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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549 
__________________________________________________________________ 
FORM 10-Q 
__________________________________________________________________
 
(Mark One)
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
 
For the quarterly period ended: April 2, 2022
 
OR
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from                     to                    
 
Commission file number: 000-19848 
__________________________________________________________________ 
fosl-20220402_g1.gif
FOSSIL GROUP, INC.
(Exact name of registrant as specified in its charter)
 __________________________________________________________________
Delaware 75-2018505
(State or other jurisdiction of
incorporation or organization)
 (I.R.S. Employer
Identification No.)
   
901 S. Central Expressway,Richardson,Texas 75080
(Address of principal executive offices) (Zip Code)
(972) 234-2525
(Registrant’s telephone number, including area code) 
__________________________________________________________________ 
Securities registered pursuant to Section 12(b) of the Act:
Title of each classTicker SymbolName of each exchange on which registered
Common Stock, par value $0.01 per shareFOSLThe Nasdaq Stock Market LLC
7.00% Senior notes due 2026FOSLLThe Nasdaq Stock Market LLC
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes  No 
 
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes  No 




 
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and "emerging growth company" in Rule 12b-2 of the Exchange Act (check one):
Large accelerated filer Accelerated filer
   
Non-accelerated filer  Smaller reporting company
Emerging growth company
 
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act o
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes  No 

The number of shares of the registrant’s common stock outstanding as of May 4, 2022: 51,766,969




FOSSIL GROUP, INC.
FORM 10-Q
FOR THE FISCAL QUARTER ENDED APRIL 2, 2022
INDEX





























Trademarks, service marks, trade names and copyrights

We use our FOSSIL, MICHELE, RELIC, SKAGEN and ZODIAC trademarks, as well as other trademarks, on certain watches and smartwatches, our FOSSIL and SKAGEN trademarks on jewelry, and our FOSSIL trademark on leather goods and other fashion accessories in the U.S. and in a significant number of foreign countries. We also use FOSSIL, SKAGEN, WATCH STATION INTERNATIONAL and WSI as trademarks on retail stores and FOSSIL, SKAGEN, WATCH STATION INTERNATIONAL, WSI, MISFIT, ZODIAC and MICHELE as trademarks on online e-commerce sites. This filing may also contain other trademarks, service marks, trade names and copyrights of ours or of other companies with whom we have, for example, licensing agreements to produce, market and distribute products. Solely for convenience, the trademarks, service marks, trade names and copyrights referred to or incorporated by reference into this prospectus supplement and the accompanying prospectus may be listed without the TM, SM, © and ® symbols, as applicable, but we will assert, to the fullest extent under applicable law, our rights or the rights of the applicable licensors, if any, to these trademarks, service marks, trade names and copyrights.




PART I—FINANCIAL INFORMATION

Item 1. Financial Statements
FOSSIL GROUP, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
UNAUDITED
IN THOUSANDS
April 2, 2022January 1, 2022
Assets  
Current assets:  
Cash and cash equivalents$162,619 $250,844 
Accounts receivable - net of allowances for doubtful accounts of $16,637 and $16,388, respectively
201,106 255,131 
Inventories385,831 346,850 
Prepaid expenses and other current assets187,663 169,930 
Total current assets937,219 1,022,755 
Property, plant and equipment - net of accumulated depreciation of $434,682 and $436,663, respectively
85,558 89,767 
Operating lease right-of-use assets 166,231 177,597 
Intangible and other assets-net76,314 78,600 
Total long-term assets328,103 345,964 
Total assets$1,265,322 $1,368,719 
Liabilities and Stockholders’ Equity  
Current liabilities:  
Accounts payable$198,527 $229,877 
Short-term and current portion of long-term debt619 554 
Accrued expenses:  
Current operating lease liabilities52,739 58,721 
Compensation45,473 73,595 
Royalties16,863 38,714 
Customer liabilities 39,227 40,886 
Transaction taxes7,162 17,147 
Other45,769 46,675 
Income taxes payable26,300 29,478 
Total current liabilities432,679 535,647 
Long-term income taxes payable22,603 20,452 
Deferred income tax liabilities502 504 
Long-term debt183,852 141,354 
Long-term operating lease liabilities164,588 174,520 
Other long-term liabilities31,634 30,884 
Total long-term liabilities403,179 367,714 
Commitments and contingencies (Note 13)
Stockholders’ equity:  
Common stock, 51,157 and 52,146 shares issued and outstanding at April 2, 2022 and January 1, 2022, respectively
511 521 
Additional paid-in capital302,583 300,848 
Retained earnings198,134 229,132 
Accumulated other comprehensive income (loss)(74,062)(67,275)
Total Fossil Group, Inc. stockholders’ equity427,166 463,226 
Noncontrolling interests2,298 2,132 
Total stockholders’ equity429,464 465,358 
Total liabilities and stockholders’ equity$1,265,322 $1,368,719 
 
