PRODUCT WARRANTIES

6 Months Ended

Nov. 30, 2011

Notes to Financial Statements

PRODUCT WARRANTIES

8. PRODUCT WARRANTIES

The Company provides for the estimated cost of product warranties at the time the products are shipped. While the Company engages in extensive product quality programs and processes, including actively monitoring and evaluating the quality of its component suppliers, the Company’s warranty obligation is affected by product failure rates, material usage and service delivery costs incurred in correcting a product failure. Should actual product failure rates, material usage or service delivery costs differ from the Company’s estimates, revisions to the estimated warranty liability would be required.

The standard warranty period is ninety days for parts and service and one year for systems.

Following is a summary of changes in the Company's liability for product warranties during the three and six months ended November 30, 2011 and 2010 in thousands):

	Three Months Ended						Six Months Ended
	November 30,						November 30,
	2011			2010			2011			2010
Balance at the beginning of the period	$	100		$	94		$	103		$	174
Accruals for warranties issued		86			39			141			60
during the period
Adjustments related to pre-existing
warranties (including changes in estimates)		—			—			—			(88	)
Settlement made during the period
(in cash or in kind)		(57	)		(36	)		(115	)		(49	)
Balance at the end of the period	$	129		$	97		$	129		$	97

The accrued warranty balance is included in accrued expenses on the accompanying condensed consolidated balance sheets.