Product Warranty Costs

3 Months Ended

Nov. 30, 2012

Product Warranty Costs

Note 5. Product Warranty Costs

The Company generally offers its customers a warranty on products they purchase, although warranty periods vary by product type and application. During the three months ended November 30, 2011, the warranty reserve was reduced by $5.7 million, the result of a purchase accounting adjustment to Mastervolt’s initial estimated warranty reserve. The reserve for future warranty claims is based on historical claim rates and current warranty cost experience. The following is a rollforward of the accrued product warranty reserve (in thousands):

	Three Months Ended November 30,
	2012			2011
Beginning balances	$	12,869		$	23,707
Purchase accounting adjustment		—			(5,719	)
Provision for warranties		2,417			2,491
Warranty payments and costs incurred		(3,096	)		(2,903	)
Impact of changes in foreign currency rates		271			(1,109	)
Ending balances	$	12,461		$	16,467