Warranty Reserve. We generally do not independently provide warranties on the products that we sell. Instead, in almost all cases, the manufacturers of the products that we sell warrant the products and allow us to return defective products, including those that have been returned to us by our customers. However, we sell a line of portable generators under a product supply arrangement which obligates us to provide warranty services for these products and to share the costs of providing those services with the manufacturer. The warranty provision is recorded as a component of costs of products sold in the condensed consolidated statements of operations.

Accrued warranty expense, which is included in accrued liabilities on the condensed consolidated balance sheets, as of March 31, 2012 and 2011, is as follows (in thousands):


	2012			2011
Accrued warranty balance – January 1,	$	564		$	469
Warranty costs incurred		(292	)		(162	)
Provision for warranty		280			173

Accrued warranty balance – March 31,	$	552		$	480