2 unchanged sentences
Report of Independent Registered Public Accounting Firm
−Removed: To the Board of Directors and Shareholders
+Added: To the Shareholders and Board of Directors
Dorman Products, Inc.:
1 unchanged sentence
We have audited the accompanying consolidated balance sheets of Dorman Products, Inc.
−Removed: and subsidiaries (the “Company”) as of December 28, 2019 and December 29, 2018, the related consolidated statements of operations, shareholders’ equity, and cash flows for each of the fiscal years in the three‑year period ended December 28, 2019, and the related notes and the consolidated financial statement schedule II listed under Item 15(a)(2) (collectively, the “consolidated financial statements”).
−Removed: In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company as of December 28, 2019 and December 29, 2018, and the results of its operations and its cash flows for each of the fiscal years in the three‑year period ended December 28, 2019, in conformity with U.S.
+Added: and subsidiaries (the Company) as of December 26, 2020 and December 28, 2019, the related consolidated statements of operations, shareholders’ equity, and cash flows for each of the years in the three‑year period ended December 26, 2020, and the related notes and financial statement schedule II (collectively, the consolidated financial statements).
+Added: In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company as of December 26, 2020 and December 28, 2019, and the results of its operations and its cash flows for each of the years in the three‑year period ended December 26, 2020, in conformity with U.S.
generally accepted accounting principles.
4 unchanged sentences
Targeted Improvements.
−Removed: As discussed in Note 12 to the consolidated financial statements, the Company has changed its method of accounting for revenue as of December 31, 2017, due to the adoption of ASU No.
−Removed: 2014-09, Revenue from Contracts with Customers (Topic 606).
Basis for Opinion
11 unchanged sentences
The critical audit matter communicated below is a matter arising from the current period audit of the consolidated financial statements that was communicated or required to be communicated to the audit committee and that:
−Removed: (1) relates to accounts or disclosures that are material to the consolidated financial statements and (2) involved our especially challenging, subjective, or complex judgment.
+Added: (1) relates to accounts or disclosures that are material to the consolidated financial statements and (2) involved our especially challenging, subjective, or complex judgments.
The communication of a critical audit matter does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates.
−Removed: Evaluation of future product returns
−Removed: As discussed in Notes 1 and 12 to the consolidated financial statements, the Company has recorded an accrual for customer rebates and returns of $105.9 million as of December 28, 2019.
−Removed: The accrual includes estimates for various cash discounts, product returns, promotional rebates, core returns, and other discounts in the period of sale.
−Removed: The accrual for customer rebates and returns is reflected in the consolidated financial statements as a reduction of gross sales.
−Removed: The Company’s obligation associated with product returns is classified as a current liability (“accrued customer rebates and returns”).
−Removed: We identified the evaluation of future product returns as a critical audit matter.
−Removed: There was a high degree of auditor judgment required over the Company’s inputs of market conditions that were used to develop the future product return rates assumption to estimate the accrual for future product returns.
−Removed: Specifically, the Company used recent historical experience as an input of market conditions that were used to develop the future product return rates assumption.
−Removed: A change to current market conditions could have a significant impact to the accrual for future product returns.
−Removed: The primary procedures we performed to address this critical audit matter included the following.
−Removed: We tested certain internal controls over the Company’s process for estimating the accrual for future product returns, including internal controls over the development of the future product return rates assumption.
−Removed: We evaluated the future product return rate assumption for a sample of customers using a combination of Company internal data, historical product return information, and executed third-party contracts.
−Removed: We assessed the Company’s ability to accurately estimate future product returns by comparing historically recorded accruals to actual subsequent product returns.
−Removed: We analyzed actual product returns received after year-end but prior to the issuance of the consolidated financial statements for contradictory information pertaining to the future product return rates assumption.
−Removed: We have served as the Company’s auditors since 2002.
+Added: Accrual for customer credits for defective product returns
+Added: As disclosed in Notes 1 and 12 to the consolidated financial statements, the Company estimates customer credits for defective product returns and other items.
+Added: The accrual for customer credits to be issued for defective product returns includes assumptions about the length of time between when a sale occurs and a credit is issued.
+Added: The provision for customer credits is reflected in the consolidated financial statements as a reduction from gross sales and accruals for customer credits are a portion of accrued customer rebates and returns.
+Added: At December 26, 2020, accrued customer rebates and returns were $155,751 thousand.
+Added: We identified the evaluation of the accrual for customer credits for defective product returns as a critical audit matter.
+Added: Subjective auditor judgment was required to evaluate the Company’s determination of the impact of market conditions on the length of time between when a sale occurs and a credit is issued for defective product returns.
+Added: The following are the primary procedures we performed to address this critical audit matter.
+Added: We evaluated the design and tested the operating effectiveness of certain internal controls related to the Company’s process to record the accrual for customer credits for defective product returns.
+Added: This included a control related to the determination of the impact of market conditions on the length of time between when a sale occurs and a credit is issued for defective product returns.
+Added: We assessed the Company’s accrual for customer credits for defective product returns by evaluating (1) the historical relationship between sales and customer credits for defective product returns, (2) the Company’s internal data, (3) certain external market data, and (4) a sample of executed third-party contracts.
+Added: We inquired of personnel within the Company’s quality control department regarding the impact of current market conditions on the length of time between when a sale occurs and a credit is issued for defective product returns.
+Added: We analyzed a sample of customer credits issued after year-end and evaluated their effect on the accrual.
+Added: We have served as the Company’s auditor since 2002.
Philadelphia, Pennsylvania
5 unchanged sentences
(in thousands, except per share data)
+Added: December 26, 2020
+Added: December 28, 2019
+Added: December 29, 2018
Cost of goods sold
1 unchanged sentence
Income from operations
−Removed: Other (expense) income, net
+Added: Other income (expense), net
Income before income taxes
7 unchanged sentences
(in thousands, except share data)
+Added: December 26, 2020
+Added: December 28, 2019
Current assets:
Cash and cash equivalents
−Removed: Accounts receivable, less allowance for doubtful accounts of $ 957 and
−Removed: $ 982 in 2019 and 2018, respectively
+Added: Accounts receivable, less allowance for doubtful accounts of $ 1,260 and $ 957 in 2020 and 2019, respectively
Prepaids and other current assets
23 unchanged sentences
Total shareholders' equity
+Added: Total liabilities and shareholders' equity
See accompanying Notes to Consolidated Financial Statements.
28 unchanged sentences
(in thousands)
+Added: December 26, 2020
+Added: December 28, 2019
+Added: December 29, 2018
Cash Flows from Operating Activities:
2 unchanged sentences
Depreciation, amortization and accretion
−Removed: Provision for doubtful accounts
−Removed: Provision (benefit) from deferred income tax
−Removed: Provision for non-cash stock compensation
+Added: Gain on equity method investment
+Added: Provision (benefit) for doubtful accounts
+Added: (Benefit) provision from deferred income taxes
+Added: Provision for stock-based compensation
Changes in assets and liabilities:
11 unchanged sentences
Cash Flows from Financing Activities:
+Added: Proceeds of revolving credit line
+Added: Payments of revolving credit line
Contingent consideration payments
26 unchanged sentences
Actual results could differ from those estimates.
−Removed: Reclassifications .
−Removed: Certain prior year amounts have been reclassified to conform with the current-year presentation.
Cash and Cash Equivalents .
3 unchanged sentences
Transactions under these programs were accounted for as sales of accounts receivable and were removed from our Consolidated Balance Sheet at the time of the sales transactions.
−Removed: During fiscal 2019, fiscal 2018 and fiscal 2017, we sold $ 676.4 million, $ 604.7 million and $ 582.9 million, respectively, pursuant to these programs.
−Removed: If receivables had not been sold, $ 437.9 million and $ 378.5 million of additional receivables would have been outstanding at December 28, 2019 and December 29, 2018, respectively, based on standard payment terms.
+Added: During fiscal 2020, fiscal 2019 and fiscal 2018, we sold $ 740.0 million, $ 676.4 million and $ 604.7 million, respectively, under these programs.
Selling, general and administrative expenses include $ 13.2 million, $ 16.7 million and $ 14.5 million in fiscal 2020, fiscal 2019 and fiscal 2018, respectively, of financing costs associated with these accounts receivable sales programs.
5 unchanged sentences
Property, Plant and Equipment .
−Removed: Property, plant and equipment are recorded at cost and depreciated over their estimated useful lives, which range from three to thirty-nine years , using the straight-line method for financial statement reporting purposes and accelerated methods for income tax purposes.
+Added: Property, plant and equipment are recorded at cost and depreciated over their estimated useful lives, which range from 3 to 39 years , using the straight-line method for financial statement reporting purposes and accelerated methods for income tax purposes.
The costs of maintenance and repairs are expensed as incurred.
8 unchanged sentences
Furniture, fixtures and leasehold improvements
+Added: 7 to 39 years
Long-Lived Assets Including Goodwill and Other Acquired Intangible Assets .
2 unchanged sentences
First, recoverability is measured by comparing the carrying amount of an asset to the estimated undiscounted future cash flows expected to be generated by the asset.
−Removed: If the carrying amount exceeds the estimated undiscounted future cash flows, the second step of the impairment test is performed and an impairment charge is recognized in the amount by which the carrying amount of the asset exceeds its fair value.
+Added: If the carrying amount exceeds the estimated undiscounted future cash flows, the second step of the impairment test is performed and an impairment charge is recognized in the amount by which the carrying amount of the asset exceeds
+Added: its fair value.
Assets to be disposed of would be separately presented in the balance sheet and reported at the lower of the carrying amount or fair value less costs to sell, and are no longer depreciated.
1 unchanged sentence
Goodwill is reviewed for impairment on an annual basis or whenever events or changes in circumstances indicate the carrying value of the goodwill may be impaired.
−Removed: In regards to the annual test, we have the option to first assess qualitative factors to determine whether the existence of events or circumstances leads to a determination that it is more likely than not that the fair value of a reporting unit is less than its carrying amount.
