Quarterly report pursuant to Section 13 or 15(d)

Warranty Liability

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Warranty Liability
3 Months Ended
Mar. 31, 2018
Warranty Liability  
Warranty Liability

10.Warranty Liability

 

The Company accrues for estimated warranty costs as sales are recognized and periodically assesses the adequacy of its recorded warranty liability and adjusts the amount as necessary. The Company’s warranties generally provide, with respect to its snow and ice control equipment, that all material and workmanship will be free from defect for a period of two years after the date of purchase by the end-user, and with respect to its parts and accessories purchased separately, that such parts and accessories will be free from defect for a period of one year after the date of purchase by the end-user.  Certain snowplows only provide for a one year warranty.  The Company determines the amount of the estimated warranty costs (and its corresponding warranty reserve) based on the Company’s prior five years of warranty history utilizing a formula driven by historical warranty expense and applying management’s judgment.  The Company adjusts its historical warranty costs to take into account unique factors such as the introduction of new products into the marketplace that do not provide a historical warranty record to assess. The warranty reserve was $4,630 at March 31, 2018, of which $1,883 is included in Other long term liabilities and $2,747 is included in Accrued expenses and other current liabilities in the accompanying Condensed Consolidated Balance Sheet.  The warranty reserve was $5,677 at December 31, 2017, of which $2,415 is included in Other long term liabilities and $3,262 is included in Accrued expenses and other current liabilities in the accompanying Condensed Consolidated Balance Sheet. 

 

The following is a rollforward of the Company’s warranty liability:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Three Months Ended

 

 

 

March 31,

 

March 31,

 

 

 

2018

 

2017

 

 

 

 

 

 

 

 

 

Balance at the beginning of the period

 

$

5,677

 

$

6,160

 

Warranty provision

 

 

662

 

 

626

 

Claims paid/settlements

 

 

(1,709)

 

 

(1,505)

 

Balance at the end of the period

 

$

4,630

 

$

5,281