ACCRUED EXPENSES

9 Months Ended

Sep. 30, 2014

ACCRUED EXPENSES [Abstract]

ACCRUED EXPENSES

9.ACCRUED EXPENSES

Accrued expenses consist of the following (dollars in thousands):

	September 30,		December 31,
	2014		2013
Sales commissions	$	2,922	$	1,431
Subcontracting labor		2,014		2,406
Salaries, bonuses and related benefits		23,592		13,674
Litigation reserve		-		723
Warranty accrual		3,623		-
Other		12,400		4,208
	$	44,551	$	22,442

Warranty Accrual - Power Solutions generally offers its customers a standard two-year warranty on power products sold, although warranty periods may vary by product type and application. The Company reviews its warranty liability quarterly based on an analysis of actual expenses and failure rates by specific product lines and estimated future costs and projected failure rate trends by specific product lines. Factors taken into consideration when evaluating the Company's warranty reserve are (i) historical claims for each product, (ii) the maturity of the product within its life cycle, (iii) volume increases, (iv) life of warranty, (v) historical warranty repair costs and (vi) other factors. To the extent that actual experience differs from our estimate, the provision for product warranties will be adjusted in future periods. Actual warranty repair costs are charged against the reserve balance as incurred.

A tabular presentation of the activity within the warranty accrual account for the period from the acquisition date of Power Solutions through September 30, 2014 is presented below (in thousands):

	September 30,
	2014
Beginning balance as of June 19, 2014	$	4,111
Charges and costs accrued		859
Adjustments related to pre-existing warranties (including changes in estimates)		(35	)
Less repair costs incurred		(1,377	)
Currency translation		(43	)
Ending balance as of September 30, 2014	$	3,515