WARRANTY RESERVE

9 Months Ended

Oct. 31, 2015

NOTE 4—WARRANTY RESERVE

The Company provides warranties for both its merchandise sales and service labor. Warranties for merchandise are generally covered by the respective vendors, with the Company covering any costs above the vendor’s stipulated allowance. Service labor is warranted in full by the Company for a limited specific time period. The Company establishes its warranty reserves based on historical experiences. These costs are included in either costs of merchandise sales or costs of service revenues in the consolidated statements of operations.

The reserve for warranty cost activity for the thirty-nine weeks ended October 31, 2015 and the fifty-two weeks ended January 31, 2015 is as follows:

(dollar amounts in thousands)	October 31, 2015			January 31, 2015
Beginning balance	$	682		$	682

Additions related to current period sales	8,798			14,435

Warranty costs incurred in current period	(8,706		)	(14,435		)


Ending balance	$	774		$	682