Other Financial Statement Data

9 Months Ended

Sep. 30, 2021

Balance Sheet Related Disclosures [Abstract]

Other Financial Statement Data

9. OTHER FINANCIAL STATEMENT DATA:

Inventories consisted of the following:

(In thousands)	September 30, 2021		December 31, 2020
Raw materials and purchased parts	$	15,174	$	11,903
Work in process	1,732		2,459
Finished goods	2,323		4,208
Demonstration inventories, net	1,448		1,701
Total inventories	$	20,677	$	20,271

Demonstration inventories are stated at cost less accumulated amortization, generally based on a 36 month useful life. Accumulated amortization for demonstration inventories totaled $2.7 million at September 30, 2021 and $2.7 million at December 31, 2020. Amortization expense related to demonstration inventories in the three and nine months ended September 30, 2021 was $175,000 and $498,000, respectively. Amortization expense related to demonstration inventories in the three and nine months ended September 30, 2020 was $171,000 and $613,000, respectively.

Accrued expenses consisted of the following: 

(In thousands)	September 30, 2021		December 31, 2020
Wages and benefits	$	3,034	$	2,768
Warranty liability	943		793
Income taxes payable	263		269
Other	113		63
Total accrued expenses	$	4,353	$	3,893

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 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)	2021			2020
Balance at beginning of period	$	839		$	798
Accrual for warranties	814			726
Warranty revision	(54		)	(21		)
Settlements made during the period	(599		)	(683		)
Balance at end of period	1,000			820
Current portion of estimated warranty liability	(943		)	(784		)
Long-term estimated warranty liability	$	57		$	36

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)	2021			2020
Balance at beginning of period	$	344		$	275
Revenue deferrals	417			382
Amortization of deferred revenue	(348		)	(269		)
Total deferred warranty revenue	413			388
Current portion of deferred warranty revenue	(298		)	(274		)
Long-term deferred warranty revenue	$	115		$	114