Balance Sheet Components

9 Months Ended

Feb. 01, 2020

Inventories

Inventories are stated at the lower-of-cost or net realizable value. Cost is determined using the first-in, first-out method. Finished products and work-in-process inventories include direct material costs and direct and indirect manufacturing costs. The Company records reserves for inventory that may be obsolete or in excess of current and future market demand. A summary of inventories is shown below:



(Dollars in Millions)	February 1, 2020		April 27, 2019
Raw Materials	$	75.9	$	67.1
Work in Process	11.3		9.4
Finished Products	38.9		40.2
Total Inventories	$	126.1	$	116.7

Property, Plant and Equipment

Property, plant and equipment is stated at cost. Maintenance and repair costs are expensed as incurred. Depreciation is calculated using the straight-line method using estimated useful lives of 5 to 40 years for buildings and building improvements and 3 to 15 years for machinery and equipment. A summary of property, plant and equipment is shown below:



(Dollars in Millions)	February 1, 2020		April 27, 2019
Land	$	3.4	$	3.7
Buildings and Building Improvements	85.9		81.2
Machinery and Equipment	408.6		390.7
Total Property, Plant and Equipment, Gross	497.9		475.6
Less: Accumulated Depreciation	298.9		283.7
Property, Plant and Equipment, Net	$	199.0	$	191.9

Depreciation expense was $7.5 million and $6.7 million in the three months ended February 1, 2020 and January 26, 2019, respectively. Depreciation expense was $21.7 million and $19.5 million in the nine months ended February 1, 2020 and January 26, 2019, respectively. As of February 1, 2020 and April 27, 2019, capital expenditures recorded in accounts payable totaled $2.0 million and $6.4 million, respectively.

Pre-Production Tooling Costs Related to Long-term Supply Arrangements

The Company incurs pre-production tooling costs related to certain products produced for its customers under long-term supply arrangements. As of February 1, 2020 and April 27, 2019, the Company had $39.9 million and $32.8 million, respectively, of pre-production tooling costs related to customer-owned tools for which reimbursement is contractually guaranteed by the customer or for which the customer has provided a non-cancelable right to use the tooling. Engineering, testing and other costs incurred in the design and development of production parts are expensed as incurred, unless the costs are reimbursable, as specified in a customer contract. As of February 1, 2020 and April 27, 2019, the Company had $15.9 million and $15.0 million, respectively, of Company owned pre-production tooling, which is capitalized within property, plant and equipment.

Government Grants

In the three and nine months ended February 1, 2020 and January 26, 2019, the Company recognized income from international government grants of $5.6 million and $5.7 million, respectively. Grant income is recognized in Other Income in the condensed consolidated statements of income when it is considered that there is reasonable assurance that the grant will be received and the necessary qualifying conditions, as stated in the grant agreement, are met. The international government grants are generally paid over a period of years and are recorded at amortized cost on the Company’s condensed consolidated balance sheets. As of February 1, 2020 and April 27, 2019, grant receivables outstanding were $14.4 million and $10.6 million, respectively. Additionally, as of February 1, 2020 and April 27, 2019, the Company has no deferred grant income.