+Added: In regard to the annual test, we have the option to first assess qualitative factors to determine whether the existence of events or circumstances leads to a determination that it is more likely than not that the fair value of a reporting unit is less than its carrying amount.
If we determine it is not more likely than not that the fair value of a reporting unit is less than its carrying amount, then performing the two-step impairment test is unnecessary.
−Removed: During fiscal 2019 and fiscal 2018, we assessed the qualitative factors which could affect the fair values of our reporting units and determined that it was not more likely than not that the fair values of each reporting unit was less than its carrying amount.
+Added: During fiscal 2020 and fiscal 2019, we assessed the qualitative factors which could affect the fair values of our reporting units and determined that it was not more likely than not that the fair value of our reporting unit was less than its carrying amount.
Purchase Accounting .
15 unchanged sentences
According to guidance provided under the Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”), current assets are defined as “assets or resources commonly identified as those which are reasonably expected to be realized in cash or sold or consumed during the normal operating cycle of the business.” The determination of the long-term classification is based on our view that the value of the cores is not expected to be consumed or realized in cash during our normal annual operating cycle.
−Removed: We also have investments that we account for according to the equity method of accounting.
−Removed: The total book value of these investments was $ 19.3 million as of December 28, 2019 and $ 18.4 million as of December 29, 2018 , and these investments provided us $ 3.2 million and $ 2.2 million of income during fiscal 2019 and fiscal 2018 , respectively .
+Added: We have investments that we account for according to the equity method of accounting.
+Added: The total book value of these investments was $ 8.5 million and $ 19.3 million as of December 26, 2020 and December 28, 2019, respectively.
+Added: These investments provided us $ 1.3 million, $ 3.2 million and $ 2.2 million of income during fiscal 2020, fiscal 2019, and fiscal 2018, respectively.
+Added: In January 2020, we acquired the remaining 60 % of the outstanding stock of Power Train Industries, Inc.
+Added: (“PTI”), a privately-held supplier of parts to the automotive aftermarket, based in Reno, Nevada of which we held equity investments with a fair value of $ 12.3 million.
Additionally, in fiscal 2018 we purchased an investment that we account for according to the cost method of accounting.
−Removed: The book value of this investment was $ 5.0 million as of December 28, 2019 .
+Added: The carrying book value of this investment was $ 5.0 million as of December 26, 2020.
Other Accrued Liabilities.
3 unchanged sentences
Our warranty limits the end-user’s remedy to the repair or replacement of the part that is defective.
−Removed: Product warranty reserves, which were $ 0.6 million as of December 28, 2019 and December 29, 2018, respectively, are based upon actual experience and forecasts using the best historical and current claim information available.
−Removed: Provisions and payments related to product warranty reserves were not material in fiscal 2019, fiscal 2018 or fiscal 2017.
+Added: Product warranty reserves, were immaterial as of December 26, 2020 and December 28, 2019, and are based upon experience and forecasts using the best historical and current claim information available.
+Added: Provisions and payments related to end-user product warranty reserves were not material in fiscal 2020, fiscal 2019 or fiscal 2018.
Revenue Recognition and Accrued Customer Rebates and Returns .
Revenue is recognized from product sales when goods are shipped, title and risk of loss and control have been transferred to the customer and collection is reasonably assured.
−Removed: We record estimates for cash discounts, product returns, promotional rebates, core return deposits, and other discounts in the period of the sale ("Customer Credits").
+Added: We record estimates for cash discounts, defective and slow-moving product returns, promotional rebates, core return deposits, and other discounts in the period of the sale ("Customer Credits").
The provision for Customer Credits is recorded as a reduction from gross sales and reserves for Customer Credits are shown as an increase of accrued customer rebates and returns, which is included in current liabilities.
+Added: Customer Credits are estimated based on contractual provisions, historical experience, and our assessment of current market conditions.
Actual Customer Credits have not differed materially from estimated amounts.
6 unchanged sentences
Core return deposits are reserved based on the expected deposits to be issued to customers based on historical returns.
−Removed: Revision of Prior Period Financial Statements.
−Removed: During the quarter ended June 29, 2019, we identified and corrected an immaterial error that affected previously issued consolidated financial statements.
−Removed: This error related to the application of FASB Accounting Standards Update (“ASU”) No.
−Removed: 2014-09, Revenue from Contracts with Customers, related to the balance sheet classification of accrued customer rebates and returns that are recognized in connection with sales of our products.
−Removed: We adopted this ASU on December 31, 2017, the beginning of our 2018 fiscal year.
−Removed: We previously recorded accrued customer rebates and returns that were expected to be issued as credits to our customers as a valuation account which offset accounts receivable.
−Removed: Accrued customer rebates and returns are now recorded as a current liability.
−Removed: Previously issued comparative financial statements, which were revised to correct the error noted above, are presented “As Revised” in the tables presented in the following footnotes.
−Removed: December 29, 2018
−Removed: (in thousands)
−Removed: As Previously Reported
−Removed: Revised Consolidated Balance Sheet Amounts:
−Removed: Accounts receivable, net
−Removed: Total current assets
−Removed: Liabilities and shareholders' equity
−Removed: Accrued customer rebates and returns
−Removed: Total current liabilities
−Removed: Total liabilities and shareholders' equity
−Removed: Fiscal Year Ended December 29, 2018
−Removed: (in thousands)
−Removed: As Previously Reported
−Removed: Revised Consolidated Statement of Cash Flows from Operating Activities Amounts:
−Removed: Accounts receivable
−Removed: Accrued customer rebates and returns
−Removed: Accrued compensation and other liabilities
−Removed: Net cash used in operating activities
−Removed: Additionally, as a result of the adoption of ASU No.
−Removed: 2014-09, the Company should have disclosed the initial impact to the balance sheet reclassification for accrued customer rebates and returns from accounts receivable, net to accrued customer rebates and returns.
−Removed: The cumulative effect of the changes to the consolidated balance sheet from the adoption was as follows:
−Removed: (in thousands)
−Removed: As of December 30, 2017
−Removed: Effect of Adoption
−Removed: As of December 31, 2017
−Removed: Accounts receivable, net
−Removed: Accrued customer rebates and returns
−Removed: The correction of this error did not impact our Consolidated Statement of Operations or our Consolidated Statements of Shareholders’ Equity in any period presented.
Research and Development .
4 unchanged sentences
We record compensation expense for all awards granted.
−Removed: The value of restricted stock issued is based on the fair value of our common stock on the grant date.
−Removed: For performance-based restricted stock awards tied to growth and adjusted pre-tax income, compensation costs related to the stock is recognized over the performance period and is calculated using the closing price per share of our common stock on the grant date and an estimate of the probable outcome of the performance conditions as of the reporting date.
−Removed: The fair value of performance based restricted stock, for which the performance measure is total shareholder return, was determined using the Monte Carlo simulation model.
−Removed: The fair value of stock options granted was determined using the Black-Scholes option valuation model.
+Added: The value of restricted stock and restricted stock units issued is based on the fair value of our common stock on the grant date.
+Added: For performance-based restricted stock awards tied to growth in adjusted pre-tax income, compensation costs related to the stock is recognized over the performance period and is calculated using the closing price per share of our common stock on the grant date and an estimate of the probable outcome of the performance conditions as of the reporting date.
+Added: The fair value of performance-based restricted stock and performance-based restricted stock units, for which the performance measure is total shareholder return, was determined using a Monte Carlo simulation model.
+Added: The fair value of stock options granted was determined using the Black-Scholes option valuation model on the grant date.
Income Taxes .
11 unchanged sentences
Financial instruments that potentially subject us to concentrations of credit risk consist primarily of cash equivalents and accounts receivable.
−Removed: All cash equivalents are managed within established
−Removed: guidelines which limit the amount which may be invested with one issuer.
+Added: All cash equivalents are managed within established guidelines which limit the amount that may be invested with one issuer.
A significant percentage of our accounts receivable have been, and will continue to be, concentrated among a relatively small number of automotive retailers and warehouse distributors in the United States.
−Removed: Our four largest customer s accounted for 80 % of net accounts receivable as of December 28, 2019 and 76 % o f net accounts receivable as of December 29, 2018 , respectively .
+Added: Our four largest customers accounted for 82 % and 80 % of net accounts receivable as of December 26, 2020 and December 28, 2019, respectively.
We continually monitor the credit terms and credit limits to these and other customers.
−Removed: In fiscal 2019 , approximately 79 % of our products were purchased from suppliers located in a variety of foreign countries, with the largest portion coming from China.
+Added: In fiscal 2020 and fiscal 2019, approximately 77 % and 79 %, respectively, of our products were purchased from suppliers located in a variety of foreign countries, with the largest portion coming from China.
Fair Value Disclosures .
1 unchanged sentence
Additionally, the fair value of assets acquired and liabilities assumed are determined at the date of acquisition.
−Removed: We did no t hold any foreign currency forward contracts at December 28, 2019 or December 29, 2018.
+Added: Contingent consideration associated with an acquisition is recorded at fair value at the acquisition date and is adjusted to fair value at each reporting period.
New and Recently Adopted Accounting Pronouncements
−Removed: On December 30, 2018, the beginning of our 2019 fiscal year, we adopted ASU No.
−Removed: 2016-02, Leases, which replaces existing lease guidance.
−Removed: The ASU is intended to provide enhanced transparency and comparability by requiring lessees to record right-of-use assets and corresponding lease liabilities on the balance sheet.
−Removed: The new guidance will continue to classify leases as either finance or operating, with classification affecting the pattern of expense recognition in the statement of operations.
−Removed: Additionally, in August 2018, the FASB issued ASU 2018-11, Targeted Improvements to ASC 842, which includes an option to not restate comparative periods in transition and elect to use the effective date of ASC 842 as the date of initial application of transition.
−Removed: We adopted the standard using the modified retrospective approach and adoption resulted in right-of-use assets of $ 36.3 million and lease liabilities of $ 37.9 million as of December 29, 2018.
