Document and Entity Information
Document and Entity Information - shares | 3 Months Ended | |
Mar. 31, 2018 | Apr. 30, 2018 | |
Document And Entity Information | ||
Entity Registrant Name | GARMIN LTD | |
Entity Central Index Key | 1,121,788 | |
Document Type | 10-Q | |
Trading Symbol | GRMN | |
Document Period End Date | Mar. 31, 2018 | |
Amendment Flag | false | |
Current Fiscal Year End Date | --12-29 | |
Entity a Well-known Seasoned Issuer | No | |
Entity a Voluntary Filer | No | |
Entity's Reporting Status Current | Yes | |
Entity Filer Category | Large Accelerated Filer | |
Entity Common Stock, Shares Outstanding | 198,077,418 | |
Document Fiscal Period Focus | Q1 | |
Document Fiscal Year Focus | 2,018 |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets (Unaudited) - USD ($) $ in Thousands | Mar. 31, 2018 | Dec. 30, 2017 |
Current assets: | ||
Cash and cash equivalents | $ 898,981 | $ 891,488 |
Marketable securities | 167,745 | 161,687 |
Accounts receivable, net | 409,704 | 590,882 |
Inventories, net | 547,412 | 517,644 |
Deferred costs | 29,327 | 30,525 |
Prepaid expenses and other current assets | 138,114 | 153,912 |
Total current assets | 2,191,283 | 2,346,138 |
Property and equipment, net | 604,813 | 595,684 |
Restricted cash | 279 | 271 |
Marketable securities | 1,309,185 | 1,260,033 |
Deferred income taxes | 199,090 | 195,981 |
Noncurrent deferred costs | 32,428 | 33,029 |
Intangible assets, net | 421,006 | 409,801 |
Other assets | 97,138 | 107,352 |
Total assets | 4,855,222 | 4,948,289 |
Current liabilities: | ||
Accounts payable | 136,132 | 169,640 |
Salaries and benefits payable | 90,137 | 102,802 |
Accrued warranty costs | 35,422 | 36,827 |
Accrued sales program costs | 56,266 | 93,250 |
Deferred revenue | 98,660 | 103,140 |
Accrued royalty costs | 17,445 | 32,204 |
Accrued advertising expense | 16,007 | 30,987 |
Other accrued expenses | 69,949 | 93,652 |
Income taxes payable | 37,825 | 33,638 |
Dividend payable | 95,975 | |
Total current liabilities | 557,843 | 792,115 |
Deferred income taxes | 74,714 | 76,612 |
Noncurrent income taxes | 140,368 | 138,295 |
Noncurrent deferred revenue | 83,222 | 87,060 |
Other liabilities | 1,882 | 1,788 |
Stockholders' equity: | ||
Shares, CHF 0.10 par value, 198,077 shares authorized and issued; 188,521 shares outstanding at March 31, 2018; and 188,189 shares outstanding at December 30, 2017; | 17,979 | 17,979 |
Additional paid-in capital | 1,818,532 | 1,828,386 |
Treasury stock | (450,160) | (468,818) |
Retained earnings | 2,546,400 | 2,418,444 |
Accumulated other comprehensive income | 64,442 | 56,428 |
Total stockholders' equity | 3,997,193 | 3,852,419 |
Total liabilities and stockholders' equity | $ 4,855,222 | $ 4,948,289 |
Condensed Consolidated Balance3
Condensed Consolidated Balance Sheets (Unaudited) (Parenthetical) - SFr / shares shares in Thousands | Mar. 31, 2018 | Dec. 30, 2017 |
Common shares, authorized | 198,077 | 198,077 |
Common shares, issued | 198,077 | 198,077 |
Common shares, outstanding | 188,521 | 188,189 |
CHF [Member] | ||
Common shares, par value (in Swiss Franc per share) | SFr 0.10 | SFr 0.10 |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Income (Unaudited) - USD ($) shares in Thousands, $ in Thousands | 3 Months Ended | |
Mar. 31, 2018 | Apr. 01, 2017 | |
Income Statement [Abstract] | ||
Net sales | $ 710,872 | $ 641,510 |
Cost of goods sold | 284,337 | 268,704 |
Gross profit | 426,535 | 372,806 |
Advertising expense | 25,311 | 31,525 |
Selling, general and administrative expense | 117,065 | 102,051 |
Research and development expense | 141,957 | 122,202 |
Total operating expense | 284,333 | 255,778 |
Operating income | 142,202 | 117,028 |
Other income (expense): | ||
Interest income | 10,227 | 8,444 |
Foreign currency gains (losses) | 816 | (37,497) |
Other income | 735 | 400 |
Total other income (expense) | 11,778 | (28,653) |
Income before income taxes | 153,980 | 88,375 |
Income tax provision (benefit) | 24,606 | (150,029) |
Net income | $ 129,374 | $ 238,404 |
Net income per share: | ||
Basic (in dollars per share) | $ 0.69 | $ 1.27 |
Diluted (in dollars per share) | $ 0.68 | $ 1.26 |
Weighted average common shares outstanding: | ||
Basic (in shares) | 188,322 | 188,333 |
Diluted (in shares) | 189,292 | 189,031 |
Condensed Consolidated Stateme5
Condensed Consolidated Statements of Comprehensive Income (Unaudited) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2018 | Apr. 01, 2017 | |
Statement of Comprehensive Income [Abstract] | ||
Net income | $ 129,374 | $ 238,404 |
Foreign currency translation adjustment | 23,500 | 62,614 |
Change in fair value of available-for-sale marketable securities, net of deferred taxes | (15,034) | 6,901 |
Comprehensive income | $ 137,840 | $ 307,919 |
Condensed Consolidated Stateme6
Condensed Consolidated Statements of Cash Flows (Unaudited) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | |
Mar. 31, 2018 | Apr. 01, 2017 | Dec. 30, 2017 | |
Operating activities: | |||
Net income | $ 129,374 | $ 238,404 | |
Adjustments to reconcile net income to net cash provided by operating activities: | |||
Depreciation | 16,014 | 14,658 | |
Amortization | 7,132 | 7,070 | |
(Gain) loss on sale or disposal of property and equipment | (15) | 8 | |
Provision for doubtful accounts | 57 | (294) | |
Provision for obsolete and slow moving inventories | 3,959 | 7,193 | |
Unrealized foreign currency (gain) loss | (517) | 42,571 | |
Deferred income taxes | 416 | (171,432) | |
Stock compensation expense | 13,440 | 8,206 | |
Realized losses on marketable securities | 196 | 291 | |
Changes in operating assets and liabilities, net of acquisitions: | |||
Accounts receivable | 187,693 | 135,253 | |
Inventories | (26,455) | (41,398) | |
Other current and non-current assets | 9,037 | 7,534 | |
Accounts payable | (36,708) | (44,180) | |
Other current and non-current liabilities | (99,935) | (81,038) | |
Deferred revenue | (8,368) | (12,041) | |
Deferred costs | 1,807 | 2,647 | |
Income taxes payable | 17,063 | 6,943 | |
Net cash provided by operating activities | 214,190 | 120,395 | |
Investing activities: | |||
Purchases of property and equipment | (26,336) | (25,538) | |
Proceeds from sale of property and equipment | 121 | 7 | |
Purchase of intangible assets | (1,622) | (1,222) | |
Purchase of marketable securities | (140,623) | (96,049) | |
Redemption of marketable securities | 65,253 | 109,526 | |
Acquisitions, net of cash acquired | (9,417) | ||
Net cash used in investing activities | (112,624) | (13,276) | |
Financing activities: | |||
Dividends | (96,146) | (96,028) | |
Proceeds from issuance of treasury stock related to equity awards | 1,926 | ||
Purchase of treasury stock related to equity awards | (6,562) | (3,452) | |
Purchase of treasury stock under share repurchase plan | (27,873) | ||
Net cash used in financing activities | (100,782) | (127,353) | |
Effect of exchange rate changes on cash, cash equivalents, and restricted cash | 6,717 | 6,932 | |
Net increase (decrease) in cash, cash equivalents, and restricted cash | 7,501 | (13,302) | |
Cash, cash equivalents, and restricted cash at beginning of period | 891,759 | 846,996 | $ 846,996 |
Cash, cash equivalents, and restricted cash at end of period | $ 899,260 | $ 833,694 | $ 891,759 |
Accounting Policies
Accounting Policies | 3 Months Ended |
Mar. 31, 2018 | |
Accounting Policies [Abstract] | |
Accounting Policies | 1. Accounting Policies Basis of Presentation The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with generally accepted accounting principles for interim financial information and with the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by generally accepted accounting principles for complete financial statements. In the opinion of management, all adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation have been included. Additionally, the condensed consolidated financial statements should be read in conjunction with Item 2 of Management's Discussion and Analysis of Financial Condition and Results of Operations, included in this Form 10-Q. Operating results for the 13-week period ended March 31, 2018 are not necessarily indicative of the results that may be expected for the year ending December 29, 2018. The condensed consolidated balance sheet at December 30, 2017 has been derived from the audited financial statements at that date but does not include all of the information and footnotes required by generally accepted accounting principles for complete financial statements. For further information, refer to the consolidated financial statements and footnotes thereto included in the Company’s Annual Report on Form 10-K for the year ended December 30, 2017. The Company’s fiscal year is based on a 52-53 week period ending on the last Saturday of the calendar year. Therefore, the financial results of certain 53-week fiscal years, and the associated 14-week quarters, will not be exactly comparable to the prior and subsequent 52-week fiscal years and the associated 13-week quarters. The quarters ended March 31, 2018 and April 1, 2017 both contain operating results for 13 weeks. As previously announced and discussed below within the “ Recently Adopted Accounting Standards , Recently Adopted Accounting Standards Revenue from Contracts with Customers In May 2014, the FASB issued ASU No. 2014-09, Revenue from Contracts with Customers (Topic 606) (“ASU 2014-09”), which supersedes previous revenue recognition guidance. The FASB issued several updates amending or relating to ASU 2014-09 (collectively, the “new revenue standard”). The Company has adopted the new revenue standard effective in the 13-week period ending March 31, 2018 using the full retrospective method, which requires the Company to restate each prior reporting period presented in future financial statement issuances. The impacts of the new revenue standard relate to our accounting for certain arrangements within the auto segment. A portion of the Company’s auto segment contracts have historically been accounted for under Accounting Standards Codification (ASC) Topic 985-605 Software-Revenue Recognition (Topic 985-605). Under Topic 985-605, the Company deferred revenue and associated costs of all elements of multiple-element software arrangements if vendor-specific objective evidence of fair value (VSOE) could not be established for an undelivered element (e.g. map updates). In applying the new revenue standard to certain contracts that include both software licenses and map updates, we will recognize the portion of revenue and costs related to the software license at the time of delivery rather than ratably over the map update period. Additionally, for certain multiple-element arrangements within the Company’s auto segment, the Company’s policy has been to allocate consideration to traffic services and recognize the revenue and associated cost of royalties ratably over the estimated life of the underlying product. Under the new revenue standard, we will recognize revenue and associated costs of royalties related to certain traffic services at the time of hardware and/or software delivery. Specifically, the new revenue standard emphasizes the timing of the Company’s performance, and upon delivery of the navigation device and/or software, the Company has fully performed its obligation with respect to the design and production of the product to receive and interpret the broadcast traffic signal for the benefit of the end user. The changes in accounting policy described above collectively result in reductions to deferred costs (asset) and deferred revenue (liability) balances, and accelerate the recognition of revenues and deferred costs in the auto segment going forward. Summarized financial information depicting the impact of the new revenue standard is presented below. The Company’s historical net cash flows provided by or used in operating, investing, and financing activities are not impacted by adoption of the new revenue standard. 