ACCRUED WARRANTY

3 Months Ended

Sep. 30, 2012

NOTE 7—ACCRUED WARRANTY

The Company offers warranties on certain products, generally for a period of one year, and records a liability for the estimated future costs associated with potential warranty claims. The warranty costs are reflected in the Company’s consolidated statement of operations within cost of revenues. The warranties are typically in effect for 12 months from the distributor’s purchase date of the product. The Company’s estimate of future warranty costs is largely based on historical experience factors including product failure rates, material usage, and service delivery cost incurred in correcting product failures. In certain circumstances, the Company may have recourse from its contract manufacturers for replacement cost of defective products, which it also factors into its warranty liability assessment.

Warranty obligations, included in other current liabilities, were as follows (in thousands):


	Three Months Ended September 30,
	2012			2011
Beginning balance	$	1,381		$	806
Accruals for warranties issued during the period		958			519
Warranty costs incurred during the period		(574	)		(326	)

	$	1,765		$	999