Kontoor Brands Inc
For the period ended Dec 30, 2023. Filed Feb 28, 2024.
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FY2023 · Filed Feb 28, 2024
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Accounts Receivable
NOTE 4 —ACCOUNTS RECEIVABLE
The following table presents components of "accounts receivable, net" recorded in the Company's balance sheets:
| (In thousands) | December 2023 | December 2022 |
|---|---|---|
| Trade | $200,911 | $221,601 |
| Royalty and other | 23,977 | 14,175 |
| Total accounts receivable | 224,888 | 235,776 |
| Less: allowance for doubtful accounts | (7,215) | (9,918) |
| Accounts receivable, net | $217,673 | $225,858 |
Allowance for Doubtful Accounts
The following table presents a rollforward of the allowance for doubtful accounts:
| (In thousands) | Year Ended December |
|---|---|
| Balance, December 2021 | $11,705 |
| Decrease in provision for expected credit losses | (44) |
| Accounts receivable balances written off | (1,375) |
| Other (1) | (368) |
| Balance, December 2022 | $9,918 |
| Decrease in provision for expected credit losses | (807) |
| Accounts receivable balances written off | (2,388) |
| Other (1) | 492 |
| Balance, December 2023 | $7,215 |
(1) Other primarily includes the impact of foreign currency translation and recoveries of amounts previously written off, none of which were individually significant.
Sale of Trade Accounts Receivable
The Company is party to an agreement with a financial institution to sell selected trade accounts receivable on a nonrecourse basis. Under this agreement, up to $377.5 million of the Company’s trade accounts receivable may be sold to the financial institution and remain outstanding at any point in time. The Company removes the sold balances from "accounts receivable, net" in its balance sheet at the time of sale. The Company does not retain any interests in the sold trade accounts receivable but continues to service and collect outstanding trade accounts receivable on behalf of the financial institution.
During 2023, 2022 and 2021, the Company sold total trade accounts receivable of $1.4 billion, $1.4 billion and $1.2 billion, respectively. As of December 2023 and December 2022, $197.7 million and $246.0 million, respectively, of the sold trade accounts receivable were no longer reflected in the Company's balance sheets but remained outstanding with the financial institution.
The funding fees charged by the financial institution for this program are reflected in the Company's statements of operations within "other expense, net" and were $12.0 million, $5.6 million and $1.8 million in 2023,2022 and 2021, respectively. Net proceeds of this program are reflected as operating activities in the Company's statements of cash flows.
Kontoor Brands, Inc. 2023 Form 10-K 61
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