13-Weeks Ended April 1, 2017 As reported Restated (1) Impact Net sales $ 638,546 $ 641,510 $ 2,964 Gross profit 372,123 372,806 683 Operating income 116,345 117,028 683 Income tax (benefit) (150,120 ) (150,029 ) 91 Net income $ 237,812 $ 238,404 $ 592 Diluted net income per share $ 1.26 $ 1.26 $ — (1) The Restated results presented above are restated under ASC Topic 606. Amounts related to the income tax effect of the new standard that were previously disclosed as the anticipated adoption impact in our press release attached as Exhibit 99.1 to our Current Report on Form 8-K filed with the Securities and Exchange Commission (SEC) on February 21, 2018 have been revised in this Note by immaterial amounts in connection with our adoption of ASC Topic 606. December 30, 2017 December 31, 2016 As reported Restated (2) Impact As reported Restated (2) Impact Current assets: Deferred costs $ 48,312 $ 30,525 $ (17,787 ) $ 47,395 $ 34,665 $ (12,730 ) Total current assets 2,363,925 2,346,138 (17,787 ) 2,263,016 2,250,286 (12,730 ) Deferred income taxes 199,343 195,981 (3,361 ) 110,293 107,655 (2,638 ) Noncurrent deferred costs 73,851 33,029 (40,822 ) 56,151 30,934 (25,217 ) Total assets $ 5,010,260 $ 4,948,289 $ (61,971 ) $ 4,525,133 $ 4,484,549 $ (40,584 ) Current liabilities: Deferred revenue 139,681 103,140 (36,541 ) 146,564 118,496 (28,068 ) Total current liabilities 828,656 792,115 (36,541 ) 782,735 754,667 (28,068 ) Deferred income taxes 75,215 76,612 1,396 61,220 62,617 1,397 Non-current deferred revenue 163,840 87,060 (76,780 ) 140,407 91,238 (49,169 ) Retained earnings 2,368,874 2,418,444 49,570 2,056,702 2,092,221 35,519 Accumulated other comprehensive income 56,045 56,428 382 (36,761 ) (37,024 ) (263 ) Total stockholders' equity 3,802,466 3,852,419 49,954 3,418,003 3,453,259 35,256 Total liabilities and stockholders’ equity $ 5,010,260 $ 4,948,289 $ (61,971 ) $ 4,525,133 $ 4,484,549 $ (40,584 ) 52-Weeks Ended December 30, 2017 53-Weeks Ended December 31, 2016 As reported Restated (2) Impact As reported Restated (2) Impact Net sales $ 3,087,004 $ 3,121,560 $ 34,556 $ 3,018,665 $ 3,045,797 $ 27,132 Gross profit 1,783,164 1,797,941 14,777 1,679,570 1,688,525 8,955 Operating income 668,860 683,637 14,777 623,909 632,864 8,955 Income tax (benefit) provision (12,661 ) (11,936 ) 725 118,856 120,901 2,045 Net income $ 694,955 $ 709,007 $ 14,052 $ 510,814 $ 517,724 $ 6,910 Diluted net income per share $ 3.68 $ 3.76 $ 0.08 $ 2.70 $ 2.73 $ 0.03 (2) The Restated results presented above are restated under ASC Topic 606. Amounts related to the income tax effect of the new standard that were previously disclosed as the anticipated adoption impact in Note 2, Summary of Significant Accounting Policies, in the notes to the consolidated financial statements of our fiscal 2017 Annual Report on Form 10-K filed with the SEC on February 21, 2018 have been revised in this Note by immaterial amounts in connection with our adoption of ASC Topic 606. Financial Instruments – Recognition, Measurement, Presentation, and Disclosure In January 2016, the FASB issued Accounting Standards Update No. 2016-01, Financial Instruments—Overall (Subtopic 825-10): Recognition and Measurement of Financial Assets and Financial Liabilities (“ASU 2016-01”). The standard addresses certain aspects of recognition, measurement, presentation, and disclosure of financial instruments. The Company has adopted the new standard effective in the 13-week period ending March 31, 2018. The adoption did not have a material impact on the Company’s financial position or results of operations. Statement of Cash Flows In August 2016, the FASB issued Accounting Standards Update No. 2016-15, Statement of Cash Flows (Topic 230): Classification of Certain Cash Receipts and Cash Payments (“ASU 2016-15”), which adds or clarifies guidance on the classification of certain cash receipts and payments in the statement of cash flows. The standard addresses eight specific cash flow issues with the objective of reducing diversity in practice. In November 2016, the FASB issued Accounting Standards Update No. 2016-18, Statement of Cash Flows (Topic 230): Restricted Cash (“ASU 2016-18”), which requires restricted cash and restricted cash equivalents to be included with cash and cash equivalents when reconciling changes in the total amounts within the statement of cash flows. The Company has adopted the new standards effective in the 13-week period ending March 31, 2018. The adoption of ASU 2016-15 did not have a material impact to the Company’s statements of cash flows. The amendments of ASU 2016-18 were applied using a retrospective transition method, resulting in immaterial changes to the presentation of the Company’s statements of cash flows. The total of cash and cash equivalents and restricted cash balances presented on the condensed consolidated balance sheet reconciles to the total cash, cash equivalents, and restricted cash shown in the condensed consolidated statements of cash flows. Income Taxes In October 2016, the FASB issued Accounting Standards Update No. 2016-16, Income Taxes (Topic 740): Intra-Entity Transfers of Assets Other than Inventory (“ASU 2016-16”), which requires recognition of the income tax consequences of an intra-entity transfer of an asset other than inventory when the transfer occurs. The Company has adopted the new standard effective beginning in the 13-week period ending March 31, 2018, which resulted in a reclassification of $1,700 of certain prepaid tax balances in a cumulative effect to retained earnings as of the date of adoption. Income Statement – Reporting Comprehensive Income In February 2018, the FASB issued Accounting Standards Update No. 2018-02, Income Statement – Reporting Comprehensive Income (Topic 220): Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income (“ASU 2018-02”), which allows for stranded tax effects in accumulated other comprehensive income resulting from the U.S. Tax Cuts and Jobs Act to be reclassified to retained earnings. The Company has elected to early adopt the new standard effective in the 13-week period ending March 31, 2018, resulting in reclassification of approximately $450 from accumulated other comprehensive income into retained earnings. The tax effects that were reclassified only relate to amounts resulting from the U.S. Tax Cuts and Jobs Act. Significant Accounting Policies For a description of the significant accounting policies and methods used in the preparation of the Company’s condensed consolidated financial statements, refer to Note 2, “Summary of Significant Accounting Policies” in the Notes to the Consolidated Financial Statements in Part II, Item 8 of the Company’s Annual Report on Form 10-K for the fiscal year ended December 30, 2017. Other than the policies discussed below, there were no material changes to the Company’s significant accounting policies during the 13-week period ended March 31, 2018. Revenue Recognition The Company recognizes revenue upon the transfer of control of promised products or services to the customer in an amount that depicts the consideration the Company expects to be entitled to for the related products or services. For the large majority of the Company’s sales, transfer of control occurs once product has shipped and title and risk of loss have transferred to the customer. The Company offers certain tangible products with ongoing services promised over a period of time, typically the useful life of the related tangible product. When we have identified such services as both capable of being distinct and separately identifiable from the related tangible product, the associated revenue allocated to such services is recognized over time. The Company generally does not offer specified or unspecified upgrade rights to its customers in connection with software sales. For products that include tangible hardware that contains software essential to the tangible product’s functionality and ongoing services identified as separately identifiable performance obligations, the Company allocates revenue to all performance obligations based on their relative standalone selling prices (“SSP”), with the amounts allocated to ongoing services deferred and recognized over a period of time. These ongoing services primarily consist of the Company’s contractual promises to provide personal navigation device (PND) users with lifetime map updates (LMU) and server-based traffic services. In addition, we provide map update services (map care) over a contractual period in certain hardware and software contracts with original equipment manufacturers (OEMs). The Company has determined that directly observable prices do not exist for LMU, map care, or server-based traffic, as stand-alone and unbundled unit sales do not occur on more than a limited basis. Therefore, the Company uses the expected cost plus a margin as the primary indicator to calculate relative SSP of the LMU, map care, and traffic performance obligations. The revenue and associated costs allocated to the LMU, map care, and/or the server-based traffic service are deferred and recognized ratably over the estimated life of the products of approximately 3 years for PNDs, or the contractual map care period in OEM contracts of 3-10 years as we believe our efforts as it relates to providing these services are spread evenly throughout the performance period. In addition to the products listed above, the Company has offered certain other products with ongoing performance obligations including mobile applications, incremental navigation and/or communication service subscriptions, aviation database subscriptions, and extended warranties that are individually immaterial. The Company records revenue net of sales tax and variable consideration such as trade discounts and customer returns. Payment is due typically within 90 days or less of shipment of product, or upon the grant of a given software license (as applicable). The Company records estimated reductions to revenue in the form of variable consideration for customer sales programs, returns and incentive offerings including rebates, price protection (product discounts offered to retailers to assist in clearing older products from their inventories in advance of new product releases), promotions and other volume-based incentives. The reductions to revenue are based on estimates and judgments using historical experience and expectation of future conditions. Changes in these estimates could negatively affect the Company’s operating results. These incentives are reviewed periodically and, with the exceptions of price protection and certain other promotions, typically accrued for on a percentage of sales basis. Deferred Revenues and Costs Deferred revenue consists primarily of the transaction price allocated to performance obligations that are recognized over a period of time basis as discussed in the Revenue Recognition The Company applies a practical expedient, as permitted within ASC 340, to expense as incurred the incremental costs to obtain a contract when the amortization period of the asset that would have otherwise been recognized is one year or less. Shipping and Handling Costs Shipping and handling activities are typically performed before the customer obtains control of the good, and the related costs are therefore expensed as incurred. Shipping and handling costs are included in cost of goods sold in the accompanying condensed consolidated financial statements. |
Inventories
Inventories | 3 Months Ended |
Mar. 31, 2018 | |
Inventory Disclosure [Abstract] | |
Inventories | 2. Inventories The components of inventories consist of the following: March 31, December 30, Raw materials $ 190,213 $ 179,659 Work-in-process 84,431 75,754 Finished goods 272,768 262,231 Inventory, net of reserves $ 547,412 $ 517,644 |
Earnings Per Share
Earnings Per Share | 3 Months Ended |
Mar. 31, 2018 | |
Net income per share: | |
