NOTE 11: GUARANTOR OBLIGATIONS, COMMITMENTS, CONTINGENCIES AND CONCENTRATIONS

Warranty Expense

The Company’s equipment is generally shipped with a one-year warranty against manufacturing defects. The Company establishes reserves for estimated warranty expense when revenue for the related equipment is recognized. The reserve for estimated warranty expense is based upon historical experience and management’s estimate of future expenses.

The following table reflects the reserve for product warranty which is included in accrued expenses and other current liabilities on the Consolidated Balances Sheets as of fiscal 2011, 2010, and 2009:

	Fiscal
(in thousands)	2011			2010			2009
Reserve for product warranty, beginning of year	$	2,657		$	1,003		$	918
Orthodyne warranty reserve at the date of acquisition		-			-			150
Provision for product warranty expense		2,914			3,842			2,297
Product warranty costs incurred		(3,326	)		(2,188	)		(2,362	)
Reserve for product warranty, end of year	$	2,245		$	2,657		$	1,003

Other Commitments and Contingencies

The following table reflects operating lease obligations not reflected on the Consolidated Balance Sheet as of October 1, 2011:

			Payments due by fiscal year
(in thousands)	Total		2012		2013		2014		2015		2016 and thereafter
Operating lease obligations	$	31,958	$	10,110	$	7,579	$	2,905	$	2,608	$	8,756

The Company has minimum rental commitments under various leases (excluding taxes, insurance, maintenance and repairs, which are also paid by the Company) primarily for various facility and equipment leases, which expire periodically through 2018 (not including lease extension options, if applicable).

As of October 1, 2011, the Company accrued $14.8 million as an adjustment to goodwill related to its Earnout, which was paid subsequent to year end during October 2011. No further payments related to the Orthodyne acquisition are owed.

Concentrations

The following table reflects significant customer concentrations for fiscal 2011, 2010, and 2009:

	Fiscal
	2011			2010			2009
Customer net revenue as a percentage of total Net Revenue

Advanced Semiconductor Engineering		21.8	%		23.0	%		17.7	%
Siliconware Precision Industries, Ltd.		*			10.3	%		*

Customer accounts receivable as a percentage of total Accounts Receivable

Siliconware Precision Industries, Ltd.		15.0	%		19.5	%		*
Haoseng Industrial Co., Ltd.		14.0	%		11.0	%		*
Advanced Semiconductor Engineering		*			*			32.4	%
Amkor Technology, Inc.		*			*			11.6	%

* Represents less than 10% of net revenue or total accounts receivable, as applicable.