NOTE 8—WARRANTIES

The Company provides for anticipated warranty costs at the time the associated product revenue is recognized. Product warranty costs are estimated based upon the Company's historical experience and the applicable warranty period. The Company periodically reviews the adequacy of its warranty reserve and adjusts, if necessary, the warranty percentage and accrual based on actual experience and estimated costs to be incurred. Information in regards to the changes in the Company's product warranty liability for the nine months ended September 30, 2012 is as follows (in thousands):

Balance at December 31, 2011	$	1,500
Additions charged to cost of product sales		335
Repairs and replacements		(469	)
Balance at September 30, 2012	$	1,366