Note 8 - Guarantees

6 Months Ended

Jun. 27, 2015

Commitments Contingencies and Guarantees [Text Block]

8.	Guarantees

Our products are generally sold with warranty periods that range from 12 to 36 months following sale or acceptance. Parts and labor are covered under the terms of the warranty agreement. The warranty provision is based on historical and projected experience by product and configuration. Changes in accrued warranty were as follows

(

in thousands

)

	Three Months Ended						Six Months Ended
	June 27,			June 28,			June 27,			June 28,
	2015			2014			2015			2014
Balance at beginning of period	$	5,351		$	4,408		$	5,848		$	4,673
Warranty expense accruals		1,928			1,065			3,195			2,242
Warranty payments		(2,067	)		(1,229	)		(3,831	)		(2,671	)
Balance at end of period	$	5,212		$	4,244		$	5,212		$	4,244

Accrued warranty amounts expected to be incurred after one year are included in non-current other accrued liabilities in the condensed consolidated balance sheet.

These amounts total $1.9 million at June 27, 2015 and $1.1 million at December 27, 2014. Prior-period long-term accrued warranty amounts have been reclassified to a long term liability in the December 31, 2014 balance sheet to conform to the current period presentation. This reclassification had no effect on previously reported net income and is considered immaterial.

From time-to-time, during the ordinary course of business, we provide standby letters of credit for certain contingent liabilities under contractual arrangements, including customer contracts. As of June 27, 2015, the maximum potential amount of future payments that Cohu could be required to make under these standby letters of credit was approximately $0.2 million. We have not recorded any liability in connection with these guarantee arrangements beyond that required to appropriately account for the underlying transaction being guaranteed. We do not believe, based on historical experience and information currently available, that it is probable that any amounts will be required to be paid under these arrangements.