−Removed: Deferred rent and lease incentive liabilities associated with historical operating leases totaling $ 1.6 m illion were reclassified to the operating lease right-of-use assets as required by ASC 842.
−Removed: The transition did not have a material impact on our Consolidated Statement of Operations or Statement of Cash Flows.
−Removed: See Note 6 for additional information on leases.
In January 2017, the FASB issued ASU 2017-04, Simplifying the Test for Goodwill Impairment , which eliminates the need to perform a hypothetical purchase price allocation to measure goodwill impairment.
1 unchanged sentence
Early adoption is permitted, including adoption in an interim period.
−Removed: We are evaluating the new guidance.
−Removed: However, at this time we do not believe the new guidance will have a material impact on our consolidated financial statements and related disclosures.
−Removed: In June 2018, the FASB issued ASU 2018-07, Improvements to Nonemployee Share-Based Payment Accounting , which expands the scope of the current employee share-based payment guidance to include share-based payments issued to nonemployees to substantially align the accounting for share-based payments for nonemployees with those made to employees including, the fair value measurement, measurement date and classification of certain awards.
−Removed: The new guidance is effective for fiscal years beginning after December 15, 2018, with early application permitted.
We adopted this ASU effective December 29, 2019 , the beginning of our 2020 fiscal year.
−Removed: Adoption of this ASU did not have a material impact on our consolidated financial statements and related disclosures.
+Added: Adoption of this ASU did not have a material impact on our condensed consolidated financial statements and related disclosures.
In June 2016, the FASB issued ASU 2016-13, Financial Instruments-Credit Losses, which was subsequently amended in November 2018 through ASU 2018-19, Codification Improvements to Topic 326, Financial Instruments Credit Losses.
2 unchanged sentences
ASU 2016-13 is effective for companies beginning with fiscal years beginning after December 15, 2019.
−Removed: The Company is currently evaluating the new guidance to determine the impact the adoption of this guidance will have on the Company’s results of operations, cash flows, and financial condition.
−Removed: However, at this time we do not believe this new guidance will have a material impact on our consolidated financial statements and related disclosures.
−Removed: In December 2019, the FASB issued ASU 2019-12 , Income Taxes (Topic740):
−Removed: Simplifying the Accounting for Income Taxes.
−Removed: This ASU removes certain exceptions for recognizing deferred taxes for investments, performing intraperiod allocation and calculating income taxes in interim periods.
−Removed: The ASU also adds guidance to reduce complexity in certain areas, including recognizing deferred taxes for tax goodwill and allocating taxes to members of a consolidated group.
−Removed: ASU 2019-12 is effective for companies beginning with fiscal years beginning after December 15, 2020 .
−Removed: The Company is currently evaluating the new guidance to determine the impact the adoption of this guidance will have on the Company’s results of operations, cash flows, and financial condition .
−Removed: H owever, at this time we do not believe this new guidance will have a material impact on our consolidated financial statements and related disclosures.
+Added: We adopted this ASU effective December 29, 2019 , the beginning of our 2020 fiscal year.
+Added: Adoption of this ASU did not have a material impact on our condensed consolidated financial statements and related disclosures.
Business Acquisitions and Investments
−Removed: Flight Systems Automotive Group LLC
−Removed: On August 31, 2018, we acquired 100 % of the outstanding stock of Flight Systems Automotive Group LLC (“Flight Systems” or “Flight”), a privately-held manufacturer and remanufacturer of complex automotive electronics and diesel fuel system components, based in Lewisberry, Pennsylvania.
+Added: Power Train Industries, Inc.
+Added: On January 2, 2020, we acquired the remaining 60 % of the outstanding stock of PTI.
+Added: The total purchase price for PTI was approximately $ 30.7 million, which included $ 18.4 million paid for the remaining 60% of the outstanding stock, subject to customary purchase price adjustments, and $ 12.3 million which represents the fair value of the previously held 40 % equity interest in PTI that was acquired by the Company in 2016.
+Added: As a result of the acquisition, we recorded a gain of approximately $ 2.5 million in other income (expense), net during the year ended December 26, 2020 from the increase in fair value of the previously owned 40% interest in PTI.
+Added: We previously accounted for our 40% interest as an equity-method investment.
+Added: The transaction was accounted for as a business combination under the acquisition method of accounting.
+Added: Accordingly, the assets acquired, and liabilities assumed were recorded at fair value, with the remaining purchase price recorded as goodwill.
+Added: In connection with this acquisition, we recorded $ 16.7 million in goodwill, $ 7.3 million of identified intangibles, and $ 6.7 million of other assets, net, consisting of $ 3.5 million of cash, $ 2.0 million of accounts receivable, $ 5.6 million of inventory, and ($ 4.4 million) of net other assets and liabilities.
+Added: Our measurement period adjustments for PTI were complete as of December 26, 2020.
+Added: The valuation of the intangible assets acquired and related amortization periods are as follows:
+Added: (in thousands)
+Added: Customer relationships
+Added: The fair values of the customer relationships and trade names were estimated using an income approach based on the present value of future cash flows.
+Added: The goodwill recognized is attributable primarily to strategic and synergistic opportunities related to existing automotive aftermarket businesses, the assembled workforce of PTI and other factors.
+Added: The goodwill is not expected to be deductible for tax purposes.
+Added: The financial results of the acquisition have been included in the Condensed Consolidated Financial Statements since the date of acquisition.
+Added: Flight Systems Automotive Group L.L.C.
+Added: On August 31, 2018, we acquired 100 % of the outstanding stock of Flight Systems Automotive Group L.L.C.
+Added: (“Flight Systems” or “Flight”), a privately-held manufacturer and remanufacturer of complex automotive electronics and diesel fuel system components, based in Lewisberry, Pennsylvania.
The purchase price was $ 27.5 million.
10 unchanged sentences
Customer relationships
−Removed: The fair values of the Customer relationships and Tradenames were estimated using a discounted present value income approach.
+Added: The fair values of the customer relationships and trade names were estimated using an income approach based on the present value of future cash flows.
+Added: Under this method, an intangible asset’s fair value is equal to the present value of the incremental after-tax cash flows (excess earnings) attributable solely to the intangible asset over its remaining useful life.
The goodwill recognized is attributable primarily to strategic and synergistic opportunities related to existing automotive aftermarket businesses, the assembled workforce of Flight and other factors.
1 unchanged sentence
The financial results of the acquisition have been included in the Consolidated Financial Statements since the date of acquisition.
−Removed: MAS Automotive Distribution Inc.
−Removed: On October 26, 2017, we acquired 100 % of the outstanding stock of MAS Automotive Distribution Inc.
−Removed: (“MAS Industries” or “MAS”), a privately-held manufacturer of premium chassis and control arms based in
−Removed: Montreal, Canada.
−Removed: The purchase price was $ 67.2 million net of $ 3.3 million of cash acquired and including contingent consideration and ot her purchase price adjustments.
−Removed: The Company believes MAS is complementary to our business and growth strategy.
−Removed: We see opportunities to leverage MAS’ existing presence in the automotive aftermarket, as well as our product development capabilities and financial resources to accelerate the growth of MAS’ premium chassis and control arms.
−Removed: We have included the results of MAS in our Consolidated Financial Statements since the acquisition date of October 26, 2017.
−Removed: The Consolidated Statement of Operations for the year ended December 29, 2018 includes $ 40.3 million of net sales and an immaterial amount of net income related to MAS.
−Removed: The Consolidated Balance Sheets presented reflect the acquisition of MAS Industries, effective October 26, 2017.
−Removed: The following table summarizes the preliminary fair value of the total consideration at October 26, 2017:
−Removed: (in thousands)
−Removed: Total Acquisition Date Fair Value
−Removed: Cash consideration (net of $ 3.3 million cash received)
−Removed: Contingent cash consideration
−Removed: Seller liability assumed
−Removed: Working capital adjustment
−Removed: Total consideration assigned to net assets acquired
−Removed: Included in the table above is $ 8.0 million of estimated contingent payments which represented the acquisition date fair value of the estimated payments which will become due if certain sales thresholds are achieved through December 2020 .
−Removed: The fair value of the contingent cash consideration was estimated by using an option pricing model framework, which represents our own assumptions and data, and is based on our best available information.
−Removed: As of December 28, 2019, we had $ 5.6 million recorded related to this payment.
−Removed: During fiscal 2019, the Company reduced this accrual by approximately $ 2.3 million from the December 29, 2018 ending accrual amount of $ 7.9 million.
−Removed: The decrease was primarily due to an update made to assumptions utilized in the determination of the fair value of the estimated expected payments, specifically forecasted net sales attributable to the earnout period, which resulted in a $ 2.6 million reduction in the ending accrual, which reduced Selling, General and Administrative expenses in fiscal 2019.
−Removed: This amount was offset by $ 0.3 million of accretion which was also included in Selling, General and Administrative expenses in fiscal 2019.
−Removed: The maximum contingent payment would be $ 11.7 million.
−Removed: Additionally, during fiscal 2018, we finalized working capital and other purchase price adjustments based on the MAS standalone audited 2017 financial statements, resulting in a payment to the former shareholder of $ 1.5 million.
−Removed: This amount had previously been accrued on our Consolidated Balance Sheet.
−Removed: The transaction was accounted for as a business combination under the acquisition method of accounting.
−Removed: Accordingly, the assets acquired and liabilities assumed were recorded at fair value, with the remaining purchase price recorded as goodwill.
−Removed: The following table summarizes the fair values of the assets acquired and liabilities assumed as of October 26, 2017 (in thousands):
−Removed: (in thousands)
−Removed: October 26, 2017
−Removed: (As initially reported)
−Removed: Measurement period adjustments
−Removed: October 26, 2017
−Removed: (As adjusted)
−Removed: Current assets (net of $ 3.3 million cash received)
−Removed: Property, plant and equipment
−Removed: Intangible assets
−Removed: Total assets acquired
−Removed: Current liabilities
−Removed: Long-term liabilities
−Removed: Total liabilities assumed
−Removed: Net assets acquired
−Removed: Our measurement period adjustments for MAS were complete as of September 29, 2018.
