Summary of Significant Accounting Policies (Tables)

12 Months Ended

Jan. 01, 2022


	January 1, 2022				January 2, 2021
	Cost		Fair Market Value		Cost		Fair Market Value
Marketable equity securities	$	23,286	$	33,044	$	46,578	$	47,576
Corporate and government bonds	—		—		3,498		3,505
Total short term investments	$	23,286	$	33,044	$	50,076	$	51,081

On July 22, 2021, Matterport, Inc. ("Matterport"), of which the Company held non-marketable equity securities, completed a merger with a special purpose acquisition company and began trading on Nasdaq under the symbol "MTTR." Prior to the merger, the Company accounted for the shares in Matterport as equity securities without readily determinable fair value. Upon consummation of the merger, the Company received 1.6 million shares of MTTR. The post merger Matterport shares received are subject to time based contractual sales restrictions which expire in January 2022. These shares are accounted for as marketable equity securities and measured at fair value, less a temporary discount for lack of marketability, with unrealized gains and losses recognized in other income, net at the end of each reporting period. During the fiscal year ended January 1, 2022, the Company recorded gains of $30.2 million associated with the Matterport investment. As of January 1, 2022, the shares in MTTR were valued at $33.0 million and are recorded in short term investments on the consolidated balance sheet. Subsequent to fiscal 2021, the Company sold all MTTR shares and received a net proceed of $16.2 million and recognized a loss of $16.8 million.

On July 1, 2020, Teladoc Health, Inc. ("Teladoc") closed on its previously announced acquisition of InTouch Health, of which the Company held non-marketable equity securities. In exchange for its shares of InTouch Health, the Company received 0.2 million shares of Teladoc and recorded a gain of $38.6 million to other income, net during the fiscal year ended January 2, 2021. The Teladoc shares received were subject to time based contractual sales restrictions which expired in January 2021. These shares were accounted for as marketable equity securities and measured at fair value with unrealized gains and losses recognized in other income, net at the end of each reporting period. As a result, the Company entered into an economic hedge in July 2020 to reduce the Company's exposure to stock price fluctuations during the restricted period. During the first quarter of 2021, the Company received net proceeds of $51.5 million related to the sale of Teladoc shares with gross proceeds of $60.1 million, net of settlement payment of $8.6 million for the related economic hedge.

Activity related to accounts receivable allowances was as follows (in thousands):


	Fiscal Year Ended
	January 1, 2022		January 2, 2021		December 28, 2019
Allowance for product returns
Balance at beginning of period	$	64,343	$	55,191	$	53,920
Provision	61,014		68,028		69,488
Deduction	(68,518)		(58,876)		(68,217)

Balance at end of period	$	56,839	$	64,343	$	55,191

Allowance for other credits and incentives
Balance at beginning of period	$	142,173	$	134,046	$	97,737
Provision	267,821		285,139		284,084
Deduction	(308,388)		(277,012)		(247,775)

Balance at end of period	$	101,606	$	142,173	$	134,046

Property and equipment

Property and equipment are recorded at cost and depreciated using the straight-line method over the estimated useful lives as follows:


			Estimated Useful Life
Computer and equipment			2-5 years
Furniture and fixtures			5
Machinery and tooling			2-5

Business applications software			3-7
Leasehold improvements			Lesser of economic benefit period or term of lease

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


	January 1, 2022		January 2, 2021
Computer and equipment	$	12,723	$	13,617
Furniture and fixtures	9,329		8,394
Machinery and tooling	97,348		80,715
Leasehold improvements	32,207		36,459
Business applications software	16,048		19,185
Other	4,143		1,642
Subtotal	171,798		160,012
Less: accumulated depreciation	92,911		83,428
Property and equipment, net	$	78,887	$	76,584

Basic and diluted net income per share

The following table presents the calculation of both basic and diluted net income per share (in thousands, except per share amounts):


	Fiscal Year Ended
	January 1, 2022		January 2, 2021		December 28, 2019
Net income	$	30,390	$	147,068	$	85,300
Weighted-average shares outstanding	27,687		28,101		28,097
Dilutive effect of employee stock plans	475		517		638
Diluted weighted-average shares outstanding	28,162		28,618		28,735
Basic income per share	$	1.10	$	5.23	$	3.04
Diluted income per share	$	1.08	$	5.14	$	2.97