Product Warranties

6 Months Ended

Jun. 30, 2011

8. Product Warranties

The Company generally offers a two-year warranty for all of its products. The Company provides for the estimated cost of product warranties at the time product revenue is recognized. Factors that affect the Company’s warranty reserves include the number of units sold, historical and anticipated rates of warranty returns, and the cost per return. The Company periodically assesses the adequacy of the warranty reserves and adjusts the amounts as necessary. Warranty obligations are included in “Accrued expenses” in the accompanying Condensed Consolidated Balance Sheets.

Product warranty activity for the three and six months ended June 30, was as follows (in thousands):


	Three Months Ended						Six Months Ended
	June 30,						June 30,
	2011			2010			2011			2010
Balance at the beginning of the period	$	1,260		$	720		$	649		$	772
Accruals for warranties for products sold in the period		309			371			1,034			418
Fulfillment of warranty obligations		(281	)		(8	)		(409	)		(17	)
Revisions of estimated obligations		11			(45	)		25			(135	)


Balance at the end of the period	$	1,299		$	1,038		$	1,299		$	1,038

The increase in Accruals for warranties for products sold for the six months ended June 30, 2011 was primarily due to additional reserves established during the first quarter of 2011 for expected future replacements of certain products under warranty that were manufactured with a component that exhibited a higher than expected failure rate.