Quarterly report pursuant to Section 13 or 15(d)

Summary of Significant Accounting Policies (Policies)

v3.20.2
Summary of Significant Accounting Policies (Policies)
9 Months Ended
Sep. 26, 2020
Accounting Policies [Abstract]  
Use of Estimates in the Preparation of Financial Statements
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.
The extent to which COVID-19 impacts the Company’s business and financial results will depend on numerous evolving factors including, but not limited to: the magnitude and duration of COVID-19, the extent to which it will impact worldwide macroeconomic conditions including interest rates, employment rates and health insurance coverage, the speed of the anticipated recovery, and governmental and business reactions to the pandemic. The Company assessed certain accounting matters that generally require consideration of forecasted financial information in context with the information reasonably available to the Company and the unknown future impacts COVID-19 as of September 26, 2020 and through the date of this report. The accounting matters assessed included, but were not limited to the carrying value of the goodwill and other long-lived assets. While there was not a material impact to the Company’s consolidated financial statements as of and for the quarter ended September 26, 2020, the Company’s future assessment of the magnitude and duration of COVID-19, as well as other factors, could result in material impacts to the Company’s consolidated financial statements in future reporting periods.
Revenue Recognition
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 and rebates. 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 September 26, 2020
Fastening, Hardware, and Personal Protective Solutions Consumer Connected Solutions Canada Total Revenue
Fastening and Hardware $ 202,876  $ —  $ 38,383  $ 241,259 
Personal Protective 97,431  —  12  97,443 
Keys and Key Accessories —  44,974  790  45,764 
Engraving —  14,205  14,207 
Resharp —  — 
Consolidated $ 300,307  $ 59,186  $ 39,187  $ 398,680 
Thirteen weeks ended September 28, 2019
Fastening, Hardware, and Personal Protective Solutions Consumer Connected Solutions Canada Total Revenue
Fastening and Hardware $ 163,860  $ —  $ 31,362  $ 195,222 
Personal Protective 59,087  —  —  59,087 
Keys and Key Accessories —  49,230  1,170  50,400 
Engraving —  12,556  12,557 
Resharp —  11  —  11 
Consolidated $ 222,947  $ 61,797  $ 32,533  $ 317,277 
Thirty-nine weeks ended September 26, 2020
Fastening, Hardware, and Personal Protective Solutions Consumer Connected Solutions Canada Total Revenue
Fastening and Hardware $ 543,832  $ —  $ 98,430  $ 642,262 
Personal Protective 239,151  —  78  239,229 
Keys and Key Accessories —  119,001  2,039  121,040 
Engraving —  38,666  38,671 
Resharp —  24  —  24 
Consolidated $ 782,983  $ 157,691  $ 100,552  $ 1,041,226 
Thirty-nine weeks ended September 28, 2019
Fastening, Hardware, and Personal Protective Solutions Consumer Connected Solutions Canada Total Revenue
Fastening and Hardware $ 465,524  $ —  $ 96,248  $ 561,772 
Personal Protective 185,430  —  —  185,430 
Keys and Key Accessories —  139,718  2,983  142,701 
Engraving —  39,646  39,650 
Resharp —  11  —  11 
Consolidated $ 650,954  $ 179,375  $ 99,235  $ 929,564 
The following table disaggregates our revenue by geographic location:

Thirteen weeks ended September 26, 2020
Fastening, Hardware, and Personal Protective Solutions Consumer Connected Solutions Canada Total Revenue
United States $ 295,689  $ 58,566  $ —  $ 354,255 
Canada 2,292  620  39,187  42,099 
Mexico 2,326  —  —  2,326 
Consolidated $ 300,307  $ 59,186  $ 39,187  $ 398,680 

Thirteen weeks ended September 28, 2019
Fastening, Hardware, and Personal Protective Solutions Consumer Connected Solutions Canada Total Revenue
United States $ 218,585  $ 61,241  $ —  $ 279,826 
Canada 1,622  556  32,533  34,711 
Mexico 2,740  —  —  2,740 
Consolidated $ 222,947  $ 61,797  $ 32,533  $ 317,277 

Thirty-nine weeks ended September 26, 2020
Fastening, Hardware, and Personal Protective Solutions Consumer Connected Solutions Canada Total Revenue
United States $ 771,064  $ 156,249  $ —  $ 927,313 
Canada 4,833  1,442  100,552  106,827 
Mexico 7,086  —  —  7,086 
Consolidated $ 782,983  $ 157,691  $ 100,552  $ 1,041,226 

Thirty-nine weeks ended September 28, 2019
Fastening, Hardware, and Personal Protective Solutions Consumer Connected Solutions Canada Total Revenue
United States $ 638,322  $ 178,028  $ —  $ 816,350 
Canada 4,045  1,347  99,235  104,627 
Mexico 8,587  —  —  8,587 
Consolidated $ 650,954  $ 179,375  $ 99,235  $ 929,564 

Our revenue by geography is allocated based on the location of our sales operations. Our Fastening, Hardware, and Personal Protective Solutions segment contains sales of Big Time Products ("Big Time") personal protective equipment into Canada. Our Consumer Connected Solutions segment contains sales of MinuteKey into Canada.
Fastening, Hardware, and Personal Protective Solutions revenues consist primarily of the delivery of fasteners, anchors, specialty fastening products, and personal protective equipment such as gloves and eye-wear as well as in-store merchandising services for the related product category.
Consumer Connected Solutions revenues consist primarily of sales of keys and identification tags through self service key duplication and engraving kiosks. It also includes our associate-assisted key duplication systems and key accessories.
Canada revenues consist primarily of the delivery to Canadian customers of fasteners and related hardware items, threaded rod, keys, key duplicating systems, accessories, personal protective equipment, and identification items 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. 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, 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.