CONTINGENT LIABILITIES AND COMMITMENTS

6 Months Ended

Jun. 30, 2012

CONTINGENT LIABILITIES AND COMMITMENTS

CONTINGENT LIABILITIES AND COMMITMENTS

NOTE 7: CONTINGENT LIABILITIES AND COMMITMENTS

The Company is currently involved in matters of litigation, including environmental contingencies, arising in the ordinary course of business.  The Company accrues for such matters when expenditures are probable and reasonably estimable.  Based upon information presently known, management is of the opinion that such litigation, either individually or in the aggregate, will not have a material adverse effect on the Company’s consolidated financial position, results of operations, or cash flows.

At June 30, 2012, the Company employed a total of 3,123 people.  Approximately 12.6% of the employees are represented by unions.  The Grand Rapids, Michigan plant is the only unionized plant within the U.S and has an agreement with the Carpenters Union, Local 1615, of the United Brotherhood of Carpenters and Joiners of America, Affiliate of the Carpenters Industrial Council (the “Union”), covering approximately 197 hourly employees. The Collective Bargaining Agreement expires April 30, 2015.  Certain workers in the facilities in Italy are also represented by unions.

The Company offers a warranty for all of its products.  The specific terms and conditions of those warranties vary depending upon the product.  The Company estimates the costs that may be incurred under its warranties and records a liability in the amount of such costs at the time product revenue is recognized.  Factors that affect the Company’s liability include historical product-failure experience and estimated repair costs for identified matters for each specific product category.  The Company periodically assesses the adequacy of its recorded warranty liabilities and adjusts the amounts as necessary.

Changes in the warranty reserves for periods indicated are as follows:

	June 30, 2012
	(in thousands)
Balance, beginning of the year	$	8,146
Provision for warranty claims	3,127
Warranty claims paid	(3,434		)
Increase due to acquisition	106
Exchange rate impact	(20		)
Balance, end of the period	$	7,925

Warranty expense for the three months ended June 30, 2012 and 2011 was $1.4 million and $1.6 million, respectively. Warranty expense for the six months ended June 30, 2012 and 2011 was $3.1 million and $3.2 million, respectively.