Earnings Per Share | 3. Earnings Per Share The following table sets forth the computation of basic and diluted net income per share: 13-Weeks Ended March 31, April 1, Numerator: Numerator for basic and diluted net income per share - net income $ 129,374 $ 238,404 Denominator: Denominator for basic net income per share – weighted-average common shares 188,322 188,333 Effect of dilutive securities – stock options, stock appreciation rights and restricted stock units 970 698 Denominator for diluted net income per share – adjusted weighted-average common shares 189,292 189,031 Basic net income per share $ 0.69 $ 1.27 Diluted net income per share $ 0.68 $ 1.26 There were 0 and 2,593 anti-dilutive stock options, stock appreciation rights and restricted stock units (collectively “equity awards”) outstanding during the 13-week periods ended March 31, 2018 and April 1, 2017, respectively. There were 332 and 150 net shares issued as a result of exercises and releases of equity awards for the 13-week periods ended March 31, 2018 and April 1, 2017, respectively. |
Segment Information
Segment Information | 3 Months Ended |
Mar. 31, 2018 | |
Segment Reporting [Abstract] | |
Segment Information | 4. Segment Information The Company has identified five reportable segments – auto, aviation, marine, outdoor and fitness. Net sales (“revenue”), gross profit, and operating income for each of the Company’s reportable segments are presented below. Reportable Segments Outdoor Fitness Marine Auto Aviation Total 13-Weeks Ended March 31, 2018 Net sales $ 144,258 $ 166,035 $ 113,554 $ 141,312 $ 145,713 $ 710,872 Gross profit 93,285 96,601 66,683 61,012 108,954 426,535 Operating income 43,822 33,374 13,131 3,468 48,407 142,202 13-Weeks Ended April 1, 2017 Net sales $ 115,875 $ 137,831 $ 104,445 $ 160,488 $ 122,871 $ 641,510 Gross profit 73,469 77,741 59,747 70,616 91,233 372,806 Operating income 34,451 18,472 18,145 7,352 38,608 117,028 Allocation of certain research and development expenses, and selling, general, and administrative expenses are made to each segment on a percent of revenue basis. Net sales to external customers and property and equipment, net by geographic region are as follows as of and for the 13-week periods ended March 31, 2018 and April 1, 2017. Note that APAC includes Asia Pacific and Australian Continent and EMEA includes Europe, the Middle East and Africa: Americas APAC EMEA Total March 31, 2018 Net sales to external customers $ 345,975 $ 118,985 $ 245,912 $ 710,872 Property and equipment, net $ 388,531 $ 176,245 $ 40,037 $ 604,813 April 1, 2017 Net sales to external customers $ 324,630 $ 91,545 $ 225,335 $ 641,510 Property and equipment, net $ 312,630 $ 152,804 $ 38,406 $ 503,840 |
Warranty Reserves
Warranty Reserves | 3 Months Ended |
Mar. 31, 2018 | |
Product Warranties Disclosures [Abstract] | |
Warranty Reserves | 5. Warranty Reserves The Company’s products sold are generally covered by a standard warranty for periods ranging from one to three years. The Company’s estimate of costs to service its warranty obligations are based on historical experience and expectation of future conditions and are recorded as a liability on the balance sheet. The following reconciliation provides an illustration of changes in the aggregate warranty reserve. 13-Weeks Ended March 31, April 1, Balance - beginning of period $ 36,827 $ 37,233 Accrual for products sold during the period 10,012 8,200 Expenditures (11,417 ) (11,006 ) Balance - end of period $ 35,422 $ 34,427 |
Commitments and Contingencies
Commitments and Contingencies | 3 Months Ended |
Mar. 31, 2018 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | 6. Commitments and Contingencies Commitments The Company is party to certain commitments, which include purchases of raw materials, advertising expenditures, and other indirect purchases in connection with conducting our business. The aggregate amount of purchase orders and other commitments open as of March 31, 2018 was approximately $325,200. We cannot determine the aggregate amount of such purchase orders that represent contractual obligations because purchase orders may represent authorizations to purchase rather than binding agreements. Our purchase orders are based on our current needs and are typically fulfilled within short periods of time. Contingencies In the normal course of business, the Company and its subsidiaries are parties to various legal claims, investigations and complaints, including matters alleging patent infringement and other intellectual property claims. The Company evaluates, on a quarterly and annual basis, developments in legal proceedings, investigations, claims, and other loss contingencies that could affect any required accrual or disclosure or estimate of reasonably possible loss or range of loss. An estimated loss from a loss contingency is accrued by a charge to income if it is probable that an asset has been impaired or a liability has been incurred and the amount of the loss can be reasonably estimated. If a range of loss is estimated, and some amount within that range appears to be a better estimate than any other amount within that range, then that amount is accrued. If no amount within the range can be identified as a better estimate than any other amount, the Company accrues the minimum amount in the range. If an outcome unfavorable to the Company is determined to be probable, but the amount of loss cannot be reasonably estimated or is determined to be reasonably possible, but not probable, we disclose the nature of the contingency and an estimate of the possible loss or range of loss or a statement that such an estimate cannot be made. The Company’s aggregate range of reasonably possible losses includes (1) matters where a liability has been accrued and there is a reasonably possible loss in excess of the amount accrued for that liability, and (2) matters where a loss is believed to be reasonably possible, but not probable, and a liability therefore has not been accrued. This aggregate range only represents the Company’s estimate of reasonably possible losses and does not represent the Company’s maximum loss exposure. The assessment regarding whether a loss is probable or reasonably possible, and whether the loss or a range of loss is estimable, often involves a series of complex judgments about future events. In assessing the probability of an outcome in a lawsuit, claim or assessment that could be unfavorable to the Company, we consider the following factors, among others: a) the nature of the litigation, claim, or assessment; b) the progress of the case; c) the opinions or views of legal counsel and other advisers; d) our experience in similar cases; e) the experience of other entities in similar cases; and f) how we intend to respond to the lawsuit, claim, or assessment. Costs incurred in defending lawsuits, claims or assessments are expensed as incurred. Management of the Company currently does not believe it is reasonably possible that the Company may have incurred a material loss, or a material loss in excess of recorded accruals, with respect to loss contingencies in the aggregate, for the fiscal quarter ended March 31, 2018. The results of legal proceedings, investigations and claims, however, cannot be predicted with certainty. An adverse resolution of one or more of such matters in excess of management’s expectations could have a material adverse effect in the particular quarter or fiscal year in which a loss is recorded, but based on information currently known, the Company does not believe it is likely that losses from such matters would have a material adverse effect on the Company’s business or its consolidated financial position, results of operations or cash flows. |
Income Taxes
Income Taxes | 3 Months Ended |
Mar. 31, 2018 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | 7. Income Taxes The Company recorded an income tax expense of $24,606 in the 13-week period ended March 31, 2018, compared to an income tax benefit of $150,029 in the 13-week period ended April 1, 2017, which included a $168,755 income tax benefit due to the revaluation of certain Switzerland deferred tax assets. The effective tax rate was 16.0% in the first quarter of 2018, compared to (169.8%) in the first quarter of 2017. Excluding the effect of the $168,755 revaluation of deferred tax assets in first quarter of 2017, the first quarter of 2018 effective tax rate decreased by 520 basis points primarily due to the reduction of the U.S. corporate tax rate and the net release of uncertain tax position reserves. On December 22, 2017, the Tax Cuts and Jobs Act was enacted into law in the United States. Due to the complexities of the new tax legislation, the Securities and Exchange Commission has issued Staff Accounting Bulletin No. 118 (“SAB 118”) which allows for the recognition of provisional amounts during a measurement period. The Company recorded a provisional re-measurement of its deferred tax assets and liabilities in the fourth quarter of 2017. Income tax expense recorded in the first quarter of 2018 includes the impact of the new tax legislation as currently interpreted by the Company. The Company will continue to assess the impact of the new tax legislation, as well as any related future regulations and rules, and will record any additional impacts as identified during the measurement period, if necessary. The Company does not expect any such potential adjustments in the future periods will materially impact the Company’s financial condition or result of operations. |
Marketable Securities
Marketable Securities | 3 Months Ended |
Mar. 31, 2018 | |
Marketable Securities [Abstract] | |
Marketable Securities | 8. Marketable Securities The Financial Accounting Standards Board (“FASB”) ASC topic entitled Fair Value Measurements and Disclosures defines fair value as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date (exit price). The accounting guidance classifies the inputs used to measure fair value into the following hierarchy: Level 1 Unadjusted quoted prices in active markets for the identical asset or liability Level 2 Observable inputs for the asset or liability, either directly or indirectly, such as quoted prices for similar assets or liabilities in active markets, quoted prices for identical or similar assets or liabilities in markets that are not active, or inputs other than quoted prices that are observable for the asset or liability Level 3 Unobservable inputs for the asset or liability The Company endeavors to utilize the best available information in measuring fair value. Financial assets and liabilities are classified in their entirety based on the lowest level of input that is significant to the fair value measurement. Valuation is based on prices obtained from an independent pricing vendor using both market and income approaches. The primary inputs to the valuation include quoted prices for similar assets in active markets, quoted prices for identical or similar assets in markets that are not active, contractual cash flows, benchmark yields, and credit spreads. The method described above may produce a fair value calculation that may not be indicative of net realizable value or reflective of future fair values. Furthermore, while the Company believes its valuation methods are appropriate and consistent with other market participants, the use of different methodologies or assumptions to determine the fair value of certain financial instruments could result in a different fair value measurement at the reporting date. Available-for-sale securities measured at fair value on a recurring basis are summarized below: Fair Value Measurements as of March 31, 2018 Total Level 1 Level 2 Level 3 U.S. Treasury securities $ 29,058 $ — $ 29,058 $ — Agency securities 41,744 — 41,744 — Mortgage-backed securities 158,839 — 158,839 — Corporate securities 892,848 — 892,848 — Municipal securities 185,586 — 185,586 — Other 168,855 — 168,855 — Total $ 1,476,930 $ — $ 1,476,930 $ — Fair Value Measurements as of December 30, 2017 Total Level 1 Level 2 Level 3 U.S. Treasury securities $ 19,337 $ — $ 19,337 $ — Agency securities 43,361 — 43,361 — Mortgage-backed securities 174,615 — 174,615 — Corporate securities 816,793 — 816,793 — Municipal securities 186,105 — 186,105 — Other 181,509 — 181,509 — Total $ 1,421,720 $ — $ 1,421,720 $ — Marketable securities classified as available-for-sale securities are summarized below: Available-For-Sale Securities as Amortized Cost Gross Unrealized Gains Gross Unrealized Losses Fair Value U.S. Treasury securities $ 29,439 $ — $ (381 ) $ 29,058 Agency securities 42,901 — (1,156 ) 41,745 Mortgage-backed securities 166,458 6 (7,625 ) 158,839 Corporate securities 919,920 45 (27,117 ) 892,848 Municipal securities 188,728 14 (3,157 ) 185,585 Other 171,641 1 (2,787 ) 168,855 Total $ 1,519,087 $ 66 $ (42,223 ) $ 1,476,930 Available-For-Sale Securities as of December 30, 2017 Amortized Cost Gross Unrealized Gains Gross Unrealized Losses Fair Value U.S. Treasury securities $ 19,591 $ — $ (254 ) $ 19,337 Agency securities 44,191 1 (831 ) 43,361 Mortgage-backed securities 180,470 13 (5,868 ) 174,615 Corporate securities 830,447 136 (13,790 ) 816,793 Municipal securities 187,999 110 (2,004 ) 186,105 Other 183,730 2 (2,223 ) 181,509 Total $ 1,446,428 $ 262 $ (24,970 ) $ 1,421,720 The Company’s investment policy targets low risk investments with the objective of minimizing the potential risk of principal loss. The fair value of our securities varies from period to period due to changes in interest rates, in the performance of the underlying collateral and in the credit performance of the underlying issuer, among other factors. The Company does not intend to sell the securities that have an unrealized loss shown in the table above, and it is not more likely than not that the Company will be required to sell a security before recovery of its amortized costs basis, which may be maturity. The Company recognizes the credit component of other-than-temporary impairments of debt securities in “Other Income” and the noncredit component in “Other comprehensive income (loss)” for those securities that we do not intend to sell and for which it is not more likely than not that we will be required to sell before recovery. During fiscal 2017 and the 13-week period ended March 31, 2018, the Company did not record any material impairment charges on its outstanding securities. The amortized cost and fair value of the securities at an unrealized loss position at March 31, 2018 were $1,466,270 and $1,424,047 respectively. Approximately 82% of securities in our portfolio were at an unrealized loss position at March 31, 2018. We have the ability to hold these securities until maturity or their value is recovered. We do not consider these unrealized losses to be other than temporary credit losses because there has been no material deterioration in credit quality and no change in the cash flows of the underlying securities. We do not intend to sell the securities and it is not more likely than not that we will be required to sell the securities; therefore, no material impairment has been recorded in the accompanying condensed consolidated statement of income. The cost of securities sold is based on the specific identification method. The following tables display additional information regarding gross unrealized losses and fair value by major security type for available-for-sale securities in an unrealized loss position as of March 31, 2018 and December 30, 2017. As of March 31, 2018 Less than 12 Consecutive Months 12 Consecutive Months or Longer Gross Unrealized Losses Fair Value Gross Unrealized Losses Fair Value U.S. Treasury securities $ (202 ) $ 19,748 $ (179 ) $ 6,319 Agency securities (243 ) 16,022 (913 ) 25,723 Mortgage-backed securities (711 ) 17,631 (6,914 ) 140,289 Corporate securities (11,562 ) 538,556 (15,555 ) 341,137 Municipal securities (1,786 ) 139,591 (1,371 ) 40,649 Other (2,784 ) 136,448 (3 ) 1,934 Total $ (17,288 ) $ 867,996 $ (24,935 ) $ 556,051 As of December 30, 2017 Less than 12 Consecutive Months 12 Consecutive Months or Longer Gross Unrealized Losses Fair Value Gross Unrealized Losses Fair Value U.S. Treasury securities $ (111 ) $ 12,966 $ (143 ) $ 6,371 Agency securities (168 ) 16,097 (663 ) 25,972 Mortgage-backed securities (503 ) 19,628 (5,365 ) 153,835 Corporate securities (4,562 ) 439,174 (9,228 ) 347,052 Municipal securities (1,027 ) 125,819 (977 ) 38,167 Other (2,219 ) 136,147 (4 ) 2,579 Total $ (8,590 ) $ 749,831 $ (16,380 ) $ 573,976 The amortized cost and fair value of marketable securities at March 31, 2018, by maturity, are shown below. Amortized Cost Fair Value Due in one year or less $ 168,370 $ 167,745 Due after one year through five years 1,175,500 1,143,859 Due after five years through ten years 160,650 151,195 Due after ten years 14,567 14,131 $ 1,519,087 $ 1,476,930 |
Accumulated Other Comprehensive
Accumulated Other Comprehensive Income | 3 Months Ended |
Mar. 31, 2018 | |
Stockholders' Equity Note [Abstract] | |
Accumulated Other Comprehensive Income | 9. Accumulated Other Comprehensive Income The following provides required disclosure of changes in accumulated other comprehensive income (AOCI) balances by component for the 13-week period ended March 31, 2018: 13-Weeks Ended March 31, 2018 Foreign Currency Net unrealized gains Total Beginning Balance $ 79,292 $ (22,864 ) $ 56,428 Other comprehensive income before reclassification, net of income tax benefit of $2,416 23,500 (14,856 ) 8,644 Amounts reclassified from accumulated other comprehensive income — (178 ) (178 ) Net current-period other comprehensive income 23,500 (15,034 ) 8,466 Reclassification of tax effects due to adoption of ASU 2018-02 — (452 ) (452 ) Ending Balance $ 102,792 $ (38,350 ) $ 64,442 The following provides required disclosure of reporting reclassifications out of AOCI for the 13-week period ended March 31, 2018: 13-Weeks Ended March 31, 2018 Details About Accumulated Amount Reclassified Affected Line Item in the Unrealized gains (losses) on available-for-sale securities $ (193 ) Other income (expense) 371 Income tax benefit (provision) $ 178 Net of tax |
Revenue
Revenue | 3 Months Ended |
Mar. 31, 2018 | |
Revenue | |
Revenue | 10. Revenue In order to further depict how the nature, amount, timing and uncertainty of our revenue and cash flows are affected by economic factors, we disaggregate revenue (or “net sales”) by major product category, geographic region, and pattern of recognition. The Company has identified six major product categories – aviation, marine, outdoor, fitness, auto PND, and auto OEM. Note 4 – Segment Information contains disaggregated revenue information of the aviation, marine, outdoor and fitness major product categories, and auto OEM comprised 37% and 33% of the auto segment revenue presented in Note 4 for the 13-weeks ended March 31, 2018, and April 1, 2017, respectively. Auto PND comprised of 63% and 67% of the auto segment revenue presented in Note 4 for the 13-weeks ended March 31, 2018 and April 1, 2017, respectively. Disaggregated revenue by geographic region (Americas, APAC, and EMEA) is also presented in Note 4. A large majority of the Company’s sales are recognized on a point in time basis, usually once the product is shipped and title and risk of loss have transferred to the customer. Sales recognized over a period of time are primarily within the auto segment and relate to performance obligations that are satisfied over the life of the product or contractual service period. Revenue disaggregated by the timing of transfer of the goods or services is presented in the table below: 13-Weeks Ended March 31, 2018 April 1, 2017 Point in time $ 671,263 $ 599,745 Over time 39,609 41,765 Net sales $ 710,872 $ 641,510 Transaction price and costs associated with the Company’s unsatisfied performance obligations are reflected as deferred revenue and deferred costs, respectively, on the Company’s Condensed Consolidated Balance Sheets. Such amounts are recognized ratably over the applicable service period or estimated useful life. Changes in deferred revenue and costs during the 13-weeks ended March 31, 2018 are presented below: 13-Weeks Ended March 31, 2018 Deferred Revenue (1) Deferred Costs (2) Balance, beginning of period $ 190,200 $ 63,554 Deferrals in period 31,291 7,840 Recognition of deferrals in period (39,609 ) (9,639 ) Balance, end of period $ 181,882 $ 61,755 (1) (2) Of the $39,609 deferred revenue recognized in the 13-weeks ended March 31, 2018, $32,515 was deferred as of the beginning of the period. Approximately two-thirds of the $181,882 of deferred revenue at the end of the period, March 31, 2018, is recognized ratably over a period of three years or less. |
Recently Issued Accounting Pron
Recently Issued Accounting Pronouncements Not Yet Adopted | 3 Months Ended |
Mar. 31, 2018 | |
Accounting Changes and Error Corrections [Abstract] | |
Recently Issued Accounting Pronouncements Not Yet Adopted | 11. Recently Issued Accounting Pronouncements Not Yet Adopted Leases In February 2016, the FASB issued Accounting Standards Update No. 2016-02, Leases (Topic 842) (“ASU 2016-02”), which sets out the principles for the recognition, measurement, presentation and disclosure of leases for both lessees and lessors. ASU 2016-02 requires lessees to present a right-of-use asset and a corresponding lease liability on the balance sheet. Lessor accounting is substantially unchanged compared to the current accounting guidance. ASU 2016-02 is effective for fiscal years, and interim periods within those years, beginning after December 15, 2018. Early adoption is permitted. The Company is currently evaluating the impact of adopting the new standard on its consolidated financial statements. The Company does not plan to early adopt the new standard, and therefore will adopt in the Company’s fiscal year ending December 28, 2019. Receivables – Nonrefundable Fees and Other Costs In March 2017, the FASB issued Accounting Standards Update No. 2017-08, Receivables – Nonrefundable Fees and Other Costs (Topic 310-20): Premium Amortization on Purchased Callable Debt Securities (“ASU 2017-08”), which shortens the amortization period for certain callable debt securities held at a premium, requiring the premium to be amortized to the earliest call date. Callable debt securities held at a discount continue to be amortized to maturity. ASU 2017-08 is effective for fiscal years, and interim periods within those years, beginning after December 15, 2019. Early adoption is permitted. The Company is currently evaluating the impact of adopting the new standard on its consolidated financial statements. |
Accounting Policies (Policies)
Accounting Policies (Policies) | 3 Months Ended |
Mar. 31, 2018 | |
Accounting Policies [Abstract] | |
Basis of Presentation | Basis of Presentation The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with generally accepted accounting principles for interim financial information and with the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by generally accepted accounting principles for complete financial statements. In the opinion of management, all adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation have been included. Additionally, the condensed consolidated financial statements should be read in conjunction with Item 2 of Management's Discussion and Analysis of Financial Condition and Results of Operations, included in this Form 10-Q. Operating results for the 13-week period ended March 31, 2018 are not necessarily indicative of the results that may be expected for the year ending December 29, 2018. The condensed consolidated balance sheet at December 30, 2017 has been derived from the audited financial statements at that date but does not include all of the information and footnotes required by generally accepted accounting principles for complete financial statements. For further information, refer to the consolidated financial statements and footnotes thereto included in the Company’s Annual Report on Form 10-K for the year ended December 30, 2017. The Company’s fiscal year is based on a 52-53 week period ending on the last Saturday of the calendar year. Therefore, the financial results of certain 53-week fiscal years, and the associated 14-week quarters, will not be exactly comparable to the prior and subsequent 52-week fiscal years and the associated 13-week quarters. The quarters ended March 31, 2018 and April 1, 2017 both contain operating results for 13 weeks. As previously announced and discussed below within the “ Recently Adopted Accounting Standards , |