See notes to the unaudited condensed consolidated financial statements.
5



FOSSIL GROUP, INC.
CONDENSED CONSOLIDATED STATEMENTS OF INCOME (LOSS) AND COMPREHENSIVE INCOME (LOSS)
UNAUDITED
IN THOUSANDS, EXCEPT PER SHARE DATA
 
For the 13 Weeks Ended April 2, 2022For the 13 Weeks Ended April 3, 2021
Net sales$375,853 $363,042 
Cost of sales191,540 180,453 
Gross profit184,313 182,589 
Operating expenses:  
Selling, general and administrative expenses195,758 187,324 
Other long-lived asset impairments286 4,500 
Restructuring charges2,551 7,520 
Total operating expenses198,595 199,344 
Operating income (loss)(14,282)(16,755)
Interest expense3,997 7,331 
Other income (expense) - net1,618 1,864 
Income (loss) before income taxes(16,661)(22,222)
Provision for income taxes4,687 2,117 
Net income (loss)(21,348)(24,339)
Less: Net income (loss) attributable to noncontrolling interests166 101 
Net income (loss) attributable to Fossil Group, Inc.$(21,514)$(24,440)
Other comprehensive income (loss), net of taxes:  
Currency translation adjustment$(7,885)$(10,121)
Cash flow hedges - net change1,098 1,742 
Total other comprehensive income (loss)(6,787)(8,379)
Total comprehensive income (loss)(28,135)(32,718)
Less: Comprehensive income (loss) attributable to noncontrolling interests166 101 
Comprehensive income (loss) attributable to Fossil Group, Inc.$(28,301)$(32,819)
Earnings (loss) per share:  
Basic$(0.41)$(0.47)
Diluted$(0.41)$(0.47)
Weighted average common shares outstanding:  
Basic51,999 51,519 
Diluted51,999 51,519 
 
See notes to the unaudited condensed consolidated financial statements.
6



FOSSIL GROUP, INC.
CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY
UNAUDITED
IN THOUSANDS

For the 13 Weeks Ended April 2, 2022
 Common stockAdditional
paid-in
capital
Treasury
stock
Retained
earnings
Accumulated
other
comprehensive
income
(loss)
Stockholders'
equity
attributable
to Fossil
Group, Inc.
Noncontrolling interestTotal stockholders' equity
SharesPar
value
Balance, January 1, 202252,146 $521 $300,848 $ $229,132 $(67,275)$463,226 $2,132 $465,358 
Acquisition of common stock— — — (10,000)— — (10,000)— (10,000)
Retirement of common stock(989)(10)(506)10,000 (9,484)—  —  
Stock-based compensation— — 2,241 — — — 2,241 — 2,241 
Net income (loss)— — — — (21,514)— (21,514)166 (21,348)
Other comprehensive income (loss)— — — — — (6,787)(6,787)— (6,787)
Balance, April 2, 202251,157 $511 $302,583 $ $198,134 $(74,062)$427,166 $2,298 $429,464 

