Other Financial Statement Data

12 Months Ended

Dec. 31, 2018

OTHER FINANCIAL STATEMENT DATA [Abstract]

OTHER FINANCIAL STATEMENT DATA

NOTE 8 – OTHER FINANCIAL STATEMENT DATA

Inventories consist of the following:

	December 31,
(In thousands)	2018		2017
Raw materials and purchased parts	$	8,821	$	7,383
Work in process	2,446		1,666
Finished goods	4,896		5,344
Total inventories	$	16,163	$	14,393

Equipment and leasehold improvements consist of the following:

	December 31,
(In thousands)	2018			2017
Equipment	$	14,983		$	14,088
Leasehold improvements	2,052			1,688
	17,035			15,776
Accumulated depreciation and amortization	(14,174		)	(13,469		)
	$	2,861		$	2,307

Depreciation and amortization expense related to equipment and leasehold improvements was $1.3 million in 2018 and $1.3 million in 2017.

Intangible assets consist of the following:

	December 31, 2018							December 31, 2017
(In thousands)	Gross Carrying Amount		Accumulated Amortization			Net		Gross Carrying Amount		Accumulated Amortization			Net
Patents	$	2,754	$	(2,533	)	$	221	$	2,687	$	(2,463	)	$	224
Software		206	(141		)	65		206		(111		)	95
Marketing assets and customer relationships		101	(54		)	47		101		(45		)	56
Non-compete agreements		101	(101		)	—		101		(96		)	5
	$	3,162	$	(2,829	)	$	333	$	3,095	$	(2,715	)	$	380

Amortization expense in 2018 and 2017 was as follows:

	Year Ended December 31,				Weighted Avg. Remaining Life-Years at December 31, 2018
(In thousands)	2018		2017
Patents	$	113	$	112	2.0
Software	30		29		2.2
Marketing assets and customer relationships	9		12		5.2
Non-compete agreements	5		25		-
	$	157	$	178

Amortization of patents has been classified as research and development expense in the accompanying consolidated statements of operations. Estimated aggregate amortization expense based on current intangible assets for the next five years is expected to be as follows: $150,000 in 2019, $119,000 in 2020, $44,000 in 2021, $9,000 in 2022 and $9,000 in 2023.

Accrued expenses consist of the following:

	December 31,
(In thousands)	2018		2017
Wages and benefits	$	2,166	$	1,328
Warranty liability	758		713
Income taxes payable	393		26
Other	251		218
	$	3,568	$	2,285

Other liabilities consist of the following:

	December 31,
(In thousands)	2018		2017
Deferred rent	$	521	$	—
Warranty liability	31		54
Contract liabilities - Topic 606	73		—
Deferred warranty revenue	4		34
	$	629	$	88

See Note 2 for additional information related to contract liabilities under Topic 606.

Warranty costs:

We provide for the estimated cost of product warranties, which cover products for periods ranging from one to three years, at the time revenue is recognized. While we engage in extensive product quality programs and processes, including actively monitoring and evaluating the quality of components provided by suppliers, warranty obligations do arise. These obligations are affected by product failure rates, the costs of materials used and service delivery expenses incurred in correcting a product failure. If actual product failure rates and material or service delivery costs differ from our estimates, revisions to the estimated warranty liability are required and could be material. At the end of each reporting period, we revise our estimated warranty liability based on these factors. The current portion of our warranty liability is included as a component of accrued expenses. The long-term portion of our warranty liability is included as a component of other liabilities. 

A reconciliation of the changes in our estimated warranty liability is as follows:

	Year Ended December 31,
(In thousands)	2018			2017
Balance at beginning of period	$	767		$	790
Accrual for warranties	619			582
Warranty revision	(34		)	7
Settlements made during the period	(563		)	(612		)
Balance at end of period	789			767
Current portion of estimated warranty liability	(758		)	(713		)
Long-term estimated warranty liability	$	31		$	54

Deferred warranty revenue:

The current portion of our deferred warranty revenue is included as a component of advance customer payments. The long-term portion of our deferred warranty revenue is included as a component of other liabilities. A reconciliation of the changes in our deferred warranty revenue is as follows:

	Year Ended December 31,
(In thousands)	2018			2017
Balance at beginning of period	$	259		$	346
Revenue deferrals	376			357
Amortization of deferred revenue	(417		)	(444		)
Total deferred warranty revenue	218			259
Current portion of deferred warranty revenue	(214		)	(225		)
Long-term deferred warranty revenue	$	4		$	34