Recently Adopted Accounting Standards | Recently Adopted Accounting Standards Revenue from Contracts with Customers In May 2014, the FASB issued ASU No. 2014-09, Revenue from Contracts with Customers (Topic 606) (“ASU 2014-09”), which supersedes previous revenue recognition guidance. The FASB issued several updates amending or relating to ASU 2014-09 (collectively, the “new revenue standard”). The Company has adopted the new revenue standard effective in the 13-week period ending March 31, 2018 using the full retrospective method, which requires the Company to restate each prior reporting period presented in future financial statement issuances. The impacts of the new revenue standard relate to our accounting for certain arrangements within the auto segment. A portion of the Company’s auto segment contracts have historically been accounted for under Accounting Standards Codification (ASC) Topic 985-605 Software-Revenue Recognition (Topic 985-605). Under Topic 985-605, the Company deferred revenue and associated costs of all elements of multiple-element software arrangements if vendor-specific objective evidence of fair value (VSOE) could not be established for an undelivered element (e.g. map updates). In applying the new revenue standard to certain contracts that include both software licenses and map updates, we will recognize the portion of revenue and costs related to the software license at the time of delivery rather than ratably over the map update period. Additionally, for certain multiple-element arrangements within the Company’s auto segment, the Company’s policy has been to allocate consideration to traffic services and recognize the revenue and associated cost of royalties ratably over the estimated life of the underlying product. Under the new revenue standard, we will recognize revenue and associated costs of royalties related to certain traffic services at the time of hardware and/or software delivery. Specifically, the new revenue standard emphasizes the timing of the Company’s performance, and upon delivery of the navigation device and/or software, the Company has fully performed its obligation with respect to the design and production of the product to receive and interpret the broadcast traffic signal for the benefit of the end user. The changes in accounting policy described above collectively result in reductions to deferred costs (asset) and deferred revenue (liability) balances, and accelerate the recognition of revenues and deferred costs in the auto segment going forward. Summarized financial information depicting the impact of the new revenue standard is presented below. The Company’s historical net cash flows provided by or used in operating, investing, and financing activities are not impacted by adoption of the new revenue standard. 13-Weeks Ended April 1, 2017 As reported Restated (1) Impact Net sales $ 638,546 $ 641,510 $ 2,964 Gross profit 372,123 372,806 683 Operating income 116,345 117,028 683 Income tax (benefit) (150,120 ) (150,029 ) 91 Net income $ 237,812 $ 238,404 $ 592 Diluted net income per share $ 1.26 $ 1.26 $ — (1) The Restated results presented above are restated under ASC Topic 606. Amounts related to the income tax effect of the new standard that were previously disclosed as the anticipated adoption impact in our press release attached as Exhibit 99.1 to our Current Report on Form 8-K filed with the Securities and Exchange Commission (SEC) on February 21, 2018 have been revised in this Note by immaterial amounts in connection with our adoption of ASC Topic 606. December 30, 2017 December 31, 2016 As reported Restated (2) Impact As reported Restated (2) Impact Current assets: Deferred costs $ 48,312 $ 30,525 $ (17,787 ) $ 47,395 $ 34,665 $ (12,730 ) Total current assets 2,363,925 2,346,138 (17,787 ) 2,263,016 2,250,286 (12,730 ) Deferred income taxes 199,343 195,981 (3,361 ) 110,293 107,655 (2,638 ) Noncurrent deferred costs 73,851 33,029 (40,822 ) 56,151 30,934 (25,217 ) Total assets $ 5,010,260 $ 4,948,289 $ (61,971 ) $ 4,525,133 $ 4,484,549 $ (40,584 ) Current liabilities: Deferred revenue 139,681 103,140 (36,541 ) 146,564 118,496 (28,068 ) Total current liabilities 828,656 792,115 (36,541 ) 782,735 754,667 (28,068 ) Deferred income taxes 75,215 76,612 1,396 61,220 62,617 1,397 Non-current deferred revenue 163,840 87,060 (76,780 ) 140,407 91,238 (49,169 ) Retained earnings 2,368,874 2,418,444 49,570 2,056,702 2,092,221 35,519 Accumulated other comprehensive income 56,045 56,428 382 (36,761 ) (37,024 ) (263 ) Total stockholders' equity 3,802,466 3,852,419 49,954 3,418,003 3,453,259 35,256 Total liabilities and stockholders’ equity $ 5,010,260 $ 4,948,289 $ (61,971 ) $ 4,525,133 $ 4,484,549 $ (40,584 ) 52-Weeks Ended December 30, 2017 53-Weeks Ended December 31, 2016 As reported Restated (2) Impact As reported Restated (2) Impact Net sales $ 3,087,004 $ 3,121,560 $ 34,556 $ 3,018,665 $ 3,045,797 $ 27,132 Gross profit 1,783,164 1,797,941 14,777 1,679,570 1,688,525 8,955 Operating income 668,860 683,637 14,777 623,909 632,864 8,955 Income tax (benefit) provision (12,661 ) (11,936 ) 725 118,856 120,901 2,045 Net income $ 694,955 $ 709,007 $ 14,052 $ 510,814 $ 517,724 $ 6,910 Diluted net income per share $ 3.68 $ 3.76 $ 0.08 $ 2.70 $ 2.73 $ 0.03 (2) The Restated results presented above are restated under ASC Topic 606. Amounts related to the income tax effect of the new standard that were previously disclosed as the anticipated adoption impact in Note 2, Summary of Significant Accounting Policies, in the notes to the consolidated financial statements of our fiscal 2017 Annual Report on Form 10-K filed with the SEC on February 21, 2018 have been revised in this Note by immaterial amounts in connection with our adoption of ASC Topic 606. Financial Instruments – Recognition, Measurement, Presentation, and Disclosure In January 2016, the FASB issued Accounting Standards Update No. 2016-01, Financial Instruments—Overall (Subtopic 825-10): Recognition and Measurement of Financial Assets and Financial Liabilities (“ASU 2016-01”). The standard addresses certain aspects of recognition, measurement, presentation, and disclosure of financial instruments. The Company has adopted the new standard effective in the 13-week period ending March 31, 2018. The adoption did not have a material impact on the Company’s financial position or results of operations. Statement of Cash Flows In August 2016, the FASB issued Accounting Standards Update No. 2016-15, Statement of Cash Flows (Topic 230): Classification of Certain Cash Receipts and Cash Payments (“ASU 2016-15”), which adds or clarifies guidance on the classification of certain cash receipts and payments in the statement of cash flows. The standard addresses eight specific cash flow issues with the objective of reducing diversity in practice. In November 2016, the FASB issued Accounting Standards Update No. 2016-18, Statement of Cash Flows (Topic 230): Restricted Cash (“ASU 2016-18”), which requires restricted cash and restricted cash equivalents to be included with cash and cash equivalents when reconciling changes in the total amounts within the statement of cash flows. The Company has adopted the new standards effective in the 13-week period ending March 31, 2018. The adoption of ASU 2016-15 did not have a material impact to the Company’s statements of cash flows. The amendments of ASU 2016-18 were applied using a retrospective transition method, resulting in immaterial changes to the presentation of the Company’s statements of cash flows. The total of cash and cash equivalents and restricted cash balances presented on the condensed consolidated balance sheet reconciles to the total cash, cash equivalents, and restricted cash shown in the condensed consolidated statements of cash flows. Income Taxes In October 2016, the FASB issued Accounting Standards Update No. 2016-16, Income Taxes (Topic 740): Intra-Entity Transfers of Assets Other than Inventory (“ASU 2016-16”), which requires recognition of the income tax consequences of an intra-entity transfer of an asset other than inventory when the transfer occurs. The Company has adopted the new standard effective beginning in the 13-week period ending March 31, 2018, which resulted in a reclassification of $1,700 of certain prepaid tax balances in a cumulative effect to retained earnings as of the date of adoption. Income Statement – Reporting Comprehensive Income In February 2018, the FASB issued Accounting Standards Update No. 2018-02, Income Statement – Reporting Comprehensive Income (Topic 220): Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income (“ASU 2018-02”), which allows for stranded tax effects in accumulated other comprehensive income resulting from the U.S. Tax Cuts and Jobs Act to be reclassified to retained earnings. The Company has elected to early adopt the new standard effective in the 13-week period ending March 31, 2018, resulting in reclassification of approximately $450 from accumulated other comprehensive income into retained earnings. The tax effects that were reclassified only relate to amounts resulting from the U.S. Tax Cuts and Jobs Act. |
Revenue Recognition | Revenue Recognition The Company recognizes revenue upon the transfer of control of promised products or services to the customer in an amount that depicts the consideration the Company expects to be entitled to for the related products or services. For the large majority of the Company’s sales, transfer of control occurs once product has shipped and title and risk of loss have transferred to the customer. The Company offers certain tangible products with ongoing services promised over a period of time, typically the useful life of the related tangible product. When we have identified such services as both capable of being distinct and separately identifiable from the related tangible product, the associated revenue allocated to such services is recognized over time. The Company generally does not offer specified or unspecified upgrade rights to its customers in connection with software sales. The Company records revenue net of sales tax and variable consideration such as trade discounts and customer returns. Payment is due typically within 90 days or less of shipment of product, or upon the grant of a given software license (as applicable). The Company records estimated reductions to revenue in the form of variable consideration for customer sales programs, returns and incentive offerings including rebates, price protection (product discounts offered to retailers to assist in clearing older products from their inventories in advance of new product releases), promotions and other volume-based incentives. The reductions to revenue are based on estimates and judgments using historical experience and expectation of future conditions. Changes in these estimates could negatively affect the Company’s operating results. These incentives are reviewed periodically and, with the exceptions of price protection and certain other promotions, typically accrued for on a percentage of sales basis. |
Deferred Revenues and Costs | Deferred Revenues and Costs Deferred revenue consists primarily of the transaction price allocated to performance obligations that are recognized over a period of time basis as discussed in the Revenue Recognition The Company applies a practical expedient, as permitted within ASC 340, to expense as incurred the incremental costs to obtain a contract when the amortization period of the asset that would have otherwise been recognized is one year or less. |
Shipping and Handling Costs | Shipping and Handling Costs Shipping and handling activities are typically performed before the customer obtains control of the good, and the related costs are therefore expensed as incurred. Shipping and handling costs are included in cost of goods sold in the accompanying condensed consolidated financial statements. |
Accounting Policies (Tables)
Accounting Policies (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
Accounting Policies [Abstract] | |
