Note 7 - Guarantees and Other Obligations

3 Months Ended

Mar. 31, 2018

Notes to Financial Statements

Commitments Contingencies and Guarantees [Text Block]

7. Guarantees and Other Obligations

Product Warranty

Our products are generally sold with warranty periods that range from

12

to

36

months following sale or acceptance. The product warranty promises customers that delivered products are as specified in the contract (an “assurance-type warranty”). Therefore, we accounts for such product warranties under ASC

460,

and

not

as a separate performance obligation. Parts and labor are covered under the terms of the warranty agreement. The warranty provision is based on historical and projected experience by product and configuration.

Changes in accrued warranty were as follows (

in thousands

):

	Three Months Ended
	March 31,			March 25,
	2018			2017
Balance at beginning of period	$	4,849		$	4,350
Warranty expense accruals		1,582			1,736
Warranty payments		(1,515	)		(1,191	)
Warranty liability assumed		-			50
Balance at end of period	$	4,916		$	4,945

Accrued warranty amounts expected to be incurred after

one

year are included in noncurrent other accrued liabilities in the condensed consolidated balance sheet. These amounts total

$0.3

 million at

March 31, 2018,

and

$0.6

 million at

December 30, 2017. 

Borrowings

Revolving Lines of Credit

We have credit agreements with multiple financial institutions in Japan under which they administer lines of credit on behalf of our wholly owned Kita subsidiary. The credit facilities renew monthly and provide Kita with access to working capital totaling up to

$6.6

 million and at

March 31, 2018,

total borrowings outstanding under the revolving lines of credit were

$3.3

 million. As these credit facility agreements renew monthly, they have been included in short-term borrowings in our condensed consolidated balance sheet. The revolving lines of credit are denominated in Japanese Yen and, as a result, amounts disclosed herein will fluctuate because of changes in currency exchange rates.

Term Loans

We have long-term term loans from a series of Japanese financial institutions related to the expansion of Kita’s facility in Osaka, Japan. The loans are collateralized by the facility and land, carry interest rates ranging from

0.05%

to

0.45%,

and expire at various dates through

2034.

At

March 31, 2018

the aggregate amount outstanding was

$5.8

million and

$1.3

million of the term loans have been included in current installments of long-term debt in our condensed consolidated balance sheet. The fair value of our debt approximates the carrying value at

March 31, 2018.

The term loans are denominated in Japanese Yen and, as a result, amounts disclosed herein will fluctuate because of changes in currency exchange rates.

Lines of Credit

We have

one

available line of credit, which provides

one

of our wholly owned subsidiaries with borrowings up to

2.0

 million Swiss Francs. At

March 31, 2018

and

December 30, 2017,

no

amounts were outstanding under the line of credit.