BALANCE SHEET DETAIL



In thousands	December 31, 2015			December 31, 2014
Inventories, net:
Raw materials	$	24,898		$	17,848
Work-in-process	18,284			12,377
Finished products	22,216			21,634
Total (net of reserves)	$	65,398		$	51,859
Property, plant, and equipment, net
Machinery and equipment	$	46,369		$	44,600
Leasehold improvements	15,603			15,472
Office equipment and furniture	14,619			14,394
	76,591			74,466
Accumulated depreciation and amortization	(59,311		)	(53,540		)
Total	$	17,280		$	20,926
Other assets:
Deferred compensation plan assets	4,341			4,085
Demonstration and laboratory equipment	5,022			6,296
Other	996			636
Total	$	10,359		$	11,017
Accrued expenses:
Accrued payroll-related liabilities	$	6,417		$	6,619
Warranty accrual	1,586			1,501
Capital lease, current portion	831			796
Advanced billings	543			202
Other	2,769			2,184
Total	$	12,146		$	11,302
Other Liabilities:
Deferred compensation plan liabilities	$	5,247		$	4,919
Income tax payable - long term	2,523			2,526
Asset retirement obligations	2,540			2,397
Postretirement benefits obligation	2,231			2,255
Capital lease - long term	575			1,406
Deferred service income - long term	49			1,051
Deferred income tax liabilities - long term	—			224
Other	309			474
Total	$	13,474		$	15,252

Warranty Accrual

We generally warrant our products for a period of 12 months for new products, or three months for refurbished products, from the date of system acceptance for material and labor to repair the product; accordingly, an accrual for the estimated cost of the warranty is recorded at the time the product is shipped. Extended warranty terms, if granted, result in deferral of revenue equating to our standard pricing for similar service contracts. Recognition of the related warranty cost is deferred until product revenue is recognized. Factors that affect our warranty liability include the number of installed units, historical and anticipated rates of warranty claims, and cost per claim. We periodically assess the adequacy of our recorded warranty liabilities and adjust the amounts as necessary.

Changes in our product liability are as follows:



In thousands	December 31, 2015			December 31, 2014
Balance, beginning of year	$	1,501		$	1,142
Liabilities accrued for warranties issued	1,896			1,789
Warranty claims paid and utilized	(2,155		)	(2,001		)
Changes in accrued warranty liabilities	344			571
Balance, end of year	$	1,586		$	1,501

Deferred Service Income

We sell service contracts for which revenue is deferred and recognized ratably over the contract period (for time based service contracts) or as service hours are delivered (for contracts based on a purchased quantity of hours). Changes in our deferred service revenue are as follows:



In thousands	December 31, 2015			December 31, 2014
Balance, beginning of year	$	5,233		$	5,499
Service contracts billed during year	3,244			4,093
Service contract revenue recognized during year	(4,466		)	(4,359		)
Balance, end of year	$	4,011		$	5,233

Balance sheet classification
Service contracts classified as short-term	$	3,962		$	4,182
Service contracts classified as long-term	49			1,051
Balance, end of year	$	4,011		$	5,233

Asset Retirement Obligations

In accordance with ASC 410, Asset Retirement and Environmental Obligations, an entity is required to recognize a liability for the fair value of a conditional asset retirement obligation (“ARO”) if the fair value of the liability can be reasonably estimated, even if conditional on a future event. The ARO liability is principally for estimable retirement obligations related to remediation costs, which we estimate will be incurred upon the expiration of certain operating leases.

The following table sets forth an analysis of the ARO activity for the years ended December 31, 2015 and 2014:



In thousands	2015		2014
Balance as of January 1	$	2,397	$	2,248
Accretion expense	143		136
Liabilities incurred	—		13
Balance as of December 31	$	2,540	$	2,397

Advanced Billings

On occasion, we require, or our customers pay, a deposit in advance of order shipment. These amounts are classified as advanced billings until the related order ships. At December 31, 2015, we have received $0.5 million in advanced billings from our customers and $0.2 million at December 31, 2014.