Warranty Reserve

3 Months Ended

Jan. 31, 2016

(6)Warranty Reserve

Sales of the Company’s equipment are subject to a warranty obligation. Equipment warranties typically extend for a period of twelve months from the date of installation. Standard warranty terms are included in customer contracts. Under the terms of these warranties, the Company is obligated to repair or replace any components or assemblies that it deems defective in workmanship or materials. The Company reserves the right to reject warranty claims if it determines that failure is due to normal wear, customer modifications, improper maintenance or misuse. The Company maintains a warranty reserve that reflects the estimated expenses it will incur to honor the warranties on its products. The Company adjusts the warranty reserve based on the number and type of equipment subject to warranty and the remaining months of warranty coverage. The warranty reserve adjustment reflects the Company’s historical warranty experience based on the type of equipment.

Warranty provisions and claims for the three months ended January 31, 2016 and 2015 were as follows:


					Year ended October 31,
(In thousands)	2016		2015
Balance, beginning of period	$	147	$	109
Warranty provision based on units sold		71		43
Periodic reserve adjustments		12		(25)
Warranty claims		(68)		(24)
Balance, end of period	$	162	$	103