For the 13 Weeks Ended April 3, 2021
 Common stockAdditional
paid-in
capital
Treasury
stock
Retained
earnings
Accumulated
other
comprehensive
income
(loss)
Stockholders'
equity
attributable
to Fossil
Group, Inc.
Noncontrolling interestTotal stockholders' equity
SharesPar
value
Balance, January 2, 202151,474 $515 $293,777 $ $203,698 $(58,900)$439,090 $942 $440,032 
Common stock issued upon exercise of stock options, stock appreciation rights and restricted stock units77 — — — — — — — — 
Acquisition of common stock for employee tax withholding— — — (254)— — (254)— (254)
Retirement of common stock(25) (254)254 — — — —  
Stock-based compensation— — 1,764 — — — 1,764 — 1,764 
Net income (loss)— — — — (24,440)— (24,440)101 (24,339)
Other comprehensive income (loss)— — — — — (8,379)(8,379)— (8,379)
Balance, April 3, 202151,526 $515 $295,287 $ $179,258 $(67,279)$407,781 $1,043 $408,824 

See notes to the unaudited condensed consolidated financial statements.

7




FOSSIL GROUP, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
UNAUDITED
IN THOUSANDS
For the 13 Weeks Ended April 2, 2022For the 13 Weeks Ended April 3, 2021
Operating Activities:  
Net Income (loss)$(21,348)$(24,339)
Adjustments to reconcile net loss to net cash provided by (used in) operating activities:  
Depreciation, amortization and accretion6,185 8,933 
Non-cash lease expense 20,742 23,980 
Stock-based compensation2,241 1,764 
Decrease in allowance for returns and markdowns(3,975)(5,933)
Property, plant and equipment and other long-lived asset impairment losses286 4,500 
Non-cash restructuring charges92 221 
Bad debt expense (recoveries)2,094 (1,632)
Other non-cash items 2,111 247 
Changes in operating assets and liabilities:  
Accounts receivable51,069 53,961 
Inventories(41,947)(32,612)
Prepaid expenses and other current assets(18,963)(9,237)
Accounts payable(30,097)24,717 
Accrued expenses(57,853)(48,465)
Income taxes(927)(5,214)
Operating lease liabilities(24,755)(28,740)
Net cash used in operating activities(115,045)(37,849)
Investing Activities:  
Additions to property, plant and equipment(2,530)(2,136)
Decrease in intangible and other assets251 6,267 
Proceeds from the sale of property, plant and equipment and other4 10,925 
Net cash (used in) provided by investing activities(2,275)15,056 
Financing Activities:  
Acquisition of common stock(10,000)(254)
Debt borrowings46,167 55,008 
Debt payments(4,100)(88,932)
Net cash provided by (used in) financing activities32,067 (34,178)
Effect of exchange rate changes on cash, cash equivalents, and restricted cash(3,502)(6,550)
Net decrease in cash, cash equivalents, and restricted cash(88,755)(63,521)
Cash, cash equivalents, and restricted cash:  
Beginning of period264,572 324,246 
End of period$175,817 $260,725 

