WARRANTIES

The Company provides for anticipated warranty costs at the time the associated product revenue is recognized. Accrued warranties are included in accounts payable and accrued liabilities in the accompanying Condensed Consolidated Balance Sheets. 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. Changes to the Company’s product warranty liability for the six months ended June 30, 2014 are as follows (in thousands):



Balance at December 31, 2013	$	1,697
Additions charged to cost of product sales	339
Repairs and replacements	(395		)
Adjustments	(183		)
Balance at June 30, 2014	$	1,458