−Removed: The valuation of the intangible assets acquired and related amortization periods are as follows:
−Removed: (in thousands)
−Removed: Amortization Period (in years)
−Removed: Customer relationships
−Removed: The fair values of the Customer relationships and Tradenames were estimated using a discounted present value income approach.
−Removed: Under this method, an intangible asset’s fair value is equal to the present value of the incremental after-tax cash flows (excess earnings) attributable solely to the intangible asset over its remaining useful life.
−Removed: To calculate fair value, we used cash flows discounted at rates ranging from 15 % to 17 %, which were considered appropriate given the inherent risks associated with each type of asset.
−Removed: We believe that the level and timing of cash flows appropriately reflect market participant assumptions.
−Removed: The goodwill recognized is attributable primarily to strategic and synergistic opportunities related to existing automotive aftermarket businesses, the assembled workforce of MAS and other factors.
−Removed: The goodwill is expected to be deductible for tax purposes.
−Removed: On January 27, 2017 we acquired a 33 % minority equity interest in a supplier for $ 10.0 million.
−Removed: We are accounting for our interest using the equity method of accounting, as our investment gives us the ability to exercise significant influence, but not control, over the supplier.
−Removed: On January 6, 2017 , we acquired certain assets of Ingalls Engineering Company, Inc., a chassis and suspension business, primarily to expand our product portfolio.
−Removed: The purchase price was $ 4.8 million, comprised of $ 3.1 million of cash and $ 1.7 million of estimated contingent payments as of the date of acquisition.
−Removed: The contingent payment arrangement is based upon future net sales of the acquired business.
−Removed: In connection with this acquisition, we have completed our purchase price allocation procedures and recorded $ 2.8 million in goodwill and other intangible assets and $ 2.0 million of other net assets.
−Removed: All the intangible assets resulting from the asset purchase are expected to be deductible for tax purposes.
−Removed: The financial results of the acquisition have been included in the Consolidated Financial Statements since the acquisition date.
−Removed: During fiscal 2018, the Company reassessed the accrual for the contingent payments, resulting in a reduction of the accrual by $ 2.1 million, which reduced Selling, General and Administrative expenses in fiscal 2018, due to an update made to assumptions utilized in the determination of the fair value of the estimated expected payments, specifically forecasted net sales attributable to the earnout period.
−Removed: As of December 28, 2018, the Company did not have an accrual for these contingent payments.
Inventories were as follows:
(in thousands)
+Added: December 26, 2020
+Added: December 28, 2019
Finished product
3 unchanged sentences
(in thousands)
+Added: December 26, 2020
+Added: December 28, 2019
Machinery, equipment and tooling
4 unchanged sentences
Depreciation and amortization expenses associated with property, plant, and equipment were $ 26.6 million, $ 25.4 million, and $ 25.4 million in fiscal 2020, fiscal 2019, and fiscal 2018, respectively.
−Removed: As discussed in Note 2, we adopted ASU No.
−Removed: 2016-02, Leases, on December 30, 2018, the beginning of our fiscal 2019, using the modified retrospective approach.
We determine whether an arrangement is a lease at inception.
13 unchanged sentences
Operating lease payments are recognized on a straight-line basis over the lease term.
−Removed: We had no finance leases as of December 28, 2019.
+Added: We had no finance leases as of December 26, 2020 or December 28, 2019.
Practical Expedients and Accounting Policy Elections
1 unchanged sentence
- We have elected to include both lease and non-lease components as a single lease component, as non-lease components of contracts have not historically been material.
−Removed: - We have elected to account for leases with terms of one year or less as short-term leases and, as such, lease with terms of less than one year are not included in the right-of-use assets or lease liabilities.
−Removed: As of December 28, 2019, there was no material variable lease costs or sublease income.
−Removed: Cash paid for operating leases was $ 6.0 million during the year ended December 28, 2019, which is classified in operating
−Removed: activities on the Consolidated Statements of Cash Flows .
−Removed: The following table summarizes the lease expense for the year ended December 28, 2019 :
+Added: - We have elected to account for leases with terms of one year or less as short-term leases and, as such, are not included in the right-of-use assets or lease liabilities.
+Added: As of December 26, 2020 and December 28, 2019, there were no material variable lease costs or sublease income.
+Added: Cash paid for operating leases was $ 7.7 million and $ 6.0 million during fiscal 2020 and fiscal 2019, respectively, which are classified in operating activities on the Consolidated Statements of Cash Flows.
+Added: The following table summarizes the lease expense:
+Added: For the Year Ended
(in thousands)
+Added: December 26, 2020
+Added: December 28, 2019
Operating lease expense
4 unchanged sentences
December 26, 2020
+Added: December 28, 2019
Operating lease right-of-use assets
12 unchanged sentences
For the year ended December 29, 2018, minimum rental payments under operating leases were recognized on a straight-line basis over the term of the lease including any periods of free rent.
−Removed: Rent expense for operating leases, including payments for short-term equipment and storage rentals, was $ 6.9 million in fiscal 2018 and $ 5.7 million in fiscal 2017.
−Removed: Minimum future rental payments required under operating leases in effect as of December 29, 2018 were as follows:
−Removed: (in thousands)
−Removed: December 29, 2018
−Removed: 2024 and thereafter
−Removed: Total rental payments
+Added: Rent expense for operating leases, including short-term equipment and storage rentals, was $ 6.9 million in fiscal 2018.
Goodwill and Intangible Assets
1 unchanged sentence
(in thousands)
+Added: December 26, 2020
+Added: December 28, 2019
Balance at beginning of period
6 unchanged sentences
December 28, 2019
−Removed: (dollars in thousands)
+Added: Intangible assets subject to amortization
Weighted Average Amortization Period (years)
5 unchanged sentences
Net Carrying Value
−Removed: Intangible assets subject to amortization
+Added: (dollars in thousands)
Customer relationships
−Removed: Amortization expense was $ 2.6 million in fiscal 2019, $ 2.3 million in fiscal 2018 and $ 0.5 million in fiscal 2017.
−Removed: The estimated future amortization expense for intangible assets is summarized as follows:
+Added: Amortization expense associated with intangible assets was $ 3.4 million, $ 2.6 million and $ 2.3 million in fiscal 2020, fiscal 2019 and fiscal 2018, respectively.
+Added: The estimated future amortization expense for intangible assets as of December 26, 2020, is summarized as follows:
(in thousands)
Long-Term Debt
−Removed: In December 2017, we entered into a credit agreement which will expire in December 2022 .
−Removed: This agreement provides for an initial revolving credit facility of $ 100.0 million and, subject to certain requirements, gives us the ability to request increases of up to an incremental $ 100.0 million.
−Removed: The credit agreement replaced our previous $ 30.0 million facility.
+Added: We have a credit agreement, expiring in December 2022 , that provides for a revolving credit facility of $ 100.0 million and, subject to certain requirements, gives us the ability to request increases in revolving credit commitments of up to an additional $ 100.0 million.
Borrowings under the credit agreement are on an unsecured basis.
At the Company’s election, the interest rate applicable to borrowings under the credit agreement will be either (1) the Prime Rate as announced by Wells Fargo from time to time, (2) an Adjusted LIBOR Market Index Rate as measured by the LIBOR Market Index Rate plus the Applicable Margin which fluctuates between 65 basis points and 125 basis points based on the ratio of the Company’s Consolidated Funded Debt to Consolidated EBITDA, or (3) an Adjusted LIBOR Rate as measured by the LIBOR Rate plus the Applicable Margin which fluctuates between 65 basis points and 125 basis points based on the ratio of the Company’s Consolidated Funded Debt to Consolidated EBITDA.
−Removed: The interest rate at December 28, 2019 was LIBOR plus 65 basis points ( 2.45 %).
−Removed: During the occurrence and continuance of an event of default, all outstanding revolving credit loans will bear interest at a rate per annum equal to 2.00 % in excess of the
−Removed: greater of (1) the Prime Rate or (2) the Adjusted LIBOR Market Index Rate then applicable .
−Removed: As of December 28, 2019 , we were no t in default in respect to the credit agreement.
+Added: During the occurrence and continuance of an event of default, as defined in the credit agreement, all outstanding revolving credit loans will bear interest at a rate per annum equal to 2.00 % in excess of the greater of (1) the Prime Rate or (2) the Adjusted LIBOR Market Index Rate then applicable .
The credit agreement also contains covenants, including those related to the ratio of certain consolidated fixed charges to consolidated EBITDA, capital expenditures, and share repurchases, each as defined by the credit agreement.
−Removed: The credit agreement also requires us to pay an unused fee of 0.10 % on the average daily unused portion of the facility , provided the unused fee will not be charged on the first $ 30 million of the revolving credit facility .
−Removed: As of December 28, 2019 , we were not in default in respect to the credit agreement .
−Removed: As of December 28, 2019 , there were no borrowings under the credit agreement and we had two outstanding letters of credit for approximately $ 0.8 million in the aggregate which were issued to secure ordinary course of business transactions.
−Removed: Net of these letters of credit, we had approximately $ 99.2 million available under the credit agreement at December 28, 2019 .
+Added: As of December 26, 2020, we were no t in default in respect to the credit agreement.
+Added: The credit agreement also requires us to pay a fee of 0.10 % on the average daily unused portion of the facility, provided the fee will not be charged on the first $ 30 million of the revolving credit facility.
+Added: On June 29, 2020, the first day of our fiscal third quarter, the Company repaid the $ 99.0 million of outstanding borrowings under this revolving credit facility, which borrowings were made earlier in the year to help manage liquidity in light of the COVID-19 pandemic.
+Added: Additionally, we paid $ 0.4 million in interest during the year.
