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Liability for Warranty Returns
6 Months Ended
Jun. 30, 2019
Product Warranties Disclosures [Abstract]  
Liability for Warranty Returns

15. LIABILITY FOR WARRANTY RETURNS

Our products generally include warranties of 90 days to five years for product defects. We accrue for warranty returns at the time revenue is recognized based on our estimate of the cost to repair or replace the defective products. We engage in extensive product quality programs and processes, including actively monitoring and evaluating the quality of our component suppliers. Our products continue to become more complex in both size and functionality as many of our product offerings migrate from line card applications to total systems. The increasing complexity of our products will cause warranty incidences, when they arise, to be more costly. Our estimates regarding future warranty obligations may change due to product failure rates, material usage and other rework costs incurred in correcting a product failure. In addition, from time to time, specific warranty accruals may be recorded if unforeseen problems arise. Should our actual experience relative to these factors be worse than our estimates, we will be required to record additional warranty expense. Alternatively, if we provide for more reserves than we require, we will reverse a portion of such provisions in future periods. The liability for warranty obligations totaled $9.0 million and $8.6 million at June 30, 2019 and December 31, 2018, respectively, which amounts are included in accrued expenses in the accompanying Condensed Consolidated Balance Sheets.

 

A reconciliation of the beginning and ending warranty accrual for the three and six months ended June 30, 2019 and 2018 is as follows:

 

 

 

Three Months Ended

 

 

Six Months Ended

 

 

 

June 30,

 

 

June 30,

 

(In thousands)

 

2019

 

 

2018

 

 

2019

 

 

2018

 

Warranty accrual at beginning of period

 

$

8,802

 

 

$

9,687

 

 

$

8,623

 

 

$

9,724

 

Plus: Amounts charged to expense

 

 

1,849

 

 

 

4,860

 

 

 

2,980

 

 

 

6,683

 

Less: Deductions

 

 

(1,679

)

 

 

(4,436

)

 

 

(2,631

)

 

 

(6,296

)

Warranty accrual at end of period

 

$

8,972

 

 

$

10,111

 

 

$

8,972

 

 

$

10,111