12. Commitments and Contingencies

The Company leases its facilities, certain equipment, and automobiles under non-cancelable operating lease agreements. Those lease agreements existing as of December 31, 2016 expire at various dates during the next five years.

The Company recognized rent expense of $1.5 million and $1.8 million for the years ended December 31, 2016 and 2015, respectively, in its consolidated statements of operations.

The following table summarizes the Company’s principal contractual commitments, excluding the financial liabilities and long-term payment obligation, as of December 31, 2016 (in thousands):

	Operating Leases		Purchase Commitments		Other Contractual Commitments		Total
2017	$	1,291	$	8,554	$	29	$	9,874
2018		635		80		—		715
2019		460		—		—		460
2020		260		—		—		260
2021		2		—		—		2
Thereafter		—		—		—		—
Total	$	2,649	$	8,634	$	29	$	11,311

Purchase commitments for inventories are highly dependent upon forecasts of customer demand. Due to the uncertainty in demand from its customers, the Company may have to change, reschedule, or cancel purchases or purchase orders from its suppliers. These changes may lead to vendor cancellation charges on these purchases or contractual commitments.

The Company provides warranties on certain product sales for periods ranging from 12 to 24 months, and allowances for estimated warranty costs are recorded during the period of sale. The determination of such allowances requires the Company to make estimates of product return rates and expected costs to repair or to replace the products under warranty. The Company currently establishes warranty reserves based on historical warranty costs for each product line combined with liability estimates based on the prior 12 months’ sales activities. If actual return rates and/or repair and replacement costs differ significantly from the Company’s estimates, adjustments to recognize additional cost of sales may be required in future periods. Historically the warranty accrual and the expense amounts have been immaterial.