+Added: The average interest rate while the debt was outstanding was 1.41 %.
+Added: As of December 26, 2020 and December 28, 2019, we had no borrowings under the credit agreement and two outstanding letters of credit for approximately $ 0.8 million in the aggregate which were issued to secure ordinary course of business transactions.
+Added: Net of these letters of credit, we had approximately $ 99.2 million available under the credit agreement as of December 26, 2020.
Related Party Transactions
−Removed: We have a non-cancelable operating lease for our primary operating facility from a partnership in which Steven L.
−Removed: Berman, our Executive Chairman, and his family members are partners.
−Removed: Total rental payments each year to the partnership under the lease arrangement were $ 1.6 million in each of fiscal 2019, fiscal 2018 and fiscal 2017.
−Removed: This lease was renewed during November 2016, effective as of January 1, 2018 , and will expire on December 31, 2022 .
−Removed: In the opinion of our Audit Committee, the terms and rates of this lease were no less favorable than those which could have been obtained from an unaffiliated party when the lease was renewed during November 2016.
−Removed: We are a partner in a joint venture with one of our suppliers and we own a minority interest in two other suppliers.
−Removed: Purchases from these companies, since we acquired our investment interests were $ 23.2 million in fiscal 2019 and $ 20.3 million in fiscal 2018 and $ 16.5 million in fiscal 2017.
−Removed: Tax Cuts and Jobs Act
−Removed: On December 22, 2017, the Tax Cuts and Jobs Act (the "TCJA") was enacted in the United States.
−Removed: The TCJA represented sweeping changes in U.S.
−Removed: Among the numerous changes in tax law, the TCJA permanently reduced the U.S.
−Removed: corporate income tax rate to 21 % beginning in 2018;
−Removed: allowed 100 % expensing for qualified property placed in service after September 27, 2017;
−Removed: imposed a one-time transition tax on deferred foreign earnings;
−Removed: established a participation exemption system by allowing a 100 % dividends received deduction on qualifying dividends paid by foreign subsidiaries;
−Removed: limited deductions for net interest expense;
−Removed: and expanded the U.S.
−Removed: taxation of foreign earned income to include "global intangible low taxed income."
−Removed: The TCJA transitions the U.S.
−Removed: from a worldwide tax system to a territorial tax system.
−Removed: Under previous law, companies could indefinitely defer U.S.
−Removed: income taxation on unremitted foreign earnings.
−Removed: The TCJA imposed a one-time transition tax on deferred foreign earnings of 15.5 % for liquid assets and 8 % for illiquid assets, payable in defined increments over eight years .
−Removed: We did no t recognize any transition tax expense due to having no accumulated earnings and profits in our non-U.S.
−Removed: subsidiaries.
+Added: We lease our Colmar, PA facility and a portion of our Lewisberry, PA facility from entities in which Steven L.
+Added: Berman, our Executive Chairman, and certain of his family members are owners.
+Added: Each lease is a non-cancelable operating lease.
+Added: Total rental payments to those entities under these lease arrangements were $ 1.8 million, $ 1.6 million, and $ 1.6 million in fiscal 2020, fiscal 2019 and fiscal 2018, respectively.
+Added: The lease for our corporate headquarters in Colmar, PA was renewed during November 2016, effective as of January 1, 2018 , and will expire on December 31, 2022 .
+Added: The lease for our Lewisberry, PA operating facility was signed in September 2020 and will expire on December 31, 2027 .
+Added: In the opinion of our Audit Committee, the terms and rates of these leases were no less favorable than those which could have been obtained from an unaffiliated party when the lease for our corporate headquarters in Colmar, PA was renewed during November 2016 and when the lease for our Lewisberry, PA operating facility was signed in September 2020.
+Added: We are a partner in a joint venture with one of our suppliers and own a minority interest in two other suppliers.
+Added: Purchases from these companies, and from PTI prior to our full acquisition on January 2, 2020 were $ 10.7 million, $ 23.2 million and $ 20.3 million in fiscal 2020, fiscal 2019 and fiscal 2018, respectively.
The components of the income tax provision (benefit) are as follows:
7 unchanged sentences
Effective tax rate
−Removed: At December 28, 2019, we had $ 2.3 million of unrecognized tax benefits, $ 2.0 million of which would affect our effective tax rate if recognized.
+Added: At December 26, 2020, we had $ 1.1 million of unrecognized tax benefits, all of which would affect our effective tax rate if recognized.
The following table summarizes the change in unrecognized tax benefits for the three years ended December 26, 2020:
4 unchanged sentences
Reductions due to reversals of prior year positions
−Removed: Additions based on tax positions taken during the prior period
Additions based on tax positions taken during the current period
1 unchanged sentence
We recognize interest and penalties related to unrecognized tax benefits in income tax expense.
−Removed: As of December 28, 2019, we had approximately $ 0.3 million of accrued interest and penalties related to unrecognized tax benefits.
−Removed: Deferred income taxes result from timing differences in the recognition of revenue and expense for tax and financial statement purposes.
+Added: As of December 26, 2020, accrued interest and penalties related to unrecognized tax benefits were immaterial.
+Added: Deferred income taxes result from timing differences in the recognition of revenue and expense between tax and financial statement purposes.
The sources of temporary differences are as follows:
(in thousands)
+Added: December 26, 2020
+Added: December 28, 2019
Accounts receivable
10 unchanged sentences
Based on our history of taxable income and our projection of future earnings, we believe that it is more likely than not that sufficient taxable income will be generated in the foreseeable future to realize the remaining net deferred tax assets.
−Removed: We file income tax returns in the United States, India, China, Canada and Mexico.
−Removed: All years before 2016 are closed for federal tax purposes.
+Added: We file income tax returns in the United States, Canada, China, India, and Mexico.
+Added: All years before 2017 are closed for U.S.
+Added: federal tax purposes.
Tax years before 2016 are closed for the states in which we file.
−Removed: Tax years before 2016 are closed for tax purposes in China and Canada.
−Removed: All tax years remain open for Mexico and India.
+Added: Tax years before 2017 are closed for tax purposes in Canada.
+Added: Tax years before 2017 are closed for tax purposes in China.
+Added: Tax years before 2015 are closed for tax purposes in Mexico.
+Added: All tax years remain open for India.
+Added: The Coronavirus Aid, Relief, and Economic Security (CARES) Act was signed into law on March 27, 2020 in response to the COVID-19 pandemic.
+Added: The CARES Act, among other things, allows net operating losses incurred in 2018, 2019, and 2020 to be carried back to each of the five preceding taxable years to generate a refund of previously paid income taxes.
+Added: The CARES Act also includes provisions relating to increased interest expense deductibility, refundable payroll tax credits, deferment of employer social security payments, and technical corrections to tax depreciation methods for qualified improvement property.
+Added: Most significant to the Company is the accelerated depreciation on qualified improvement property.
+Added: The Company continues to monitor Coronavirus-related Federal and state relief opportunities.
Commitments and Contingencies
5 unchanged sentences
The additional shareholders that are a party to the agreement are trusts affiliated with the late Richard Berman, Steven Berman, Jordan Berman, Marc Berman or Fred Berman, or each person’s respective spouse or children.
−Removed: During 2019, we voluntarily commenced an internal review into our product import classifications after discovering that we previously misclassified certain products that we imported into the United States.
−Removed: We also informed United States Customs & Border Protection (“CBP”) that we were commencing a voluntary disclosure process with CBP where, after completing our internal review, we would voluntarily disclose to CBP any identified product misclassifications and reimburse CBP for any resulting underpayment of duties.
−Removed: Since discovering the misclassifications, we have taken corrective actions with respect to the ongoing classification of our products and payment of duties on products being imported into the United States.
−Removed: Through our internal review, we identified misclassifications resulting in both underpayments and overpayments of duties to CBP.
−Removed: As of the date of this filing, our internal review is substantially complete.
−Removed: Since we are voluntarily reporting to CBP through a prior disclosure process, we believe our liability to CBP in that prior
−Removed: disclosure process will be limited to the unpaid duties, after deducting the overpayment of duties, and interest on such net unpaid duties for the last five years, which is the applicabl e statute of limitations.
−Removed: The Company recorded an estimated net charge of $ 2.8 million in its Statement of Operations for the year ended December 28, 2019, which represents the Company’s estimated underpayments of duties to CBP due to misclassifications after deducting estimated overpayments of duties to CBP due to misclassifications, plus applicable interest.
−Removed: The estimated net charge is reported between Cost of Goods Sold of $ 2.4 million and Selling, General and Administrative expenses representing estimated interest on the amounts owed to CBP of $ 0.4 million.
−Removed: The charge is reported in Other Long-Term liabilities since the ultimate resolution of the misclassifications with CBP is uncertain and is not expected to be resolved within the next twelve months.
−Removed: We expect to complete our internal review and make our initial prior disclosure submission to CBP in the first six months of 2020.
−Removed: However, the process of finalizing our prior disclosure with CBP may be iterative.
−Removed: We intend to work cooperatively with CBP in connection with the prior disclosure process and expect to complete the prior disclosure process with CBP and pay all required amounts within 18 months of our initial prior disclosure submission.
+Added: During 2019, we commenced a voluntary disclosure process in which we committed to disclosing to U.S.
+Added: Customs & Border Protection (“CBP”) certain product misclassifications and reimbursing CBP for any resulting underpayment of duties that were identified as part of a voluntary internal review conducted by the Company.
+Added: The Company recorded an estimated liability of $ 2.8 million in its Statement of Operations for the year ended December 28, 2019, which represents the Company’s estimated underpayment of duties, after deducting its estimated overpayment of duties, to CBP due to misclassifications over the prior five-year period, which is the applicable statute of limitations, plus applicable interest.
+Added: In June 2020, we completed our internal review and submitted our prior disclosure statement to CBP, along with payment of $ 2.8 million for underpaid duties and interest.
