Product Warranty

9 Months Ended

Sep. 30, 2016

Product Warranty

Product Warranty

Note 8.  Product Warranty

The Company generally offers a one year warranty for all of its systems, the terms and conditions of which vary depending upon the product sold. For all systems sold, the Company accrues a liability for the estimated cost of standard warranty at the time of system shipment and defers the portion of systems revenue attributable to the fair value of non-standard warranty. Costs for non-standard warranty are expensed as incurred. Factors that affect the Company’s warranty liability include the number of installed units, historical and anticipated product failure rates, material usage and service labor costs. The Company periodically assesses the adequacy of its recorded liability and adjusts the amount as necessary.

The changes in the Company’s standard product warranty liability are as follows:

	Nine months ended
	September 30,
	2016		2015
	(in thousands)
Balance at January 1 (beginning of year)	$	3,555	$	1,526
Warranties issued during the period		2,286		3,543
Settlements made during the period		(3,570)		(1,611)
Changes in estimate of liability for pre-existing warranties during the period		551		345
Balance at September 30 (end of period)	$	2,822	$	3,803
Amount classified as current	$	2,597	$	3,532
Amount classified as long-term		225		271
Total warranty liability	$	2,822	$	3,803