See notes to the unaudited condensed consolidated financial statements.
8



FOSSIL GROUP, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
UNAUDITED
 
1. FINANCIAL STATEMENT POLICIES
Basis of Presentation. The condensed consolidated financial statements include the accounts of Fossil Group, Inc., a Delaware corporation, and its wholly and majority-owned subsidiaries (the “Company”).
The information presented herein includes the thirteen-week period ended April 2, 2022 (“First Quarter”) as compared to the thirteen-week period ended April 3, 2021 (“Prior Year Quarter”). The condensed consolidated financial statements reflect all adjustments that are, in the opinion of management, necessary to present a fair statement of the Company’s financial position as of April 2, 2022, and the results of operations for the First Quarter and Prior Year Quarter. All adjustments are of a normal, recurring nature.
Effective during fiscal year 2021, the Company made a change to the presentation of product net sales to include third-party smartwatch bands within the smartwatch product type. Third-party smartwatch bands were previously reported within the jewelry product type. The Company's historical disclosures have been recast to be consistent with its current presentation.
These interim condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements and the notes thereto included in the Annual Report on Form 10-K filed by the Company pursuant to the Securities Exchange Act of 1934, as amended (the “Exchange Act”), for the fiscal year ended January 1, 2022 (the “2021 Form 10-K”). Operating results for the First Quarter are not necessarily indicative of the results to be achieved for the full fiscal year.
The condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”), which require the Company to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the condensed consolidated financial statements and the reported amounts of revenues and expenses during the periods reported. We base our estimates on the information available at the time and various other assumptions believed to be reasonable under the circumstances, including estimates of the impact of the coronavirus (“COVID-19”) pandemic. Actual results could differ from those estimates, including the impact of the COVID-19 pandemic. The Company has not made any changes in its significant accounting policies from those disclosed in the 2021 Form 10-K.
Business. The Company is a global design, marketing and distribution company that specializes in consumer fashion accessories. Its principal offerings include an extensive line of men's and women's fashion watches and jewelry, handbags, small leather goods, belts and sunglasses. In the watch and jewelry product categories, the Company has a diverse portfolio of globally recognized owned and licensed brand names under which its products are marketed. The Company's products are distributed globally through various distribution channels, including wholesale in countries where it has a physical presence, direct to the consumer through its retail stores and commercial websites and through third-party distributors in countries where the Company does not maintain a physical presence. The Company's products are offered at varying price points to meet the needs of its customers, whether they are value-conscious or luxury oriented. Based on its extensive range of accessory products, brands, distribution channels and price points, the Company is able to target style-conscious consumers across a wide age spectrum on a global basis.
Operating Expenses. Operating expenses include selling, general and administrative ("SG&A"), trade name impairments, other long-lived asset impairments and restructuring charges. SG&A expenses include selling and distribution expenses primarily consisting of sales and distribution labor costs, sales distribution center and warehouse facility costs, depreciation expense related to sales distribution and warehouse facilities, the four-wall operating costs of the Company's retail stores, point-of-sale expenses, advertising expenses and art, and design and product development labor costs. SG&A also includes general and administrative expenses primarily consisting of administrative support labor and support costs such as treasury, legal, information services, accounting, internal audit, human resources, executive management costs and costs associated with stock-based compensation. Restructuring charges include costs to reorganize, refine and optimize the Company’s infrastructure and store closures. See Note 16—Restructuring for additional information on the Company’s restructuring plan.
Earnings (Loss) Per Share (“EPS”). Basic EPS is based on the weighted average number of common shares outstanding during each period. Diluted EPS adjusts basic EPS for the effects of dilutive common stock equivalents outstanding during each period using the treasury stock method.
9



The following table reconciles the numerators and denominators used in the computations of both basic and diluted EPS (in thousands, except per share data):
For the 13 Weeks Ended April 2, 2022For the 13 Weeks Ended April 3, 2021
Numerator:  
Net income (loss) attributable to Fossil Group, Inc.$(21,514)$(24,440)
Denominator: 
Basic EPS computation: 
Basic weighted average common shares outstanding51,999 51,519 
Basic EPS$(0.41)$(0.47)
Diluted EPS computation: 
Diluted weighted average common shares outstanding51,999 51,519 
Diluted EPS$(0.41)$(0.47)

At the end of the First Quarter, approximately 2.1 million weighted average shares issuable under stock-based awards were not included in the diluted EPS calculation because they were antidilutive. The total antidilutive weighted average shares included 0.3 million weighted average performance-based shares at the end of the First Quarter.
At the end of the Prior Year Quarter, 2.0 million weighted average shares issuable under stock-based awards were not included in the diluted EPS calculation because they were antidilutive. The total antidilutive weighted average shares included 0.3 million weighted average performance-based shares at the end of the Prior Year Quarter.
Cash, Cash Equivalents and Restricted Cash. Restricted cash included in intangible and other-assets net was comprised primarily of restricted cash balances for appealed tax assessments held in escrow and for pledged collateral to secure bank guarantees for the purpose of obtaining retail space. The following table provides a reconciliation of the cash, cash equivalents, and restricted cash balances as of April 2, 2022 and April 3, 2021 that are presented in the condensed consolidated statement of cash flows (in thousands):
April 2, 2022April 3, 2021
Cash and cash equivalents$162,619 $246,694 
Restricted cash included in prepaid expenses and other current assets117 6,567 
Restricted cash included in intangible and other assets-net13,081 7,464 
Cash, cash equivalents and restricted cash$175,817 $260,725 