Schedule of summarized financial information depicting the impact of the new revenue standard | The Company’s historical net cash flows provided by or used in operating, investing, and financing activities are not impacted by adoption of the new revenue standard. 13-Weeks Ended April 1, 2017 As reported Restated (1) Impact Net sales $ 638,546 $ 641,510 $ 2,964 Gross profit 372,123 372,806 683 Operating income 116,345 117,028 683 Income tax (benefit) (150,120 ) (150,029 ) 91 Net income $ 237,812 $ 238,404 $ 592 Diluted net income per share $ 1.26 $ 1.26 $ — (1) The Restated results presented above are restated under ASC Topic 606. Amounts related to the income tax effect of the new standard that were previously disclosed as the anticipated adoption impact in our press release attached as Exhibit 99.1 to our Current Report on Form 8-K filed with the Securities and Exchange Commission (SEC) on February 21, 2018 have been revised in this Note by immaterial amounts in connection with our adoption of ASC Topic 606. December 30, 2017 December 31, 2016 As reported Restated (2) Impact As reported Restated (2) Impact Current assets: Deferred costs $ 48,312 $ 30,525 $ (17,787 ) $ 47,395 $ 34,665 $ (12,730 ) Total current assets 2,363,925 2,346,138 (17,787 ) 2,263,016 2,250,286 (12,730 ) Deferred income taxes 199,343 195,981 (3,361 ) 110,293 107,655 (2,638 ) Noncurrent deferred costs 73,851 33,029 (40,822 ) 56,151 30,934 (25,217 ) Total assets $ 5,010,260 $ 4,948,289 $ (61,971 ) $ 4,525,133 $ 4,484,549 $ (40,584 ) Current liabilities: Deferred revenue 139,681 103,140 (36,541 ) 146,564 118,496 (28,068 ) Total current liabilities 828,656 792,115 (36,541 ) 782,735 754,667 (28,068 ) Deferred income taxes 75,215 76,612 1,396 61,220 62,617 1,397 Non-current deferred revenue 163,840 87,060 (76,780 ) 140,407 91,238 (49,169 ) Retained earnings 2,368,874 2,418,444 49,570 2,056,702 2,092,221 35,519 Accumulated other comprehensive income 56,045 56,428 382 (36,761 ) (37,024 ) (263 ) Total stockholders' equity 3,802,466 3,852,419 49,954 3,418,003 3,453,259 35,256 Total liabilities and stockholders’ equity $ 5,010,260 $ 4,948,289 $ (61,971 ) $ 4,525,133 $ 4,484,549 $ (40,584 ) 52-Weeks Ended December 30, 2017 53-Weeks Ended December 31, 2016 As reported Restated (2) Impact As reported Restated (2) Impact Net sales $ 3,087,004 $ 3,121,560 $ 34,556 $ 3,018,665 $ 3,045,797 $ 27,132 Gross profit 1,783,164 1,797,941 14,777 1,679,570 1,688,525 8,955 Operating income 668,860 683,637 14,777 623,909 632,864 8,955 Income tax (benefit) provision (12,661 ) (11,936 ) 725 118,856 120,901 2,045 Net income $ 694,955 $ 709,007 $ 14,052 $ 510,814 $ 517,724 $ 6,910 Diluted net income per share $ 3.68 $ 3.76 $ 0.08 $ 2.70 $ 2.73 $ 0.03 (2) The Restated results presented above are restated under ASC Topic 606. Amounts related to the income tax effect of the new standard that were previously disclosed as the anticipated adoption impact in Note 2, Summary of Significant Accounting Policies, in the notes to the consolidated financial statements of our fiscal 2017 Annual Report on Form 10-K filed with the SEC on February 21, 2018 have been revised in this Note by immaterial amounts in connection with our adoption of ASC Topic 606. |
Inventories (Tables)
Inventories (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
Inventory Disclosure [Abstract] | |
Schedule of inventories | The components of inventories consist of the following: March 31, December 30, Raw materials $ 190,213 $ 179,659 Work-in-process 84,431 75,754 Finished goods 272,768 262,231 Inventory, net of reserves $ 547,412 $ 517,644 |
Earnings Per Share (Tables)
Earnings Per Share (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
Net income per share: | |
Schedule of computation of basic and diluted net income per share | The following table sets forth the computation of basic and diluted net income per share: 13-Weeks Ended Mar 31, Apr 1, Numerator: Numerator for basic and diluted net income per share - net income $ 129,374 $ 238,404 Denominator: Denominator for basic net income per share – weighted-average common shares 188,322 188,333 Effect of dilutive securities – stock options, stock appreciation rights and restricted stock units 970 698 Denominator for diluted net income per share – adjusted weighted-average common shares 189,292 189,031 Basic net income per share $ 0.69 $ 1.27 Diluted net income per share $ 0.68 $ 1.26 |
Segment Information (Tables)
Segment Information (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
Segment Reporting [Abstract] | |
Schedule of net sales, gross profit, and operating income | Net sales (“revenue”), gross profit, and operating income for each of the Company’s reportable segments are presented below. Reportable Segments Outdoor Fitness Marine Auto Aviation Total 13-Weeks Ended March 31, 2018 Net sales $ 144,258 $ 166,035 $ 113,554 $ 141,312 $ 145,713 $ 710,872 Gross profit 93,285 96,601 66,683 61,012 108,954 426,535 Operating income 43,822 33,374 13,131 3,468 48,407 142,202 13-Weeks Ended April 1, 2017 Net sales $ 115,875 $ 137,831 $ 104,445 $ 160,488 $ 122,871 $ 641,510 Gross profit 73,469 77,741 59,747 70,616 91,233 372,806 Operating income 34,451 18,472 18,145 7,352 38,608 117,028 |
Schedule of net sales and property and equipment, net by geographic area | Note that APAC includes Asia Pacific and Australian Continent and EMEA includes Europe, the Middle East and Africa: Americas APAC EMEA Total March 31, 2018 Net sales to external customers $ 345,975 $ 118,985 $ 245,912 $ 710,872 Property and equipment, net $ 388,531 $ 176,245 $ 40,037 $ 604,813 April 1, 2017 Net sales to external customers $ 324,630 $ 91,545 $ 225,335 $ 641,510 Property and equipment, net $ 312,630 $ 152,804 $ 38,406 $ 503,840 |
Warranty Reserves (Tables)
Warranty Reserves (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
Product Warranties Disclosures [Abstract] | |
Schedule of changes in the aggregate warranty reserve | The following reconciliation provides an illustration of changes in the aggregate warranty reserve. 13-Weeks Ended March 31, April 1, Balance - beginning of period $ 36,827 $ 37,233 Accrual for products sold during the period 10,012 8,200 Expenditures (11,417 ) (11,006 ) Balance - end of period $ 35,422 $ 34,427 |
Marketable Securities (Tables)
Marketable Securities (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
Marketable Securities [Abstract] | |
Schedule of available-for-sale securities | Available-for-sale securities measured at fair value on a recurring basis are summarized below: Fair Value Measurements as of March 31, 2018 Total Level 1 Level 2 Level 3 U.S. Treasury securities $ 29,058 $ — $ 29,058 $ — Agency securities 41,744 — 41,744 — Mortgage-backed securities 158,839 — 158,839 — Corporate securities 892,848 — 892,848 — Municipal securities 185,586 — 185,586 — Other 168,855 — 168,855 — Total $ 1,476,930 $ — $ 1,476,930 $ — Fair Value Measurements as of December 30, 2017 Total Level 1 Level 2 Level 3 U.S. Treasury securities $ 19,337 $ — $ 19,337 $ — Agency securities 43,361 — 43,361 — Mortgage-backed securities 174,615 — 174,615 — Corporate securities 816,793 — 816,793 — Municipal securities 186,105 — 186,105 — Other 181,509 — 181,509 — Total $ 1,421,720 $ — $ 1,421,720 $ — |
Schedule of marketable securities classified as available-for-sale securities | Marketable securities classified as available-for-sale securities are summarized below: Available-For-Sale Securities as Amortized Cost Gross Unrealized Gains Gross Unrealized Losses Fair Value U.S. Treasury securities $ 29,439 $ — $ (381 ) $ 29,058 Agency securities 42,901 — (1,156 ) 41,745 Mortgage-backed securities 166,458 6 (7,625 ) 158,839 Corporate securities 919,920 45 (27,117 ) 892,848 Municipal securities 188,728 14 (3,157 ) 185,585 Other 171,641 1 (2,787 ) 168,855 Total $ 1,519,087 $ 66 $ (42,223 ) $ 1,476,930 Available-For-Sale Securities as of December 30, 2017 Amortized Cost Gross Unrealized Gains Gross Unrealized Losses Fair Value U.S. Treasury securities $ 19,591 $ — $ (254 ) $ 19,337 Agency securities 44,191 1 (831 ) 43,361 Mortgage-backed securities 180,470 13 (5,868 ) 174,615 Corporate securities 830,447 136 (13,790 ) 816,793 Municipal securities 187,999 110 (2,004 ) 186,105 Other 183,730 2 (2,223 ) 181,509 Total $ 1,446,428 $ 262 $ (24,970 ) $ 1,421,720 |
Schedule of gross unrealized losses and fair value by major security type | The following tables display additional information regarding gross unrealized losses and fair value by major security type for available-for-sale securities in an unrealized loss position as of March 31, 2018 and December 30, 2017. As of March 31, 2018 Less than 12 Consecutive Months 12 Consecutive Months or Longer Gross Unrealized Losses Fair Value Gross Unrealized Losses Fair Value U.S. Treasury securities $ (202 ) $ 19,748 $ (179 ) $ 6,319 Agency securities (243 ) 16,022 (913 ) 25,723 Mortgage-backed securities (711 ) 17,631 (6,914 ) 140,289 Corporate securities (11,562 ) 538,556 (15,555 ) 341,137 Municipal securities (1,786 ) 139,591 (1,371 ) 40,649 Other (2,784 ) 136,448 (3 ) 1,934 Total $ (17,288 ) $ 867,996 $ (24,935 ) $ 556,051 As of December 30, 2017 Less than 12 Consecutive Months 12 Consecutive Months or Longer Gross Unrealized Losses Fair Value Gross Unrealized Losses Fair Value U.S. Treasury securities $ (111 ) $ 12,966 $ (143 ) $ 6,371 Agency securities (168 ) 16,097 (663 ) 25,972 Mortgage-backed securities (503 ) 19,628 (5,365 ) 153,835 Corporate securities (4,562 ) 439,174 (9,228 ) 347,052 Municipal securities (1,027 ) 125,819 (977 ) 38,167 Other (2,219 ) 136,147 (4 ) 2,579 Total $ (8,590 ) $ 749,831 $ (16,380 ) $ 573,976 |
Schedule of amortized cost and estimated fair value of marketable securities by contractual maturity | The amortized cost and fair value of marketable securities at March 31, 2018, by maturity, are shown below. Amortized Cost Fair Value Due in one year or less $ 168,370 $ 167,745 Due after one year through five years 1,175,500 1,143,859 Due after five years through ten years 160,650 151,195 Due after ten years 14,567 14,131 $ 1,519,087 $ 1,476,930 |
Accumulated Other Comprehensi25
Accumulated Other Comprehensive Income (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
Stockholders' Equity Note [Abstract] | |
Schedule of changes in accumulated other comprehensive income (AOCI) | The following provides required disclosure of changes in accumulated other comprehensive income (AOCI) balances by component for the 13-week period ended March 31, 2018: 13-Weeks Ended March 31, 2018 Foreign Currency Net unrealized gains Total Beginning Balance $ 79,292 $ (22,864 ) $ 56,428 Other comprehensive income before reclassification, net of income tax benefit of $2,416 23,500 (14,856 ) 8,644 Amounts reclassified from accumulated other comprehensive income — (178 ) (178 ) Net current-period other comprehensive income 23,500 (15,034 ) 8,466 Reclassification of tax effects due to adoption of ASU 2018-02 0 (452 ) (452 ) Ending Balance $ 102,792 $ (38,350 ) $ 64,442 |
Schedule of reporting reclassifications out of AOCI | The following provides required disclosure of reporting reclassifications out of AOCI for the 13-week period ended March 31, 2018: 13-Weeks Ended March 31, 2018 Details About Accumulated Amount Reclassified Affected Line Item in the Unrealized gains (losses) on available-for-sale securities $ (193 ) Other income (expense) 371 Income tax benefit (provision) $ 178 Net of tax |
Revenue (Tables)
Revenue (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
Revenue | |
Schedule of revenue disaggregated | Revenue disaggregated by the timing of transfer of the goods or services is presented in the table below: 13-Weeks Ended March 31, 2018 April 1, 2017 Point in time $ 671,263 $ 599,745 Over time 39,609 41,765 Net sales $ 710,872 $ 641,510 |
Schedule of deferred revenue and costs | Changes in deferred revenue and costs during the 13-weeks ended March 31, 2018 are presented below: 13-Weeks Ended March 31, 2018 Deferred Revenue (1) Deferred Costs (2) Balance, beginning of period $ 190,200 $ 63,554 Deferrals in period 31,291 7,840 Recognition of deferrals in period (39,609 ) (9,639 ) Balance, end of period $ 181,882 $ 61,755 (1) (2) |
Summary of Significant Accounti
Summary of Significant Accounting Policies (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 12 Months Ended | ||||||