+Added: CBP has acknowledged receipt of our prior disclosure submission but has not yet communicated that our prior disclosure submission is closed.
+Added: We intend to work cooperatively with CBP in connection with its review of our prior disclosure submission.
+Added: Acquisitions.
+Added: We have contingent consideration related to certain of our prior acquisitions due to the uncertainty of the ultimate amount of payment which will become due as earnout payments if performance targets are achieved.
+Added: As of December 26, 2020 and December 28, 2019, we have accrued approximately $ 8.0 million and $ 5.6 million, respectively, which represents the fair value of the estimated payments that will become due in connection with these prior acquisitions if performance targets are achieved.
+Added: During fiscal 2020 we increased this accrual by $ 2.4 million, primarily due to updates to the net sales attributable to the earnout period.
+Added: In fiscal 2019, we reduced this accrual by $ 2.3 million, primarily due to updates in the assumptions used for forecasted net sales attributable to the earnout period.
+Added: This accrual balance change during fiscal 2018 was immaterial.
+Added: The changes in the accrual balance during fiscal 2020, fiscal 2019, and fiscal 2018 were included in Selling, General and Administrative expenses in each of the respective periods.
+Added: If the performance targets are fully achieved, the remaining maximum contingent payments under these agreements would be $ 15.3 million.
Other Contingencies .
3 unchanged sentences
Revenue Recognition
−Removed: The FASB issued ASU No.
−Removed: 2014-09, Revenue from Contracts with Customers , in May 2014 regarding the accounting for and disclosure of revenue.
−Removed: Specifically, the update outli ned a single comprehensive model for entities to use in accounting for revenue arising from contracts with customers.
−Removed: As part of our impact assessment of the implementation of the new revenue recognition guidance, we reviewed our historical accounting policies and practices to identify potential differences with the requirements of the new revenue recognition standard, as it related to our contracts and sales arrangements, as well as technical considerations for our future transaction accounting, financial reporting, and disclosure requirements.
−Removed: We adopted the guidance in the first quarter of 2018, as required, electing to use a modified retrospective adoption approach.
−Removed: Comparative information has not been restated and continues to be reported under the accounting standards in effect for those periods.
−Removed: In addition, we elected to apply certain of the permitted practical expedients within the revenue recognition guidance and make certain accounting policy elections including those related to significant financing components, sales taxes and shipping and handling activities.
−Removed: Adoption of the revenue recognition standard did not have a material impact on our reported earnings, cash flows, or balance sheet, however, adoption did increase the amount and level of disclosures concerning our net sales.
Business Description
1 unchanged sentence
We group our products into four major classes:
−Removed: power-train, automotive body, chassis, and hardware .
−Removed: Our products are sold primarily in the United States through automotive aftermarket retailers, national and regional local warehouse distributors and specialty markets, and salvage yards.
+Added: powertrain, automotive body, chassis, and hardware.
+Added: Our products are sold primarily in the United States through automotive aftermarket retailers, including through their online platforms, national and regional local warehouse distributors and specialty markets, and salvage yards.
We also distribute automotive replacement parts internationally, with sales primarily into Canada, Mexico, Europe, the Middle East, and Australia.
−Removed: We warrant our products against certain defects in material and workmanship when used as designed on the vehicle on which it was originally installed.
−Removed: We offer a limited lifetime warranty on most of our products.
−Removed: Our warranty limits the customer’s remedy to the repair or replacement of the part that is defective.
−Removed: Our primary source of revenue is from contracts with and p urchase orders from customers.
−Removed: Revenue is recognized from product sales when goods are shipped, title and risk of loss and control have been transferred to the customer, and col lection is reasonably assured.
+Added: Our primary source of revenue is from contracts with and purchase orders from customers.
+Added: In most instances, our contract with a customer is the customer’s purchase order.
+Added: Upon acceptance of the purchase order, a contract exists with a customer as a sales agreement indicates approval and commitment of the parties, identifies the rights of both parties, identifies the payment terms, has commercial substance, and it is probable that we will collect the consideration to which we will be entitled in exchange for the goods transferred to the customer.
+Added: For certain customers, we may also enter into a sales agreement which outlines pricing considerations as well as the framework of terms and conditions which apply to future purchase orders for that customer.
+Added: In these situations, our contract with the customer is both the sales agreement as well as the specific customer purchase order.
+Added: As our contract with a customer is typically for a single transaction or customer purchase order, the duration of the contract is typically one year or less.
+Added: As a result, we have elected to apply certain practical expedients and omit certain disclosures of remaining performance obligations for contracts which have an initial term of one year or less as permitted by the FASB.
+Added: Revenue is recognized from product sales when goods are shipped, title and risk of loss and control have been transferred to the customer, and collection is reasonably assured.
We estimate the transaction price at the inception of a contract or upon fulfilling a purchase order, including any variable consideration, and will update the estimate for changes in circumstances.
−Removed: We utilize the most likely amount method consistently to estimate the effect of uncertainty on the amount of variable consideration to wh ich we would be entitled.
−Removed: The most likely amount method considers the single most likely amount from a range of p ossible consideration amounts.
−Removed: This method is utilized for all of our variabl e consideration.
−Removed: We record estimates for cash discounts, product returns, promotional rebates, core return deposits and other discounts in the period the related product revenue is recognized (“Customer Credits”).
+Added: We record estimates for cash discounts, defective and slow-moving product returns, promotional rebates, core return deposits and other discounts in the period the related product revenue is recognized (“Customer Credits”).
The provision for Customer Credits is recorded as a reduction from gross sales and reserves for Customer Credits are shown as an increase of accrued customer rebates and returns.
+Added: Customer Credits are estimated based on contractual provisions, historical experience, and our assessment of current market conditions.
Actual Customer Credits have not differed materially from estimated amounts for each period presented.
2 unchanged sentences
We have concluded that our estimates of variable consideration are not constrained according to the definition in the new standard.
−Removed: All of our revenue was recognized under the point of time approach in accordance with the revenue standard during fiscal 2019 and fiscal 2018.
+Added: All of our revenue was recognized under the point of time approach in accordance with U.S.
+Added: generally accepted accounting principles during fiscal 2020, fiscal 2019 and fiscal 2018.
Also, we do not have significant financing arrangements with our customers, as our credit terms are all less than one year .
Lastly, we do not receive noncash consideration (such as materials or equipment) from our customers to facilitate the fulfillment of our contracts.
−Removed: Five-step model
−Removed: We apply the FASB’s guidance on revenue recognition, which requires us to recognize the amount of revenue and consideration which we expect to receive in exchange for goods or services transferred to our customers.
−Removed: To do this, we apply the five-step model prescribed by the FASB, which requires us to:
−Removed: (i) identify the contract with a customer;
−Removed: (ii) identify the performance obligations in the contract;
−Removed: (iii) determine the transaction price;
−Removed: (iv) allocate the transaction price to the performance obligations in the contract;
−Removed: and (v) recognize revenue when, or as, we satisfy a performance obligation.
−Removed: A summary of our application of the five-step model is as follows:
−Removed: In most instances, our contract with a customer is the customer’s purchase order.
−Removed: Upon acceptance of the purchase order, a contract exists with a customer as a sales agreement indicates approval and commitment of the parties, identifies the rights of both parties, identifies the payment terms, has commercial substance, and it is probable that we will collect the consideration to which we will be entitled in exchange for the goods transferred to the customer.
−Removed: For certain customers, we may also enter into a sales agreement which outlines pricing considerations as well as the framework of terms and conditions which apply to future purchase orders for that customer.
−Removed: In these situations, our contract with the customer is both the sales agreement as well as the specific customer purchase order.
−Removed: As our contract with a customer is typically for a single transaction or customer purchase order, the duration of the contract is typically one year or less.
−Removed: As a result, we have elected to apply certain practical expedients and omit certain disclosures of remaining performance obligations for contracts which have an initial term of one year or less as permitted by the FASB.
−Removed: We identify a performance obligation in a contract for each distinct good or service promised that are separately identifiable from other promises in the contract.
−Removed: We identify the transaction price as the amount of consideration including variable consideration that we expect to be entitled in exchange for transferring control of goods and/or services to our customers.
−Removed: We allocate the transaction price to each performance obligation on the basis of the amount of consideration to which we expect to be entitled in exchange for satisfying each performance obligation.
−Removed: We recognize revenue when we satisfy a performance obligation by transferring control of the promised goods.
Practical Expedients and Accounting Policy Elections
−Removed: In accordance with the guidance on revenue recognition and as permitted by the FASB, we have elected to use certain practical expedients and policy elections.
+Added: In accordance with the guidance on revenue recognition and as permitted by the FASB, we have elected to use certain practical expedients and policy elections, as follows:
- We have elected to not adjust the promised amount of consideration for the effects of a significant financing component as we expect, at contract inception, that the period between when we transfer a promised good or service to the customer and when the customer pays for that good or service will be one year or less.
2 unchanged sentences
- We have elected to account for shipping and handling activities that occur after the customer has obtained control of a good as a fulfilment activity rather than a separate performance obligation.
−Removed: Contract Assets and Liabilities
−Removed: We recognize a receivable or contract asset when we perform a service or transfer a good in advance of receiving consideration.
−Removed: - A receivable is recorded when our right to consideration is unconditional and only the passage of time is required before payment of that consideration is due.
−Removed: - A contract asset is recorded when our right to consideration in exchange for good or services that we have transferred to a customer is conditional on something other than the passage of time.
−Removed: We did no t have any contract assets recorded as of December 28, 2019 or December 29, 2018.
−Removed: We recognize a contract liability when we receive consideration, or if we have the unconditional right to receive consideration, in advance of satisfying the performance obligation.
−Removed: A contract liability is our obligation to transfer goods or services to a customer for which we have received consideration, or an amount of consideration is due from the customer.
−Removed: We did no t have any contract liabilities recorded as of December 28, 2019 or December 29, 2018.
Disaggregated Revenue
The following tables present our disaggregated net sales by type of major good / product line, and geography.