Recently Issued Accounting Standards
In November 2021, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") 2021-10, Government Assistance (Topic 832): Disclosures by Business Entities about Government Assistance ("ASU 2021-10"). The new standard increases transparency of government assistance by focusing on the types of assistance given, an entity's accounting for the assistance, and the effect of the assistance on the entity's financial statements to allow for more comparable information for investors and other financial statement users. This standard is effective for financial statements issued for annual periods beginning after December 15, 2021, but early adoption is permitted. This standard will not have a material impact on the Company's consolidated financial statements or related disclosures.
10



In October 2021, FASB issued ASU 2021-08, Business Combinations – Accounting for Contract Assets and Contract Liabilities from Contracts with Customers ("ASU 2021-08"). The guidance is intended to improve the accounting for acquired revenue contracts with customers in a business combination by addressing diversity in practice. The guidance requires an acquirer to recognize and measure contract assets and liabilities acquired in a business combination in accordance with Topic 606 as if they had originated the contracts, as opposed to at fair value on the acquisition date. The standard will be effective for business combinations that occur after January 1, 2023. Early adoption is permitted. The guidance will be applied prospectively to acquisitions occurring on or after the effective date. While the impact of this amendment is dependent on the nature of any future transactions, the Company currently does not expect this standard to have a material impact on the Company's consolidated financial statements or related disclosures.
In March 2020, FASB issued ASU 2020-04, Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting ("ASU 2020-04") and subsequent guidance that clarified the scope and application of its original guidance. ASU 2020-04 provides optional expedients and exceptions to the current guidance on contracts, hedging relationships, and other transactions affected by reference rate reform if certain criteria are met. The amendments in this update apply only to contracts and hedging relationships that reference the London Interbank Offered Rate ("LIBOR") or another reference rate expected to be discontinued due to reference rate reform. The guidance was effective upon issuance and generally can be applied to applicable contract modifications through December 31, 2022. The Company will adopt these standards when LIBOR is discontinued and does not expect it to have a material impact on its consolidated financial statements or related disclosures.
Recently Adopted Accounting Standards
In December 2019, the FASB issued ASU 2019-12, Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes ("ASU 2019-12"). ASU 2019-12 simplifies the accounting for income taxes by removing certain exceptions to general principles in Income Taxes (Topic 740). It also clarifies and amends existing guidance to improve consistent application. The Company adopted ASU 2019-12 at the beginning of the First Quarter, and it did not have a material effect on the Company's condensed consolidated financial statements.

2. REVENUE
Disaggregation of Revenue. Due to changes in the Company’s product types as discussed in Note 1 to the Condensed Consolidated Financial Statements, product results for the Prior Year Quarter have been recast to present results on a comparable basis. The Company's revenue disaggregated by major product category and timing of revenue recognition was as follows (in thousands):
For the 13 Weeks Ended April 2, 2022
AmericasEuropeAsiaCorporate Total
Product type
Watches:
     Traditional watches$115,902 $81,149 $64,363 $13 261,427 
     Smartwatches$17,272 $12,686 $8,024 $2 37,984 
Total watches$133,174 $93,835 $72,387 $15 $299,411 
Leathers19,236 7,369 7,580  34,185 
Jewelry7,936 21,135 5,625  34,696 
Other 1,581 2,212 1,176 2,592 7,561 
Consolidated $161,927 $124,551 $86,768 $2,607 $375,853 
Timing of revenue recognition
Revenue recognized at a point in time $161,594 $124,300 $86,608 $1,164 $373,666 
Revenue recognized over time 333 251 160 1,443 2,187 
Consolidated$161,927 $124,551 $86,768 $2,607 $375,853 

