NOTE E - Warranty Costs

CAD's Cross-branded writing instruments are sold with a full warranty of unlimited duration against mechanical failure. CAD's accessories are sold with a one-year warranty against mechanical failure and defects in workmanship and timepieces are warranted for a period of two years. Costa and Native sunglasses are sold with a lifetime warranty against defects in materials and workmanship. Estimated warranty costs are accrued at the time of sale. The most significant factors in the estimation of warranty cost liabilities include the operating efficiency and related cost of the service department, unit sales and the number of units that are eventually returned for warranty repair. The current portions of accrued warranty costs were $0.4 million at July 2, 2011 and $0.6 million January 1, 2011, and were recorded in accounts payable, accrued expenses and other liabilities. The COG segment revised their estimate of warranty liabilities in the second quarter and first six months of 2011 due to changes in estimates and assumptions. The following chart reflects the activity in aggregate accrued warranty costs:

(THOUSANDS OF DOLLARS)	THREE MONTHS ENDED		SIX MONTHS ENDED
	JULY 2, 2011	JULY 3, 2010	JULY 2, 2011	JULY 3, 2010
Accrued Warranty Costs - Beginning of Period	$1,779	$1,962	$1,998	$1,936
Warranty costs paid	(64)	(191)	(140)	(392)
Warranty costs accrued	147	227	230	454
Impact of changes in estimates and assumptions	-	-	(226)	-
Accrued Warranty Costs - End of Period	$1,862	$1,998	$1,862	$1,998