Quarterly report pursuant to Section 13 or 15(d)

Summary of Significant Accounting Policies

v3.19.2
Summary of Significant Accounting Policies
6 Months Ended
Jun. 29, 2019
Accounting Policies [Abstract]  
Summary of Significant Accounting Policies
The significant accounting policies should be read in conjunction with the significant accounting policies included in the Form 10-K for the year ended December 29, 2018.
Use of Estimates in the Preparation of Financial Statements:
The preparation of financial statements in conformity with U.S. generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the dates of the financial statements and the reported amounts of revenues and expenses for the reporting periods. Actual results may differ from these estimates.

Revenue Recognition:
Revenue is recognized when control of goods or services is transferred to our customers, in an amount that reflects the consideration the Company expects to be entitled to in exchange for those goods or services. Sales and other taxes the Company collects concurrent with revenue-producing activities are excluded from revenue.
The Company offers a variety of sales incentives to its customers primarily in the form of discounts, rebates, and slotting fees. Discounts are recognized in the consolidated financial statements at the date of the related sale. Rebates are based on the revenue to date and the contractual rebate percentage to be paid. A portion of the cost of the rebate is allocated to each underlying sales transaction. Discounts and rebates are included in the determination of net sales.
The Company also establishes reserves for customer returns and allowances. The reserve is established based on historical rates of returns and allowances. The reserve is adjusted quarterly based on actual experience. Returns and allowances are included in the determination of net sales.
The following table displays our disaggregated revenue by product category.

 
Thirteen weeks ended June 29, 2019
 
Fastening
Solutions
 
Home and Access Solutions
 
Consumer Connected Solutions
 
Personal Protective Solutions
 
Total Revenue
United States
125,368

 
67,511

 
28,299

 
60,239

 
281,417

Canada
31,107

 
6,938

 
432

 
1,458

 
39,935

Other
2,246

 
214

 

 
816

 
3,276

Consolidated
158,721

 
74,663

 
28,731

 
62,513

 
324,628

 
 
 
 
 
 
 
 
 
 
 
Thirteen weeks ended June 30, 2018
 
Fastening
Solutions
 
Home and Access Solutions
 
Consumer Connected Solutions
 
Personal Protective Solutions
 
Total Revenue
United States
121,591

 
64,836

 
15,129

 

 
201,556

Canada
35,834

 
6,730

 
2

 

 
42,566

Other
1,769

 
263

 

 

 
2,032

Consolidated
159,194

 
71,829

 
15,131

 

 
246,154



 
Twenty-six weeks ended June 29, 2019
 
Fastening
Solutions
 
Home and Access Solutions
 
Consumer Connected Solutions
 
Personal Protective Solutions
 
Total Revenue
United States
228,243

 
130,195

 
55,686

 
122,395

 
536,519

Canada
54,806

 
11,894

 
794

 
2,424

 
69,918

Other
3,860

 
469

 

 
1,521

 
5,850

Consolidated
286,909

 
142,558

 
56,480

 
126,340

 
612,287

 
 
 
 
 
 
 
 
 
 
 
Twenty-six weeks ended June 30, 2018
 
Fastening
Solutions
 
Home and Access Solutions
 
Consumer Connected Solutions
 
Personal Protective Solutions
 
Total Revenue
United States
220,032

 
125,532

 
31,224

 

 
376,788

Canada
60,331

 
12,815

 
6

 

 
73,152

Other
3,347

 
462

 

 

 
3,809

Consolidated
283,710

 
138,809

 
31,230

 

 
453,749



Fastening solutions revenues consist primarily of the delivery of fasteners, anchors, and specialty products as well as in-store merchandising services for the related product category.
Home and access solutions revenues consist primarily of the delivery of keys and key accessories, builders' hardware, wall hanging, threaded rod products, letters, numbers, and signs ("LNS") as well as in-store merchandising services for the related product categories and access to our proprietary key duplicating equipment.
Consumer connected solutions revenues consist primarily of sales of keys and identification tags through self-service key duplicating machines and engraving kiosks.
Personal protective solutions revenues consist primarily of the delivery of personal protective equipment such as gloves, soft sided tool storage, and eye-wear as well as in-store merchandising services for the related product category.
The Company’s performance obligations under its arrangements with customers are providing products, in-store merchandising services, and access to key duplicating and engraving equipment. Generally, the price of the merchandising services and the access to the key duplicating and engraving equipment is included in the price of the related products. Control of products is transferred at the point in time when the customer accepts the goods. Judgment was required in applying the new revenue
standard in determining the time at which to recognize revenue for the in-store services and the access to key duplicating and engraving equipment. The Company’s obligation to provide in-store service and access to key duplicating and engraving equipment is satisfied when control of the related products is transferred. Therefore, consistent with the practice prior to the adoption of ASC 606, the entire amount of consideration related to the sale of products, in-store merchandising services, and access to key duplicating and engraving equipment is recognized upon the customer’s acceptance of the products. The revenues for all performance obligations are recognized upon the customer's acceptance of the products.
The costs to obtain a contract are insignificant, and generally contract terms do not extend beyond one year. Therefore, these costs are expensed as incurred. Freight and shipping costs and the cost of our in-store merchandising services teams are recognized in selling, general, and administrative expense when control over products is transferred to the customer.
The Company used the practical expedient regarding the existence of a significant financing component as payments are due in less than one year after delivery of the products.
Long Lived Assets:
The Company evaluates its long-lived assets, including definite-lived intangibles assets, for impairment including an evaluation based on the estimated undiscounted future cash flows as events or changes in circumstances indicate that the carrying amount of such assets may not be fully recoverable. In the thirteen and twenty-six weeks ended June 29, 2019, the Company recorded an impairment loss of $6,800 related to the loss on the disposal of its FastKey self-service key duplicating kiosks and related assets. No such impairment charges were recorded in the thirteen and twenty-six weeks ended June 30, 2018.