. WARRANTY

The Company warrants all assembled products, parts (except component products or parts on which written warranties are issued by the respective manufacturers thereof and are furnished to the original customer, as to which the Company makes

warranty and assumes

liability) and service against defective materials or workmanship. Such warranty generally extends from periods ranging from

months to

months. The Company engages in extensive product quality programs and processes, including actively monitoring and evaluating the quality of its suppliers. However, its warranty obligation is affected by product failure rates, the number of units affected by the failure and the expense involved in satisfactorily addressing the situation. The warranty reserve is established based on our best estimate of the amounts necessary to settle future and existing claims on products sold as of the balance sheet date. When evaluating the adequacy of the reserve for warranty costs, management takes into consideration the term of the warranty coverage, historical claim rates and costs of repair, knowledge of the type and volume of new products and economic trends. While we believe the warranty reserve is adequate and that the judgment applied is appropriate, such amounts estimated to be due and payable in the future could differ materially from what actually transpires. The following is a listing of the activity in the warranty reserve during the years ended

June 30:

	2018			2017

Reserve balance, July 1	$	2,062		$	3,607
Current period expense		4,998			615
Payments or credits to customers		(2,671	)		(2,179	)
Translation adjustment		18			19
Reserve balance, June 30	$	4,407		$	2,062

The current portion of the warranty accrual (

$3,952

and

$1,708

for fiscal

2018

and

2017,

respectively) is reflected in accrued liabilities, while the long-term portion (

$455

and

$354

for fiscal

2018

and

2017,

respectively) is included in other long-term liabilities on the Consolidated Balance Sheets.