11



For the 13 Weeks Ended April 3, 2021
AmericasEuropeAsiaCorporate Total
Product type
Watches:
Traditional watches$95,336 $71,006 $76,088 $ $242,430 
Smartwatches$29,224 $13,674 $10,017 $3 $52,918 
Total watches$124,560 $84,680 $86,105 $3 $295,348 
Leathers19,629 6,305 8,170  34,104 
Jewelry6,962 16,266 2,909  26,137 
Other 1,355 1,983 1,456 2,659 7,453 
Consolidated $152,506 $109,234 $98,640 $2,662 $363,042 
Timing of revenue recognition
Revenue recognized at a point in time $152,045 $108,887 $98,540 $907 $360,379 
Revenue recognized over time 461 347 100 1,755 2,663 
Consolidated$152,506 $109,234 $98,640 $2,662 $363,042 
Contract Balances. As of April 2, 2022, the Company had no material contract assets on the Company's condensed consolidated balance sheets and no deferred contract costs. The Company had contract liabilities of (i) $5.8 million and $4.9 million as of April 2, 2022 and January 1, 2022, respectively, related to remaining performance obligations on licensing income, (ii) $3.0 million as of both April 2, 2022 and January 1, 2022, primarily related to remaining performance obligations on wearable technology products and (iii) $3.5 million and $3.6 million as of April 2, 2022 and January 1, 2022, respectively, related to gift cards issued.


3. INVENTORIES
Inventories consisted of the following (in thousands):
April 2, 2022January 1, 2022
Components and parts$27,761 $23,668 
Work-in-process621 2 
Finished goods357,449 323,180 
Inventories$385,831 $346,850 

12



4. WARRANTY LIABILITIES
The Company’s warranty liability is recorded in accrued expenses-other in the Company’s condensed consolidated balance sheets. Warranty liability activity consisted of the following (in thousands):
For the 13 Weeks Ended April 2, 2022For the 13 Weeks Ended April 3, 2021
Beginning balance$19,159 $21,916 
Settlements in cash or kind(2,905)(2,725)
Warranties issued and adjustments to preexisting warranties (1)
1,652 1,589 
Ending balance$17,906 $20,780 
_______________________________________________
(1) Changes in cost estimates related to preexisting warranties are aggregated with accruals for new standard warranties issued and foreign currency changes.
 
5. INCOME TAXES
The Company’s income tax (benefit) expense and related effective rates were as follows (in thousands, except percentage data):
For the 13 Weeks Ended April 2, 2022For the 13 Weeks Ended April 3, 2021
Income tax (benefit) expense$4,687 $2,117 
Effective tax rate(28.1)%(9.5)%
The effective tax rate in the First Quarter was unfavorable as compared to the Prior Year Quarter due to the accrual of foreign income tax on a higher level of foreign profits coupled with no U.S. benefit on a higher level of U.S. net operating loss (“NOL”). The First Quarter tax rate is negative because foreign income tax expense is accrued on certain foreign entities with positive taxable income when the consolidated results are a loss. The overall tax rate is impacted by the Global Intangible Low-Taxed Income (“GILTI”) provision of the Tax Cuts and Jobs Act which requires the inclusion of certain foreign income in the tax return which absorbs all of the U.S. NOL. Foreign income taxes are also paid on this same foreign income, resulting in double taxation.

The effective tax rate can vary from quarter-to-quarter due to changes in the Company's global mix of earnings, the resolution of income tax audits and changes in tax law.
As of April 2, 2022, the Company's total amount of unrecognized tax benefits, excluding interest and penalties, was $29.2 million, of which $24.2 million would favorably impact the effective tax rate in future periods, if recognized. The Company is subject to examinations in various state and foreign jurisdictions for its 2012-2020 tax years, none of which the Company believes are significant, individually or in the aggregate. Tax audit outcomes and timing of tax audit settlements are subject to significant uncertainty.
The Company has classified uncertain tax positions as long-term income taxes payable, unless such amounts are expected to be settled within twelve months of the condensed consolidated balance sheet date. As of April 2, 2022, the Company had recorded $12.3 million of unrecognized tax benefits, excluding interest and penalties, for positions that are expected to be settled within the next twelve months. Consistent with its past practice, the Company recognizes interest and/or penalties related to income tax overpayments and income tax underpayments in income tax expense and income taxes receivable/payable. At April 2, 2022, the total amount of accrued income tax-related interest included in the condensed consolidated balance sheets was $8.5 million. There was no accrued tax-related penalties. For the First Quarter, the Company accrued income tax related interest expense of $0.3 million.

