Accrued Expenses and Other Current Liabilities

The components of accrued expenses and other current liabilities consisted of the following:



	As of		As of
(in thousands)	March 31, 2013		September 30, 2012
Compensation	$	4,433	$	3,798
Warranty	5,942		3,692
Termination fee	2,775		2,775
Professional fees	1,001		938
Royalty	1,289		1,445
Customer deposits	655		2,408
Deferred revenue	4,368		6,670
Self insurance	1,328		1,155
Capital lease obligations	—		4,411
Income and other taxes	1,310		1,573
Loss on sale contracts	807		765
Severance and restructuring accruals	892		1,521
Loss on inventory purchase commitments	—		723
Other	1,305		761
Accrued expenses and other current liabilities	$	26,105	$	32,635

Customer deposits: We signed agreements with certain customers related to our Fiber Optics segment pursuant to which they have received an allocation of our finished goods inventory that was not damaged by the Thailand flood and have started to receive a percentage of output from our new production lines placed into service. As consideration, we received $6.8 million as partial prepayments for future product shipments, of which none is outstanding as of March 31, 2013.

Capital lease obligations: As of September 30, 2012, we capitalized the cost of our new manufacturing lines of approximately $5.2 million and recorded an equipment capital lease obligation of $4.4 million, net of equipment deposits. In addition, during the three and six months ended March 31,2013, we capitalized an additional $0.9 million and $1.2 million, respectively, of manufacturing lines and recorded a corresponding amount of capital lease obligations. See Note 9 - Impact from Thailand Flood for additional disclosures related to the impact of the Thailand flood on our operations.

Severance and restructuring accruals: In August 2012, Mr. Reuben Richards, Jr. proposed to the Board to step-down from his position as the Company's Executive Chairman and all other positions he held as an officer or employee of the Company and its affiliates, effective as of September 30, 2012. Mr. Richards will remain as Chairman of the Board and a member of the Board.

The Company and Mr. Richards entered into a separation agreement and general release, dated August 6, 2012 (Separation Agreement), which includes mutual releases by Mr. Richards and the Company of all claims related to Mr. Richards' employment and service relationship with, and termination of employment and service from, the Company. Under the terms of the Separation Agreement, Mr. Richards acknowledged and agreed that the restrictive covenants contained in his employment agreement would remain in full force and effect. The separation agreement provides for among other things, the continuation of his base salary for 88 weeks, benefits for 18 months, and immediate vesting of all his outstanding non-vested equity awards. These payments are not contingent upon any future service by Mr. Richards. In fiscal year 2012, we recorded a charge of $1.1 million related to Mr. Richards' separation agreement.

Our restructuring-related accrual specifically relates to the Separation Agreement and non-cancelable obligations associated with an abandoned leased facility. Expense related to severance and restructuring accruals is included in sales, general, and administrative expense on our statement of operations and comprehensive income (loss). The following table summarizes the changes in the severance and restructuring-related accrual accounts:



(in thousands)	Severance-related accruals			Restructuring-related accruals			Total
Balance as of September 30, 2012	1,105			416			1,521
Expense - charged to accrual	180			—			180
Payments and accrual adjustments	(488		)	(321		)	(809		)
Balance as of March 31, 2013	$	797		$	95		$	892

The following table summarizes the changes in our product warranty accrual accounts:



Product Warranty Accruals	For the Three Months Ended March 31,						For the Six Months Ended March 31,
(in thousands)	2013			2012			2013			2012
Balance at beginning of period	$	4,580		$	4,686		$	4,100		$	4,566
Provision for product warranty - expense	1,772			(86		)	2,401			86
Adjustments and utilization of warranty accrual	(2		)	(6		)	(151		)	(58		)
Balance at end of period	$	6,350		$	4,594		$	6,350		$	4,594
Current portion	$	5,942		$	4,186		$	5,942		$	4,186
Non-current portion	408			408			408			408
Product warranty liability at end of period	$	6,350		$	4,594		$	6,350		$	4,594

The increase in our provision for product warranty expense for the three and six months ended March 31, 2013 compared to the same periods in 2012 was a result of a specific customer warranty claim.