PRODUCT WARRANTIES

9 Months Ended

Feb. 29, 2012

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 nine months ended February 29, 2012 and February 28, 2011 (in thousands):

	Three Months Ended						Nine Months Ended
	February 29,			February 28,			February 29,			February 28,
	2012			2011			2012			2011
Balance at the beginning of the period	$	129		$	97		$	103		$	174
Accruals for warranties issued
during the period		35			26			176			86
Adjustments related to pre-existing
warranties (including changes in     estimates)		--			--			--			(88	)
Settlement made during the period
(in cash or in kind)		(52	)		(41	)		(167	)		(90	)
Balance at the end of the period	$	112		$	82		$	112		$	82

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