6. STOCKHOLDERS’ EQUITY
Common and Preferred Stock. The Company has 100,000,000 shares of common stock, par value $0.01 per share, authorized, with 51,156,552 and 52,145,738 shares issued and outstanding at April 2, 2022 and January 1, 2022, respectively.
13



The Company has 1,000,000 shares of preferred stock, par value $0.01 per share, authorized, with none issued or outstanding at April 2, 2022 or January 1, 2022. Rights, preferences and other terms of preferred stock will be determined by the Board of Directors at the time of issuance.
Common Stock Repurchase Programs. Purchases of the Company’s common stock are made from time to time pursuant to its repurchase programs, subject to market conditions and at prevailing market prices, through the open market. Repurchased shares of common stock are recorded at cost and become authorized but unissued shares which may be issued in the future for general corporate or other purposes. The Company may terminate or limit its stock repurchase program at any time. In the event the repurchased shares are cancelled, the Company accounts for retirements by allocating the repurchase price to common stock, additional paid-in capital and retained earnings.

The repurchase price allocation is based upon the equity contribution associated with historical issuances. The repurchase programs are conducted pursuant to Rule 10b-18 of the Exchange Act.

During the First Quarter, the Company effectively retired 1.0 million shares of common stock repurchased under its repurchase programs. The effective retirement of repurchased common stock decreased common stock by $10,000, additional paid-in capital by $0.5 million, retained earnings by $9.5 million and treasury stock by $10.0 million. At April 2, 2022 and January 1, 2022, all treasury stock had been effectively retired. As of April 2, 2022, the Company had $20.0 million of repurchase authorizations remaining under its repurchase program.

The following table reflects the Company's common stock repurchase activity for the periods indicated (in millions):


For the 13 Weeks Ended April 2, 2022For the 13 Weeks Ended April 3, 2021
Fiscal Year
Authorized
Dollar Value
Authorized
Termination DateNumber of
Shares
Repurchased
Dollar Value
Repurchased
Number of
Shares
Repurchased
Dollar Value
Repurchased
2010$30.0 None1.0$10.0  $ 

7. EMPLOYEE BENEFIT PLANS
Stock-Based Compensation Plans. The following table summarizes stock options and stock appreciation rights activity during the First Quarter:
Stock Options and Stock Appreciation RightsSharesWeighted-
Average
Exercise Price
Weighted-
Average
Remaining
Contractual
Term
Aggregate
Intrinsic
Value
 (in Thousands) (in Years)(in Thousands)
Outstanding at January 1, 2022282 $72.34 1.5$ 
Granted  
Exercised   
Forfeited or expired(76)123.20 
Outstanding at April 2, 2022206 53.67 1.7 
Exercisable at April 2, 2022206 $53.67 1.7$ 
 
The aggregate intrinsic value shown in the table above is based on the exercise price for outstanding and exercisable options/rights at April 2, 2022.
14



Stock Options and Stock Appreciation Rights Outstanding and Exercisable. The following tables summarize information with respect to stock options and stock appreciation rights outstanding and exercisable at April 2, 2022:
Stock Options OutstandingStock Options Exercisable
Range of
Exercise Prices
Number of
Shares
Weighted-
Average
Exercise
Price
Weighted-
Average
Remaining
Contractual
Term
Number of
Shares
Weighted-
Average
Exercise
Price
 (in Thousands) (in Years)(in Thousands) 
$131.46 - $131.46
5 $131.46 0.045 $131.46 
Total5 $131.46 0.045 $131.46 

Stock Appreciation Rights OutstandingStock Appreciation Rights Exercisable
Range of
Exercise Prices
Number of
Shares
Weighted-
Average
Exercise
Price
Weighted-
Average
Remaining
Contractual
Term
Number of
Shares
Weighted-
Average
Exercise
Price
 (in Thousands) (in Years)(in Thousands) 
$29.49 - $47.99
146 $40.92 2.04146 $40.92 
$55.04 - $82.55
48