Mar. 31, 2018 | Apr. 01, 2017 | Dec. 30, 2017 | Dec. 31, 2016 | |||||
Net sales | $ 710,872 | $ 641,510 | ||||||
Gross profit | 426,535 | 372,806 | ||||||
Operating income | 142,202 | 117,028 | ||||||
Income tax (benefit) provision | 24,606 | (150,029) | ||||||
Net income | $ 129,374 | $ 238,404 | ||||||
Diluted net income per share (in dollars per share) | $ 0.68 | $ 1.26 | ||||||
Current assets: | ||||||||
Deferred costs | $ 29,327 | $ 30,525 | ||||||
Total current assets | 2,191,283 | 2,346,138 | ||||||
Noncurrent deferred income tax | 199,090 | 195,981 | ||||||
Noncurrent deferred costs | 32,428 | 33,029 | ||||||
Total assets | 4,855,222 | 4,948,289 | ||||||
Current liabilities: | ||||||||
Deferred revenue | 98,660 | 103,140 | ||||||
Total current liabilities | 557,843 | 792,115 | ||||||
Deferred income taxes | 74,714 | 76,612 | ||||||
Non-current deferred revenue | 83,222 | 87,060 | ||||||
Retained earnings | 2,546,400 | 2,418,444 | ||||||
Accumulated other comprehensive income (loss) | 64,442 | 56,428 | ||||||
Total stockholders' equity | 3,997,193 | 3,852,419 | ||||||
Total liabilities and stockholders' equity | $ 4,855,222 | 4,948,289 | ||||||
As Reported [Member] | ||||||||
Net sales | $ 638,546 | 3,087,004 | $ 3,018,665 | |||||
Gross profit | 372,123 | 1,783,164 | 1,679,570 | |||||
Operating income | 116,345 | 668,860 | 623,909 | |||||
Income tax (benefit) provision | (150,120) | (12,661) | 118,856 | |||||
Net income | $ 237,812 | $ 694,955 | $ 510,814 | |||||
Diluted net income per share (in dollars per share) | $ 1.26 | $ 3.68 | $ 2.7 | |||||
Current assets: | ||||||||
Deferred costs | $ 48,312 | $ 47,395 | ||||||
Total current assets | 2,363,925 | 2,263,016 | ||||||
Noncurrent deferred income tax | 199,343 | 110,293 | ||||||
Noncurrent deferred costs | 73,851 | 56,151 | ||||||
Total assets | 5,010,260 | 4,525,133 | ||||||
Current liabilities: | ||||||||
Deferred revenue | 139,681 | 146,564 | ||||||
Total current liabilities | 828,656 | 782,735 | ||||||
Deferred income taxes | 75,215 | 61,220 | ||||||
Non-current deferred revenue | 163,840 | 140,407 | ||||||
Retained earnings | 2,368,874 | 2,056,702 | ||||||
Accumulated other comprehensive income (loss) | 56,045 | (36,761) | ||||||
Total stockholders' equity | 3,802,466 | 3,418,003 | ||||||
Total liabilities and stockholders' equity | 5,010,260 | 4,525,133 | ||||||
Restatement [Member] | ||||||||
Net sales | $ 641,510 | [1] | 3,121,560 | [2] | 3,045,797 | [2] | ||
Gross profit | 372,806 | [1] | 1,797,941 | [2] | 1,688,525 | [2] | ||
Operating income | 117,028 | [1] | 683,637 | [2] | 632,864 | [2] | ||
Income tax (benefit) provision | (150,029) | [1] | (11,936) | [2] | 120,901 | [2] | ||
Net income | $ 238,404 | [1] | $ 709,007 | [2] | $ 517,724 | [2] | ||
Diluted net income per share (in dollars per share) | $ 1.26 | [1] | $ 3.76 | [2] | $ 2.73 | [2] | ||
Current assets: | ||||||||
Deferred costs | [2] | $ 30,525 | $ 34,665 | |||||
Total current assets | [2] | 2,346,138 | 2,250,286 | |||||
Noncurrent deferred income tax | [2] | 195,981 | 107,655 | |||||
Noncurrent deferred costs | [2] | 33,029 | 30,934 | |||||
Total assets | [2] | 4,948,289 | 4,484,549 | |||||
Current liabilities: | ||||||||
Deferred revenue | [2] | 103,140 | 118,496 | |||||
Total current liabilities | [2] | 792,115 | 754,667 | |||||
Deferred income taxes | [2] | 76,612 | 62,617 | |||||
Non-current deferred revenue | [2] | 87,060 | 91,238 | |||||
Retained earnings | [2] | 2,418,444 | 2,092,221 | |||||
Accumulated other comprehensive income (loss) | [2] | 56,428 | (37,024) | |||||
Total stockholders' equity | [2] | 3,852,419 | 3,453,259 | |||||
Total liabilities and stockholders' equity | [2] | 4,948,289 | 4,484,549 | |||||
Impact [Member] | ||||||||
Net sales | $ 2,964 | 34,556 | 27,132 | |||||
Gross profit | 683 | 14,777 | 8,955 | |||||
Operating income | 683 | 14,777 | 8,955 | |||||
Income tax (benefit) provision | 91 | 725 | 2,045 | |||||
Net income | $ 592 | $ 14,052 | $ 6,910 | |||||
Diluted net income per share (in dollars per share) | $ 0.08 | $ 0.03 | ||||||
Current assets: | ||||||||
Deferred costs | $ (17,787) | $ (12,730) | ||||||
Total current assets | (17,787) | (12,730) | ||||||
Noncurrent deferred income tax | (3,361) | (2,638) | ||||||
Noncurrent deferred costs | (40,822) | (25,217) | ||||||
Total assets | (61,971) | (40,584) | ||||||
Current liabilities: | ||||||||
Deferred revenue | (36,541) | (28,068) | ||||||
Total current liabilities | (36,541) | (28,068) | ||||||
Deferred income taxes | 1,396 | 1,397 | ||||||
Non-current deferred revenue | (76,780) | (49,169) | ||||||
Retained earnings | 49,570 | 35,519 | ||||||
Accumulated other comprehensive income (loss) | 382 | (263) | ||||||
Total stockholders' equity | 49,954 | 35,256 | ||||||
Total liabilities and stockholders' equity | $ (61,971) | $ (40,584) | ||||||
[1] | The Restated results presented above are restated under ASC Topic 606. Amounts related to the income tax effect of the new standard that were previously disclosed as the anticipated adoption impact in our press release attached as Exhibit 99.1 to our Current Report on Form 8-K filed with the Securities and Exchange Commission (SEC) on February 21, 2018 have been revised in this Note by immaterial amounts in connection with our adoption of ASC Topic 606. | |||||||
[2] | The Restated results presented above are restated under ASC Topic 606. Amounts related to the income tax effect of the new standard that were previously disclosed as the anticipated adoption impact in Note 2, Summary of Significant Accounting Policies, in the notes to the consolidated financial statements of our fiscal 2017 Annual Report on Form 10-K filed with the SEC on February 21, 2018 have been revised in this Note by immaterial amounts in connection with our adoption of ASC Topic 606. |
Inventories (Details)
Inventories (Details) - USD ($) $ in Thousands | Mar. 31, 2018 | Dec. 30, 2017 |
Inventory Disclosure [Abstract] | ||
Raw materials | $ 190,213 | $ 179,659 |
Work-in-process | 84,431 | 75,754 |
Finished goods | 272,768 | 262,231 |
Inventory, net of reserves | $ 547,412 | $ 517,644 |
Earnings Per Share (Details)
Earnings Per Share (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 3 Months Ended | |
Mar. 31, 2018 | Apr. 01, 2017 | |
Numerator: | ||
Numerator for basic and diluted net income per share - net income | $ 129,374 | $ 238,404 |
Denominator: | ||
Denominator for basic net income per share - weighted-average common shares | 188,322 | 188,333 |
Effect of dilutive securities - stock options, stock appreciation rights and restricted stock units | 970 | 698 |
Denominator for diluted net income per share - adjusted weighted-average common shares | 189,292 | 189,031 |
Basic net income per share (in dollars per share) | $ 0.69 | $ 1.27 |
Diluted net income per share (in dollars per share) | $ 0.68 | $ 1.26 |
Earnings Per Share (Details Nar
Earnings Per Share (Details Narrative) - shares shares in Thousands | 3 Months Ended | |
Mar. 31, 2018 | Apr. 01, 2017 | |
Net income per share: | ||
Anti-dilutive stock options, stock appreciation rights and restricted stock units | 0 | 2,593 |
Shares issued as a result of exercises and releases of equity awards | 332 | 150 |
Segment Information (Details)
Segment Information (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2018 | Apr. 01, 2017 | |
Net sales | $ 710,872 | $ 641,510 |
Gross profit | 426,535 | 372,806 |
Operating income | 142,202 | 117,028 |
Outdoor [Member] | ||
Net sales | 144,258 | 115,875 |
Gross profit | 93,285 | 73,469 |
Operating income | 43,822 | 34,451 |
Fitness [Member] | ||
Net sales | 166,035 | 137,831 |
Gross profit | 96,601 | 77,741 |
Operating income | 33,374 | 18,472 |
Marine [Member] | ||
Net sales | 113,554 | 104,445 |
Gross profit | 66,683 | 59,747 |
Operating income | 13,131 | 18,145 |
Auto [Member] | ||
Net sales | 141,312 | 160,488 |
Gross profit | 61,012 | 70,616 |
Operating income | 3,468 | 7,352 |
Aviation [Member] | ||
Net sales | 145,713 | 122,871 |
Gross profit | 108,954 | 91,233 |
Operating income | $ 48,407 | $ 38,608 |
Segment Information (Details 1)
Segment Information (Details 1) - USD ($) $ in Thousands | 3 Months Ended | ||
Mar. 31, 2018 | Apr. 01, 2017 | Dec. 30, 2017 | |
Net sales to external customers | $ 710,872 | $ 641,510 | |
Property and equipment, net | 604,813 | 503,840 | $ 595,684 |
Americas [Member] | |||
Net sales to external customers | 345,975 | 324,630 | |
Property and equipment, net | 388,531 | 312,630 | |
APAC [Member] | |||
Net sales to external customers | 118,985 | 91,545 | |
Property and equipment, net | 176,245 | 152,804 | |
EMEA [Member] | |||
Net sales to external customers | 245,912 | 225,335 | |
Property and equipment, net | $ 40,037 | $ 38,406 |
Segment Information (Details Na
Segment Information (Details Narrative) | 3 Months Ended |
Mar. 31, 2018Segment | |
Segment Reporting [Abstract] | |
Number of reportable segments | 5 |
Warranty Reserves (Details)
Warranty Reserves (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2018 | Apr. 01, 2017 | |
Movement in Standard and Extended Product Warranty, Increase (Decrease) [Roll Forward] | ||
Balance - beginning of period | $ 36,827 | $ 37,233 |
Accrual for products sold during the period | 10,012 | 8,200 |
Expenditures | (11,417) | (11,006) |
Balance - end of period | $ 35,422 | $ 34,427 |
Warranty Reserves (Details Narr
Warranty Reserves (Details Narrative) | 3 Months Ended |
Mar. 31, 2018 | |
Minimum [Member] | |
Product warranty term | 1 year |
Maximum [Member] | |
Product warranty term | 3 years |
Commitments and Contingencies (
Commitments and Contingencies (Details Narrative) $ in Thousands | Mar. 31, 2018USD ($) |
Commitments and Contingencies Disclosure [Abstract] | |
Aggregate amount of purchase orders and other commitments | $ 325,200 |
Income Taxes (Details Narrative
Income Taxes (Details Narrative) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2018 | Apr. 01, 2017 | |
Income Tax Disclosure [Abstract] | ||
Income tax expense | $ 24,606 | $ (150,029) |
Income tax benefit | $ 168,755 | |
Effective income tax rate | 16.00% | (169.80%) |
Marketable Securities (Details)
Marketable Securities (Details) - USD ($) $ in Thousands | Mar. 31, 2018 | Dec. 30, 2017 |
Schedule of Available-for-sale Securities [Line Items] | ||
Available-for-sale securities, total | $ 1,476,930 | $ 1,421,720 |
U.S.Treasury Securities [Member] | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Available-for-sale securities, total | 29,058 | 19,337 |
Agency Securities [Member] | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Available-for-sale securities, total | 41,745 | 43,361 |
Mortgage-Backed Securities [Member] | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Available-for-sale securities, total | 158,839 | 174,615 |
Corporate Securities [Member] | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Available-for-sale securities, total | 892,848 | 816,793 |
Municipal Securities [Member] | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Available-for-sale securities, total | 185,585 | 186,105 |
Other [Member] | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Available-for-sale securities, total | 168,855 | 181,509 |
Recurring Basis [Member] | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Available-for-sale securities, total | 1,476,930 | 1,421,720 |
Recurring Basis [Member] | U.S.Treasury Securities [Member] | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Available-for-sale securities, total | 29,058 | 19,337 |
Recurring Basis [Member] | Agency Securities [Member] | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Available-for-sale securities, total | 41,744 | 43,361 |
Recurring Basis [Member] | Mortgage-Backed Securities [Member] | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Available-for-sale securities, total | 158,839 | 174,615 |
Recurring Basis [Member] | Corporate Securities [Member] | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Available-for-sale securities, total | 892,848 | 816,793 |
