Warranty Reserve

9 Months Ended

Sep. 30, 2012

Warranty Reserve. We generally do not independently provide warranties on the products that we sell. Instead, in most instances, the manufacturers of the products that we sell 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 service for these products and to share the costs of providing those services with the manufacturer. We maintain a reserve for warranty claims against which the warranty costs we incur are charged. We replenish or make additions to the reserve from time to time, based primarily on our warranty claims experience and the volume of generators we sell, by a provision we make for warranty claims, recorded as a component of costs of products sold, in the condensed consolidated statements of income.

The following table sets forth, in thousands, the accrued warranty expense that is included in accrued liabilities on the condensed consolidated balance sheets as of September 30, 2012 and 2011:


	2012			2011
Accrued warranty balance – January 1,	$	564		$	469
Warranty costs incurred		(895	)		(528	)
Provision for warranty		1,024			538

Accrued warranty balance – September 30,	$	693		$	479