Quarterly report pursuant to Section 13 or 15(d)

Reserve for Product Warranties

v3.19.2
Reserve for Product Warranties
6 Months Ended
Jun. 30, 2019
Product Warranties Disclosures [Abstract]  
Reserve for Product Warranties Reserve for Product Warranties
The Company provides a warranty for products that is generally one year in length, but in some cases regulations may require us to provide repair or remediation beyond the typical warranty period. If any of the products contain defects, the Company may incur additional repair and remediation costs. Service for domestic customers is provided by Company-owned service centers that perform all service, repair, and calibration services. Service for international customers is provided by a combination of Company-owned facilities, vendors on a contract basis, and distributors.
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. The Company considers 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 servicing is performed to honor existing warranty and regulatory obligations.
As of June 30, 2019, the Company has accrued $8.1 million for product related warranties, which includes $2.9 million of estimated costs to bring certain products into regulatory compliance. The Company's 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,
 
2019
 
2018
 
2019
 
2018
Balance, beginning of period
$
8,225

 
$
9,068

 
$
9,391

 
$
10,995

Additions charged to expense
1,639

 
2,100

 
2,248

 
2,335

Utilizations
(1,473
)
 
(255
)
 
(2,983
)
 
(1,057
)
Changes in estimate related to product remediation activities
(315
)
 

 
(571
)
 
(1,360
)
Divestiture adjustments

 

 
(9
)
 

Balance, end of period
$
8,076

 
$
10,913

 
$
8,076

 
$
10,913


The Company's estimates 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.