Recurring Basis [Member] | Municipal Securities [Member] | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Available-for-sale securities, total | 185,586 | 186,105 |
Recurring Basis [Member] | Other [Member] | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Available-for-sale securities, total | 168,855 | 181,509 |
Recurring Basis [Member] | Level 1 [Member] | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Available-for-sale securities, total | ||
Recurring Basis [Member] | Level 1 [Member] | U.S.Treasury Securities [Member] | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Available-for-sale securities, total | ||
Recurring Basis [Member] | Level 1 [Member] | Agency Securities [Member] | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Available-for-sale securities, total | ||
Recurring Basis [Member] | Level 1 [Member] | Mortgage-Backed Securities [Member] | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Available-for-sale securities, total | ||
Recurring Basis [Member] | Level 1 [Member] | Corporate Securities [Member] | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Available-for-sale securities, total | ||
Recurring Basis [Member] | Level 1 [Member] | Municipal Securities [Member] | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Available-for-sale securities, total | ||
Recurring Basis [Member] | Level 1 [Member] | Other [Member] | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Available-for-sale securities, total | ||
Recurring Basis [Member] | Level 2 [Member] | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Available-for-sale securities, total | 1,476,930 | 1,421,720 |
Recurring Basis [Member] | Level 2 [Member] | U.S.Treasury Securities [Member] | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Available-for-sale securities, total | 29,058 | 19,337 |
Recurring Basis [Member] | Level 2 [Member] | Agency Securities [Member] | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Available-for-sale securities, total | 41,744 | 43,361 |
Recurring Basis [Member] | Level 2 [Member] | Mortgage-Backed Securities [Member] | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Available-for-sale securities, total | 158,839 | 174,615 |
Recurring Basis [Member] | Level 2 [Member] | Corporate Securities [Member] | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Available-for-sale securities, total | 892,848 | 816,793 |
Recurring Basis [Member] | Level 2 [Member] | Municipal Securities [Member] | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Available-for-sale securities, total | 185,586 | 186,105 |
Recurring Basis [Member] | Level 2 [Member] | Other [Member] | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Available-for-sale securities, total | 168,855 | 181,509 |
Recurring Basis [Member] | Level 3 [Member] | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Available-for-sale securities, total | ||
Recurring Basis [Member] | Level 3 [Member] | U.S.Treasury Securities [Member] | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Available-for-sale securities, total | ||
Recurring Basis [Member] | Level 3 [Member] | Agency Securities [Member] | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Available-for-sale securities, total | ||
Recurring Basis [Member] | Level 3 [Member] | Mortgage-Backed Securities [Member] | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Available-for-sale securities, total | ||
Recurring Basis [Member] | Level 3 [Member] | Corporate Securities [Member] | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Available-for-sale securities, total | ||
Recurring Basis [Member] | Level 3 [Member] | Municipal Securities [Member] | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Available-for-sale securities, total | ||
Recurring Basis [Member] | Level 3 [Member] | Other [Member] | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Available-for-sale securities, total |
Marketable Securities (Details
Marketable Securities (Details 1) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended |
Mar. 31, 2018 | Dec. 30, 2017 | |
Schedule of Trading Securities and Other Trading Assets [Line Items] | ||
Amortized Cost | $ 1,519,087 | $ 1,446,428 |
Gross Unrealized Gains | 66 | 262 |
Gross Unrealized Losses | (42,223) | 24,970 |
Fair Value | 1,476,930 | 1,421,720 |
U.S.Treasury Securities [Member] | ||
Schedule of Trading Securities and Other Trading Assets [Line Items] | ||
Amortized Cost | 29,439 | 19,591 |
Gross Unrealized Gains | ||
Gross Unrealized Losses | (381) | (254) |
Fair Value | 29,058 | 19,337 |
Agency Securities [Member] | ||
Schedule of Trading Securities and Other Trading Assets [Line Items] | ||
Amortized Cost | 42,901 | 44,191 |
Gross Unrealized Gains | 1 | |
Gross Unrealized Losses | (1,156) | (831) |
Fair Value | 41,745 | 43,361 |
Mortgage-Backed Securities [Member] | ||
Schedule of Trading Securities and Other Trading Assets [Line Items] | ||
Amortized Cost | 166,458 | 180,470 |
Gross Unrealized Gains | 6 | 13 |
Gross Unrealized Losses | (7,625) | (5,868) |
Fair Value | 158,839 | 174,615 |
Corporate Securities [Member] | ||
Schedule of Trading Securities and Other Trading Assets [Line Items] | ||
Amortized Cost | 919,920 | 830,447 |
Gross Unrealized Gains | 45 | 136 |
Gross Unrealized Losses | (27,117) | (13,790) |
Fair Value | 892,848 | 816,793 |
Municipal Securities [Member] | ||
Schedule of Trading Securities and Other Trading Assets [Line Items] | ||
Amortized Cost | 188,728 | 187,999 |
Gross Unrealized Gains | 14 | 110 |
Gross Unrealized Losses | (3,157) | (2,004) |
Fair Value | 185,585 | 186,105 |
Other [Member] | ||
Schedule of Trading Securities and Other Trading Assets [Line Items] | ||
Amortized Cost | 171,641 | 183,730 |
Gross Unrealized Gains | 1 | 2 |
Gross Unrealized Losses | (2,787) | (2,223) |
Fair Value | $ 168,855 | $ 181,509 |
Marketable Securities (Detail40
Marketable Securities (Details 2) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended |
Mar. 31, 2018 | Dec. 30, 2017 | |
Schedule of Available-for-sale Securities [Line Items] | ||
Gross Unrealized Losses Less than 12 Consecutive Months | $ (17,288) | $ (8,590) |
Fair Value Less than 12 Consecutive Months | 867,996 | 749,831 |
Gross Unrealized Losses 12 Consecutive Months or Longer | (24,935) | (16,380) |
Fair Value 12 Consecutive Months or Longer | 556,051 | 573,976 |
U.S.Treasury Securities [Member] | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Gross Unrealized Losses Less than 12 Consecutive Months | (202) | (111) |
Fair Value Less than 12 Consecutive Months | 19,748 | 12,966 |
Gross Unrealized Losses 12 Consecutive Months or Longer | (179) | (143) |
Fair Value 12 Consecutive Months or Longer | 6,319 | 6,371 |
Agency Securities [Member] | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Gross Unrealized Losses Less than 12 Consecutive Months | (243) | (168) |
Fair Value Less than 12 Consecutive Months | 16,022 | 16,097 |
Gross Unrealized Losses 12 Consecutive Months or Longer | (913) | (663) |
Fair Value 12 Consecutive Months or Longer | 25,723 | 25,972 |
Mortgage-Backed Securities [Member] | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Gross Unrealized Losses Less than 12 Consecutive Months | (711) | (503) |
Fair Value Less than 12 Consecutive Months | 17,631 | 19,628 |
Gross Unrealized Losses 12 Consecutive Months or Longer | (6,914) | (5,365) |
Fair Value 12 Consecutive Months or Longer | 140,289 | 153,835 |
Corporate Securities [Member] | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Gross Unrealized Losses Less than 12 Consecutive Months | (11,562) | (4,562) |
Fair Value Less than 12 Consecutive Months | 538,556 | 439,174 |
Gross Unrealized Losses 12 Consecutive Months or Longer | (15,555) | (9,228) |
Fair Value 12 Consecutive Months or Longer | 341,137 | 347,052 |
Municipal Securities [Member] | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Gross Unrealized Losses Less than 12 Consecutive Months | (1,786) | (1,027) |
Fair Value Less than 12 Consecutive Months | 139,591 | 125,819 |
Gross Unrealized Losses 12 Consecutive Months or Longer | (1,371) | (977) |
Fair Value 12 Consecutive Months or Longer | 40,649 | 38,167 |
Other [Member] | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Gross Unrealized Losses Less than 12 Consecutive Months | (2,784) | (2,219) |
Fair Value Less than 12 Consecutive Months | 136,448 | 136,147 |
Gross Unrealized Losses 12 Consecutive Months or Longer | (3) | (4) |
Fair Value 12 Consecutive Months or Longer | $ 1,934 | $ 2,579 |
Marketable Securities (Detail41
Marketable Securities (Details 3) - USD ($) $ in Thousands | Mar. 31, 2018 | Dec. 30, 2017 |
Amortized Cost | ||
Due in one year or less | $ 168,370 | |
Due after one year through five years | 1,175,500 | |
Due after five years through ten years | 160,650 | |
Due after ten years | 14,567 | |
Total | 1,519,087 | $ 1,446,428 |
Fair Value | ||
Due in one year or less | 167,745 | |
Due after one year through five years | 1,143,859 | |
Due after five years through ten years | 151,195 | |
Due after ten years | 14,131 | |
Total | $ 1,476,930 | $ 1,421,720 |
Revenue (Details)
Revenue (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2018 | Apr. 01, 2017 | |
Net sales | $ 710,872 | $ 641,510 |
Point in Time [Member] | ||
Net sales | 671,263 | 599,745 |
Over Time [Member] | ||
Net sales | $ 39,609 | $ 41,765 |
Revenue (Details 1)
Revenue (Details 1) $ in Thousands | 3 Months Ended | |
Mar. 31, 2018USD ($) | ||
Movement in Deferred Revenue [Roll Forward] | ||
Balance, beginning of period | $ 190,200 | [1] |
Deferrals in period | 31,291 | [1] |
Recognition of deferrals in period | (39,609) | [1] |
Balance, end of period | 181,882 | [1] |
Movement in Deferred Costs [Roll Forward] | ||
Balance, beginning of period | 63,554 | [2] |
Deferrals in period | 7,840 | [2] |
Recognition of deferrals in period | (9,639) | [2] |
Balance, end of period | $ 61,755 | [2] |
[1] | Deferred revenue is comprised of both Deferred revenue and Noncurrent deferred revenue per the Condensed Consolidated Balance Sheets. | |
[2] | Deferred costs are comprised of both Deferred costs and Noncurrent deferred costs per the Condensed Consolidated Balance Sheets. |
Accumulated Other Comprehensi44
Accumulated Other Comprehensive Income (Details) $ in Thousands | 3 Months Ended |
Mar. 31, 2018USD ($) | |
Other Comprehensive Income (Loss), Foreign Currency Transaction and Translation Adjustment, Net of Tax, Portion Attributable to Parent [Roll Forward] | |
Beginning Balance | $ 79,292 |
Other comprehensive income before reclassification, net of income tax benefit of $2,416 | 23,500 |
Amounts reclassified from accumulated other comprehensive income | |
Net current-period other comprehensive income | 23,500 |
Ending Balance | 102,792 |
Other Comprehensive Income (Loss), Available-for-sale Securities Adjustment, Net of Tax, Portion Attributable to Parent [Roll Forward] | |
Beginning Balance | (22,864) |
Other comprehensive income before reclassification, net of income tax benefit of $2,416 | (14,856) |
Amounts reclassified from accumulated other comprehensive income | (178) |
Net current-period other comprehensive income | (15,034) |
Reclassification of tax effects due to adoption of ASU 2018-02 | (452) |
Ending Balance | (38,350) |
Accumulated Other Comprehensive Income (Loss), Net of Tax [Roll Forward] | |
Beginning Balance | 56,428 |
Other comprehensive income before reclassification, net of income tax benefit of $2,416 | 8,644 |
Amounts reclassified from accumulated other comprehensive income | (178) |
Net current-period other comprehensive income | 8,466 |
Reclassification of tax effects due to adoption of ASU 2018-02 | (452) |
Ending Balance | $ 64,442 |
Accumulated Other Comprehensi45
Accumulated Other Comprehensive Income (Details 1) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2018 | Apr. 01, 2017 | |
Other income (expense) | $ 11,778 | $ (28,653) |
Income tax benefit (provision) | (24,606) | $ 150,029 |
Accumulated Net Investment Gain (Loss) Attributable to Parent [Member] | Reclassification From Accumulated Other Comprehensive Income [Member] | ||
Other income (expense) | (193) | |
Income tax benefit (provision) | 371 | |
Net of tax | $ 178 |