accounting Pronouncements” to these condensed consolidated financial statements for additional information related to the Company’s adoption of ASC 842.

Changes in Accumulated Other Comprehensive Loss

The change in accumulated other comprehensive loss was as follows (in thousands):

	Three Months Ended   March 30, 2019
Accumulated other comprehensive loss, beginning of period	$	(6,199	)
Unrealized gains from foreign currency translation	(577		)
Accumulated other comprehensive loss, end of period	$	(6,776	)

Reconciliation of Basic and Diluted Net Income Per Share

A reconciliation of basic and diluted net income per share is as follows (in thousands, except per share amounts):

		Three Months Ended
		March 30, 2019				March 31, 2018
Net income		$	49,322			$	45,630
Basic net income per share:
Weighted-average shares outstanding - basic		53,210				51,709
Net income per basic share		$	0.93			$	0.88
Diluted net income per share:
Weighted-average shares outstanding - basic		53,210				51,709
Diluted share equivalent: stock options, RSUs and PSUs		3,589				3,787
Weighted-average shares outstanding - diluted		56,799				55,496
Net income per diluted share		$	0.87			$	0.82

Supplemental Cash Flow Information

Supplemental cash flow information includes the following (in thousands):

	Three Months Ended
	March 30, 2019				March 31, 2018
Cash paid during the year for:
Interest	$	13			$	169
Income taxes	2,157				1,023
Operating lease payments included in the measurement of lease liabilities	1,748				—
Non-cash operating activities:
ROU assets obtained in exchange for lease liabilities(1)	$	22,983			$	—
Non-cash investing activities:
Unpaid purchases of property, plant and equipment	$	1,127			$	1,492
Non-cash financing activities:
Unsettled common stock proceeds from option exercises	$	583			$	794
Reconciliation of cash, cash equivalents and restricted cash:
Cash and cash equivalents	$	412,861			$	369,498
Restricted cash	149				152
Total cash, cash equivalents and restricted cash shown in the statement of cash flow	$	413,010			$	369,650

______________

⁽¹⁾ In connection with its adoption of ASC 842 on December 30, 2018, the Company recorded a lessee operating lease ROU asset of $22.5 million. See “Recently Adopted Accounting Pronouncements” to these condensed consolidated financial statements for additional information related to the Company’s adoption of ASC 842.

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