Warranty Reserve

9 Months Ended

Sep. 30, 2011

Warranty Reserve

6. Warranty Reserve. We generally do not independently provide warranties on the products that we distribute. Instead, in almost all cases, the manufacturers of the products that we distribute warrant the products and allow us to return defective products, including those that have been returned to us by our customers. However, we sell a line of portable generators under a product supply arrangement which obligates us to provide warranty services for these products and to share the costs of providing those services with the manufacturer. The warranty provision is recorded as a component of cots of products sold in the condensed consolidated statements of income.

Accrued warranty expense, which is included in accrued liabilities on the condensed consolidated balance sheets, as of September 30, 2011 and 2010 is as follows (in thousands):

	September 30, 2011			September 30, 2010
Accrued warranty balance – December 31, 2010	$	469		$	358
Warranty costs incurred		(528	)		(491	)
Provision for warranty		538			687
Accrued warranty balance – September 30, 2011	$	479		$	554