Current Liabilities

Deferred Services Income

A portion of our revenue is generated from service contracts. Payments from certain of these service contracts are collected in advance. As such, revenues from these service contracts are deferred and recognized ratably over the contract period for time-based service contracts, or as service hours are delivered for contracts based on a purchased quantity of hours.

Changes in our deferred service revenue were as follows:



	Three Months Ended						Six Months Ended
(In thousands)	July 4, 2015			June 28, 2014			July 4, 2015			June 28, 2014
Balance, beginning of the period	$	5,249		$	4,778		$	5,233		$	5,499
Additions	877			415			2,223			988
Revenue recognized	(1,359		)	(981		)	(2,689		)	(2,275		)
Balance, end of the period	$	4,767		$	4,212		$	4,767		$	4,212
Balance sheets classification
Deferred service income-short term	$	4,438		$	3,620
Deferred service income-long term	329			592
Balance, end of the period	$	4,767		$	4,212

Other current liabilities

Other current liabilities consisted of the following:



(In thousands)	July 4, 2015		December 31, 2014
Salaries and benefits	$	5,672	$	6,619
Warranty accrual	1,766		1,501
Advanced billings	79		202
Capital lease, current portion	817		796
Other	3,625		2,184
Balance, end of the period	$	11,959	$	11,302

Warranty Accrual

We generally warrant our new and refurbished products for material and labor to repair the product for periods of twelve months and three months, respectively, from the date of system acceptance. Accordingly, an accrual for the estimated cost of the warranty is recorded at the time the product is shipped. Extended warranty terms, if granted, result in deferral of revenue equating to our standard pricing for similar service contracts. Recognition of the related warranty cost is deferred until product revenue is recognized. Factors that affect our warranty liability include the number of installed units, historical and anticipated rates of warranty claims and cost per claim. We periodically assess the adequacy of our recorded warranty liabilities and adjust the amounts as necessary. We believe our warranty accrual as of July 4, 2015 is sufficient to satisfy our outstanding obligations as of that date.

Changes in our warranty accrual were as follows:



	Three Months Ended						Six Months Ended
(In thousands)	July 4, 2015			June 28, 2014			July 4, 2015			June 28, 2014
Balance, beginning of the period	$	1,737		$	1,055		$	1,501		$	1,142
Liabilities accrued for warranties issued	448			396			1,063			678
Warranty claims paid and utilized	(489		)	(524		)	(1,118		)	(1,002		)
Changes in accrued warranty liabilities	70			156			320			265
Balance, end of the period	$	1,766		$	1,083		$	1,766		$	1,083