Other Financial Statement Data

9 Months Ended

Sep. 30, 2020

Balance Sheet Related Disclosures [Abstract]

Other Financial Statement Data

9. OTHER FINANCIAL STATEMENT DATA:

Inventories consisted of the following:

(In thousands)	September 30, 2020		December 31, 2019
Raw materials and purchased parts	$	12,428	$	9,845
Work in process	2,236		1,837
Finished goods	5,408		2,373
Demonstration inventories, net	1,213		1,525
Total inventories	$	21,285	$	15,580

Excess and obsolete inventories were written down by $656,000 at September 30, 2020 and $649,000 at December 31, 2019. Demonstration inventories are stated at cost less accumulated amortization, generally based on a 36 month useful life. Accumulated amortization for demonstration inventories totaled $2.6 million at September 30, 2020 and $2.4 million at December 31, 2019.

Accrued expenses consisted of the following:

(In thousands)	September 30, 2020		December 31, 2019
Wages and benefits	$	2,544	$	1,319
Warranty liability	784		761
Income taxes payable	199		333
Other	158		159
Total accrued expenses	$	3,685	$	2,572

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 cost of materials used in correcting product failures and service delivery expenses incurred to make these corrections. 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:

	Nine Months Ended September 30,
(In thousands)	2020			2019
Balance at beginning of period	$	798		$	789
Accrual for warranties	726			713
Warranty revision	(21		)	(7		)
Settlements made during the period	(683		)	(626		)
Balance at end of period	820			869
Current portion of estimated warranty liability	(784		)	(843		)
Long-term estimated warranty liability	$	36		$	26

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:

	Nine Months Ended September 30,
(In thousands)	2020			2019
Balance at beginning of period	$	275		$	218
Revenue deferrals	382			352
Amortization of deferred revenue	(269		)	(335		)
Total deferred warranty revenue	388			235
Current portion of deferred warranty revenue	(274		)	(182		)
Long-term deferred warranty revenue	$	114		$	53