RECENT ACCOUNTING PRONOUNCEMENTS

6 Months Ended

Jul. 01, 2022

Accounting Changes and Error Corrections [Abstract]

RECENT ACCOUNTING PRONOUNCEMENTS

RECENT ACCOUNTING PRONOUNCEMENTS

In August 2020, the Financial Accounting Standards Board (“FASB”) issued ASU No. 2020-06, Accounting for Convertible Instruments in an Entity’s Own Equity, which simplifies the accounting for convertible instruments and contracts on an entity’s own equity. The Company adopted ASU 2020-06 effective on January 1, 2022, using the modified retrospective method. Among other changes, ASU 2020-06 removes from U.S. GAAP the liability and equity separation model for convertible instruments with a cash conversion feature. As a result, the Company no longer separately presents in equity an embedded conversion feature for such debt. Similarly, the embedded conversion feature is no longer amortized into income as interest expense over the life of the instrument. The cumulative effect of the ASU adoption was as follows:

			Adjustments from
	Balance at		Adoption of		Balance at
(in thousands)	December 31, 2021		ASU 2020-06		January 1, 2022
Liabilities
Convertible debt, current	$	36,824	$	626	$	37,450
Convertible debt, non-current	98,941		14,167		113,108
Mezzanine equity
Convertible debt	883		(883)		—
Equity
Additional paid-capital	2,387,039		(32,249)		2,354,790
Accumulated deficit	(2,087,957)		18,339		(2,069,618)

The impact of ASU adoption on the consolidated statement of operations for the three and six months ended July 1, 2022 was to decrease net interest expense by $1.4 million and $2.7 million, respectively. This had the effect of increasing the basic and diluted net income per share for the three and six months ended July 1, 2022 by approximately $0.01 and $0.03, respectively. The required use of if-converted method to calculate the impact of convertible notes on diluted earnings per share does not have a material impact. The Company is contractually required to settle the principal amount of 2022 Notes and 2024 Notes in cash. Accordingly, the dilutive effect of the Company's 2022 Notes and 2024 Notes will be limited to the conversion premium. The adoption of this ASU does not have any impact on the consolidated statement of cash flows.

From time to time, new accounting pronouncements are issued by the FASB, or other standards setting bodies, that are adopted by the Company as of the specified effective date. Unless otherwise discussed, the Company believes the impact of recently issued standards that are not yet effective will not have a material impact on its consolidated financial position, results of operations and cash flows upon adoption.