+Added: For the Year Ended
(in thousands)
+Added: December 26, 2020
+Added: December 28, 2019
+Added: December 29, 2018
Automotive Body
+Added: For the Year Ended
(in thousands)
+Added: December 26, 2020
+Added: December 28, 2019
+Added: December 29, 2018
Net Sales to U.S.
Net Sales to Non-U.S.
+Added: During fiscal 2020, three customers (Advance, AutoZone and O’Reilly) each accounted for more than 10% of net sales and in the aggregate accounted for 56 % of net sales in fiscal 2020.
+Added: In fiscal 2019 and fiscal 2018, four customers (Advance, AutoZone, NAPA, and O'Reilly) each accounted for more than 10% of net sales and in the aggregate accounted for approximately 66 % in fiscal 2019 and 63 % in fiscal 2018.
Capital Stock
Controlling Interest by Officers, Directors and Family Members .
−Removed: As of December 28, 2019, Steven Berman, the Executive Chairman of the Company, and members of his family beneficially own approximately 18 % of the outstanding shares of our common stock and can influence matters requiring approval of shareholders, including the election of the Board of Directors and the approval of significant transactions.
+Added: As of both December 26, 2020 and December 28, 2019, Steven Berman, the Executive Chairman of the Company, and members of his family beneficially owned approximately 18 % of the outstanding shares of our common stock and can influence matters requiring approval of shareholders, including the election of the Board of Directors and the approval of significant transactions.
Undesignated Stock .
10 unchanged sentences
At December 26, 2020, 853,471 shares were available for grant under the Plan.
−Removed: Restricted Stock
−Removed: We grant restricted stock to certain employees and members of our Board of Directors.
−Removed: We retain the restricted stock, and any dividends paid thereon, until the vesting restrictions have been met.
−Removed: For time-based restricted stock awards, compensation cost related to the stock is recognized on a straight-line basis over the vesting period and is calculated using the closing price per share of our common stock on the grant date.
−Removed: For performance-based restricted stock awards tied to growth and adjusted pre-tax income, compensation costs related to the stock is recognized over the performance period and is calculated using the closing price per share of our common stock on the grant date and an estimate of the probable outcome of the performance conditions as of the reporting date.
−Removed: In 2019, we introduced performance-based shares that vest based on our total shareholder return ranking relative to the S&P midcap 400 growth index over a three-year performance period.
−Removed: For performance-based restricted stock awards tied to total shareholder return, compensation cost related to the stock is recognized on a straight-line basis over the performance period and is calculated using the simulated fair value per share of our common stock based on the application of a Monte Carlo simulation model.
+Added: Restricted Stock Awards and Restricted Stock Units
+Added: Prior to March 2020, we issued awards of restricted stock to certain employees and members of our Board of Directors.
+Added: Grants were made in the form of time-based restricted stock awards and performance-based restricted stock awards.
+Added: For all restricted stock awards, we retain the restricted stock, and any dividends paid thereon, until the vesting restrictions have been met.
+Added: For time-based restricted stock awards, compensation cost is recognized on a straight-line basis over the vesting period and is calculated using the closing price per share of our common stock on the grant date.
+Added: Prior to 2019, we issued performance-based restricted stock awards tied to growth in adjusted pre-tax income.
+Added: Compensation costs related to those awards is recognized over the performance period and is calculated using the closing price per share of our common stock on the grant date and an estimate of the probable outcome of the performance conditions as of the reporting date.
+Added: In 2019, we introduced performance-based restricted stock awards that vest based on our total shareholder return ranking relative to the S&P Mid-Cap 400 Growth Index over a three-year performance period.
+Added: For those awards, compensation cost is recognized on a straight-line basis over the
+Added: performance period and is calculated using the simulated fair value per share of our common stock based on the application of a Monte Carlo simulation model.
This valuation technique includes estimating the movement of stock prices and the effects of volatility, interest rates and dividends.
−Removed: The following table summarizes the weighted average valuation assumptions used to calculate the fair value of total shareholder return performance restricted stock granted:
+Added: Beginning in March 2020, we began issuing restricted stock units to certain employees and members of our Board of Directors.
+Added: For time-based restricted stock units, compensation cost is recognized on a straight-line basis over the vesting period and is calculated using the closing price per share of our common stock on the grant date.
+Added: Also, in March 2020, we began issuing performance-based restricted stock units that vest based on our total shareholder return ranking relative to the S&P Mid-Cap 400 Growth Index over a three-year performance period.
+Added: For performance-based restricted stock units tied to total shareholder return, compensation cost is recognized on a straight-line basis over the performance period and is calculated using the simulated fair value per share of our common stock based on the application of a Monte Carlo simulation model as discussed in the paragraph above.
+Added: The following table summarizes the weighted average valuation assumptions used to calculate the fair value of total shareholder return performance-based restricted stock awards and performance-based restricted stock units granted:
+Added: For the Years Ended
+Added: December 26, 2020
+Added: December 28, 2019
Expected dividend yield
4 unchanged sentences
The risk-free rate is based on the U.S.
−Removed: Treasury security with terms equal to the expected time of exercise as of the grant date.
−Removed: The weighted-average
−Removed: grant-date fair value of total shareholder return based performance restricted stock granted during fiscal 2019 was $ 81.44 .
−Removed: Compensation cost related to restricted stock was $ 2.1 million, $ 2.6 million and $ 2.8 million in fiscal 2019, fiscal 2018 and fiscal 2017, respectively.
+Added: Treasury security with terms equal to the expected time of vesting as of the grant date.
+Added: The weighted-average grant-date fair value of total shareholder return performance-based restricted stock units granted during fiscal 2020 was $ 65.09 .
+Added: Compensation cost related to performance-based and time-based restricted stock awards and restricted stock units was $ 3.2 million, $ 2.1 million and $ 2.6 million in fiscal 2020, fiscal 2019 and fiscal 2018, respectively.
The compensation costs were classified as selling, general and administrative expense in the Consolidated Statements of Operations.
No cost was capitalized during fiscal 2020, fiscal 2019 or fiscal 2018.
−Removed: The following table summarizes our restricted stock activity for the three years ended December 28, 2019:
+Added: The following table summarizes our restricted stock awards and restricted stock unit activity for the three years ended December 26, 2020:
Average Price
3 unchanged sentences
Balance at December 26, 2020
−Removed: As of December 28, 2019, there was approximately $ 6.3 million of unrecognized compensation cost related to nonvested restricted stock, which is expected to be recognized over a weighted-average period of approximately 2.6 years.
+Added: As of December 26, 2020, there was approximately $ 6.9 million of unrecognized compensation cost related to unvested restricted stock and unvested restricted stock units, which is expected to be recognized over a weighted-average period of approximately 2.3 years.
Cash flows resulting from tax deductions in excess of the tax effect of compensation cost recognized in the financial statements are classified as operating cash flows.
−Removed: T he excess tax benefit generated from restricted shares which vested was $ 0.2 million in fiscal 2019, $ 0.1 million in fiscal 2018 and $ 0.4 million in fiscal 2017 and was credited to income tax expense.
+Added: The excess tax benefit generated from restricted stock awards and restricted stock units was immaterial for all periods presented.
Stock Options
We grant stock options to certain employees.
−Removed: We expense the grant-date fair value of stock options.
−Removed: Compensation cost is recognized over the vesting or performance period.
−Removed: Compensation cost charged against income was $ 0.7 million in fiscal 2019, $ 0.5 million in fiscal 2018 and $ 0.3 million in fiscal 2017, respectively .
+Added: We expense the grant-date fair value of stock options as compensation cost over the vesting or performance period.
+Added: Compensation cost charged against income for stock options was $ 1.0 million , $ 0.7 million and $ 0.5 million in fiscal 2020, fiscal 2019 and fiscal 2018, respectively .
The compensation costs were classified as selling, general and administrative expense in the Consolidated Statements of Operations.
No cost was capitalized during fiscal 2020, fiscal 2019 or fiscal 2018.
−Removed: We used the Black-Scholes option valuation model to estimate the fair value of stock options granted in fiscal 2019, fiscal 2018 and fiscal 2017.
+Added: We used the Black-Scholes option valuation model to estimate the fair value of stock options granted.
Expected volatility and expected dividend yield are based on the actual historical experience of our common stock.
2 unchanged sentences
Treasury security with terms equal to the expected time of exercise as of the grant date.
−Removed: The weighted-average grant-date fair value of options granted during fiscal 2019 was $ 24.32 , fiscal 2018 was $ 15.88 and fiscal 2017 was $ 15.81 per option.
−Removed: The following table summarizes the weighted average valuation assumptions used to calculate the fair value of options granted:
+Added: The following table summarizes the weighted average valuation assumptions used to calculate the fair value of options granted and the associated weighted-average grant-date fair values:
+Added: For the Years Ended
+Added: December 26, 2020
+Added: December 28, 2019
+Added: December 29, 2018
Expected dividend yield
2 unchanged sentences
Expected life of options
+Added: Weighted-average grant-date fair value
The following table summarizes our stock option activity for the three years ended December 26, 2020:
3 unchanged sentences
$5.67 – $78.64
−Removed: $41.59 – $78.64
Balance at December 29, 2018
2 unchanged sentences
$7.74 – $78.76
+Added: $41.59 – $82.94
Balance at December 28, 2019
7 unchanged sentences
$41.59 – $84.93
−Removed: As of December 28, 2019, there was approximately $ 1.6 million of unrecognized compensation cost related to nonvested stock options, which is expected to be recognized over a weighted-average period of approximately 2.7 years.
−Removed: The following table summarizes information concerning currently outstanding and exercisable options at December 28, 2019:
−Removed: Options Outstanding
−Removed: Options Exercisable
−Removed: Range of Exercise Price
−Removed: $41.59 - $61.13
−Removed: $61.14 - $73.13
−Removed: $73.14 - $78.70
−Removed: $78.71 - $82.31
+Added: As of December 26, 2020, there was approximately $ 2.3 million of unrecognized compensation cost related to unvested stock options, which is expected to be recognized over a weighted-average period of approximately 2.8 years.
