Product Warranties

3 Months Ended

May 31, 2013

Commitments and Contingencies/Product Warranties [Abstract]

I.	Product Warranties

The Company provides reserves for the estimated cost of product warranty-related claims at the time of sale, and periodically adjusts the provision to reflect actual experience related to its standard product warranty programs and its extended warranty programs. The amount of warranty liability accrued reflects management’s best estimate of the expected future cost of honoring Company obligations under its warranty plans. Additionally, from time to time, specific warranty accruals may be made if unforeseen technical problems arise. Meade ^® brand products, principally telescopes and binoculars, are generally covered by a one-year limited warranty. Most of the Coronado^® products have limited five-year warranties.

Included in the warranty accrual as of May 31, 2013 and February 28, 2013, is $0.2 million related to the Company’s former Simmons sport optics brand that was sold in 2008 and for which the Company agreed to retain certain warranty liabilities. In June 2012, the Company entered into an agreement with the owner of the Company’s former Weaver sport optics brands which eliminated the Company’s remaining liability of approximately $0.3 million for any future product warranty claims associated with that brand.

Changes in the warranty liability, which is included as a component of accrued liabilities on the accompanying Consolidated Balance Sheets, were as follows:


	Three Months Ended May 31,
	2013			2012
	(In thousands)
Beginning balance	$	395		$	736
Release of warranty liability		—			(293	)
Warranty accrual		11			42
Labor and material		(42	)		(58	)

Ending balance	$	364		$	427

MEADE INSTRUMENTS CORP 10-Q