Product Warranty Costs

3 Months Ended

Mar. 31, 2015

Disclosure Product Warranty Liability [Abstract]

Product Warranty Costs

Product Warranty Costs

The Company provides a four-year warranty on its PDMs and may replace any OmniPods that do not function in accordance with product specifications. The Company estimates its warranty at the time the product is shipped based on historical experience and the estimated cost to service the claims. Cost to service the claims reflects the current product cost which has been decreasing over time. As these estimates are based on historical experience, and the Company continues to introduce new products and versions, the Company also considers the anticipated performance of the product over its warranty period in estimating warranty reserves.

A reconciliation of the changes in the Company’s product warranty liability is as follows (in thousands):

	Three Months Ended March 31,
	2015			2014
Balance at the beginning of the period	$	2,614		$	3,090
Warranty expense	467			693
Warranty claims settled	(420		)	(683		)
Balance at the end of the period	$	2,661		$	3,100

	As of
	March 31, 2015		December 31, 2014
Composition of balance:
Short-term	$	975	$	981
Long-term	1,686		1,633
	$	2,661	$	2,614