Reserve for Product Warranties

6 Months Ended

Jun. 30, 2020

Product Warranties Disclosures [Abstract]

We provide a warranty for products that is generally one year in length. In some cases, regulations may require us to provide repair or remediation beyond the typical warranty period. If any of the products contain defects, we may incur additional repair and remediation costs. Service, repair and calibration services are provided by a combination of our owned facilities and vendors on a contract basis.

We accrue estimated product warranty costs at the time of sale based on historical experience. A warranty reserve is included in accrued liabilities for the expected future costs of servicing products. Additions to the reserve are based on management’s best estimate of probable liability. We consider a combination of factors including material and labor costs, regulatory requirements, and other judgments in determining the amount of the reserve. The reserve is reduced as costs are incurred to honor existing warranty and regulatory obligations.

As of June 30, 2020, we have accrued $5.7 million for product related warranties. Our estimate of these costs is primarily based upon the number of units outstanding that may require repair and costs associated with shipping.

The details of activity in the warranty reserve are as follows (in thousands):


	Three Months Ended June 30,						Six Months Ended June 30,
	2020		2019		2020		2019
Balance, beginning of period	$	5,837	$	8,225	$	6,404	$	9,391

Additions charged to expense	575		1,639		1,280		2,248
Utilizations	(729)		(1,473)		(2,001)		(2,983)
Changes in estimate related to product remediation activities	—		(315)		—		(571)
Divestiture adjustments	—		—		—		(9)
Balance, end of period	$	5,683	$	8,076	$	5,683	$	8,076

Our estimate of future product warranty costs may vary from actual product warranty costs, and any variance from estimates could impact our cost of sales, operating profits and results of operations.