+Added: Cash received from option exercises was $ 1.2 million, $ 0.1 million, and $ 0.2 million in fiscal 2020, fiscal 2019 and fiscal 2018, respectively.
+Added: The tax benefit generated from option exercises was immaterial for all periods presented.
2020 20192018
−Removed: Balance at December 28, 2019
−Removed: Cash received from option exercises was $ 0.1 million in fiscal 2019, $ 0.2 million in fiscal 2018, and less than $ 0.1 million in fiscal 2017.
−Removed: There was no excess tax benefit generated from option exercises in fiscal 2019 or fiscal 2018.
−Removed: The excess tax benefit generated from option exercises was $ 0.6 million in fiscal 2017 and was credited to income tax expense.
−Removed: Performance-Based Long Term Award Program.
−Removed: The Compensation Committee of our Board of Directors previously approved a performance-based long term award program (the “Program”) that connects compensation for certain of our executives to the three-year compound annual growth in our pre-tax income as defined in the Program.
−Removed: For the three-year periods ending in 2017, the Compensation Committee had the discretion to settle the long-term bonus in either cash or equity.
−Removed: These are liability-classified awards.
−Removed: The Compensation Committee elected to settle the award in equity for the three-year periods ending in fiscal 2017.
−Removed: In fiscal 2016, the Compensation Committee modified the Program to settle the awards earned in the three-year periods ending in fiscal 2018 and beyond in equity alone.
−Removed: These awards are equity-classified.
−Removed: In fiscal 2019, the Compensation Committee elected to connect the compensation of this program to the total shareholder return of the Company’s share price over a three-year period relative to a peer group.
−Removed: The fair value of these awards is determined using a Monte Carlo simulation to determine the most likely outcome of our share price relative to that of the peer group at the end of the three-year period.
−Removed: These awards are equity-classified.
−Removed: Any equity issued related to the Program will be from the 2018 Plan.
Employee Stock Purchase Plan.
1 unchanged sentence
Employee Stock Purchase Plan (the “ESPP”), which makes available 1,000,000 shares of our common stock for sale to eligible employees.
−Removed: The purpose of this plan, which is qualified under Section 423 of the Internal Revenue Service Code of 1986, as amended, is to encourage stock ownership through payroll deductions and limited cash contributions by our employees.
+Added: The purpose of the ESPP, which is qualified under Section 423 of the Internal Revenue Service Code of 1986, as amended, is to encourage stock ownership through payroll deductions and limited cash contributions by our employees.
These contributions are used to purchase shares of the Company’s common stock at a 15 % discount from the lower of the market price at the beginning or end of the purchase window.
−Removed: Share purchases under the plan are made twice annually, beginning in March 2018.
−Removed: There were 21,200 and 21,173 shares purchased under this plan during fiscal 2019 and 2018, respectively.
−Removed: There were no shares purchased under this plan during fiscal 2017.
−Removed: Compensation cost under the ESPP plan was $ 0.3 million in fiscal 2019 and $ 0.4 million in fiscal 2018.
+Added: Beginning in March 2018, share purchases under the plan are made twice annually.
+Added: There were 79,089 shares, 21,200 shares and 21,173 shares purchased under this plan during fiscal 2020, fiscal 2019 and fiscal 2018, respectively.
+Added: Compensation cost under the ESPP plan was $ 3.3 million, $ 0.3 million and $ 0.4 million in fiscal 2020, fiscal 2019 and fiscal 2018, respectively.
+Added: The tax benefit generated from ESPP purchases was $ 0.5 million in 2020.
+Added: There was no tax benefit generated from ESPP purchases in fiscal 2019 or fiscal 2018.
401(k) Retirement Plan .
1 unchanged sentence
401(k) Retirement Plan and Trust (the “401(k) Plan”) is a defined contribution profit sharing and 401(k) plan covering substantially all of our employees as of December 26, 2020.
−Removed: Annual contributions under the 401(k) Plan are determined by the Compensation Committee of our Board of Directors.
−Removed: Total expense related to the 401(k) Plan was $ 3.1 million in fiscal 2019, $ 4.3 million in fiscal 2018 and $ 2.7 million in fiscal 2017.
+Added: Annual company contributions under the 401(k) Plan are determined by the Compensation Committee of our Board of Directors.
+Added: Total expense related to the 401(k) Plan was $ 3.6 million, $ 3.1 million and $ 4.3 million in fiscal 2020, fiscal 2019 and fiscal 2018, respectively.
At December 26, 2020, the 401(k) Plan held 195,368 shares of our common stock.
3 unchanged sentences
Shares are generally purchased from the 401(k) Plan when participants sell units as permitted by the 401(k) Plan or elect to leave the 401(k) Plan upon retirement, termination or other reasons.
−Removed: During fiscal 2019 our Board of Directors approved the repurchase and cancellation of 22,380 shares of our common stock for $ 1.9 million at an average price of $ 87.26 per share.
−Removed: During fiscal 2018, our Board
−Removed: of Directors approved the repurchase and cancellation of 26,280 shares of our common stock for $ 2.0 million at an average price of $ 74.79 per share.
−Removed: During fiscal 2017 , our Board of Directors approved the repurchase and cancellation of 19,110 shares of our common stock for $ 1.4 million at an average price of $ 73.34 per share.
+Added: The following table summarizes the repurchase and cancellation of common stock:
+Added: For the Years Ended
+Added: December 26, 2020
+Added: December 28, 2019
+Added: December 29, 2018
+Added: Shares repurchased and cancelled
+Added: Total cost of shares repurchased and cancelled (in millions)
+Added: Average price per share
Share Repurchase Program .
3 unchanged sentences
The share repurchase program does not obligate us to acquire any specific number of shares.
−Removed: We repurchased 499,564 common shares for $ 39.4 million at an average price of $ 78.84 under this program during fiscal 2019.
−Removed: We repurchased 622,223 common shares for $ 43.4 million at an average price of $ 69.73 under this program during fiscal 2018.
−Removed: We repurchased 1,006,365 common shares for $ 74.7 million at an average price of $ 74.26 under this program during fiscal 2017.
At December 26, 2020, $ 207.1 million was available for repurchase under this program.
+Added: The following table summarizes the repurchase and cancellation of common stock:
+Added: For the Years Ended
+Added: December 26, 2020
+Added: December 28, 2019
+Added: December 29, 2018
+Added: Shares repurchased and cancelled
+Added: Total cost of shares repurchased and cancelled (in millions)
+Added: Average price per share
Earnings Per Share
−Removed: Basic earnings per share was calculated by dividing our net income by the weighted average number of common shares outstanding during the period, excluding unvested restricted stock which is considered to be contingently issuable.
−Removed: To calculate diluted earnings per share, common share equivalents are added to the weighted average number of common shares outstanding.
−Removed: Common share equivalents are calculated using the treasury stock method and are computed based on outstanding stock-based awards.
+Added: Basic earnings per share was calculated by dividing our net income by the weighted average number of common shares outstanding during the period, excluding unvested restricted stock and unvested restricted stock units which are considered to be contingently issuable.
+Added: To calculate diluted earnings per share, common share
+Added: equivalents are added to the weighted average number of common shares outstanding.
+Added: Common share equivalents are calculated using the treasury stock method and are computed based on o utstanding stock-based awards.
Stock-based awards of approximately 35,975 shares, 92,000 shares and 116,000 shares were excluded from the calculation of diluted earnings per share as of December 26, 2020 , December 28, 2019 and December 29, 2018 , respectively, as their effect would have been anti-dilutive.
The following table sets forth the computation of basic earnings per share and diluted earnings per share:
+Added: For the Year Ended
(in thousands, except per share data)
+Added: December 26, 2020
+Added: December 28, 2019
+Added: December 29, 2018
Weighted average basic shares outstanding
4 unchanged sentences
We have determined that our business comprises a single reportable operating segment, namely, the sale of replacement parts and fasteners for passenger cars, light trucks, and heavy-duty trucks in the automotive aftermarket industry.
−Removed: During fiscal 2019, fiscal 2018 and fiscal 2017, four of our customers (Advance Auto Parts, Inc., AutoZone, Inc., Genuine Parts Co.
−Removed: – NAPA, and O’Reilly Automotive, Inc.) each accounted for more than 10% of net sales and in the aggregate accounted for 66 % of net sales in fiscal 2019, 63 % in fiscal 2018 and 61 % in fiscal 2017.
Net sales to countries outside the United States, primarily to Canada and Mexico, and to a lesser extent into Europe, the Middle East, and Australia, in fiscal 2020, fiscal 2019 and fiscal 2018 were $ 61.6 million, $ 61.4 million and $ 60.5 million, respectively.
−Removed: Quarterly Results of Operations (Unaudited)
−Removed: The following is a summary of the unaudited quarterly Results of Operations for the fiscal years ended December 28, 2019 and December 29, 2018:
−Removed: (in thousands, except per share amounts)
−Removed: Income from operations
−Removed: Diluted earnings per share
−Removed: (in thousands, except per share amounts)
−Removed: Income from operations*
−Removed: Diluted earnings per share*
−Removed: * Quarterly information does not add to year to date information due to rounding
−Removed: Subsequent Events
−Removed: On January 2, 2020, we acquired the remaining 60 % of the outstanding stock of Power Train Industries (“PTI”), a privately-held supplier of parts to the automotive aftermarket, based in Reno, Nevada.
−Removed: The purchase price was $ 18.2 million, subject to working capital adjustments, and was accounted for as a business combination.
−Removed: We will consolidate PTI’s results beginning in the first quarter of 2020.
−Removed: Prior to the acquisition date, we accounted for our 40 % interest in PTI, which was acquired in 2016, as an equity-method investment.
Changes in and Disagreements with Accountants on Accounting and Financial Disclosure.
Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.