8x8 2008 Annual Report Download - page 62

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Product Warranties
The Company accrues for the estimated costs that may be incurred under its product warranties upon revenue recognition.
Changes in the Company’ s product warranty liability, which is included in cost of product revenues in the consolidated
statements of operations, during the years ended March 31, 2008 and 2007 were as follows (in thousands):
2008 2007 2006
Balance at beginning of yea
r
$ 323 $ 301 187
Accruals for warranties 297 331 576
Payments (306) (270) (375)
Changes in estimates - (39) (87)
Balance at end of year $ 314 $ 323 301
Years Ended March 31,
Standby letter of credit
At March 31, 2008 and 2007, the Company had certain restricted deposits totaling $100,000 and $250,000 which were
recorded in the other assets line item on the consolidated balance sheets. This deposit was made in order to obtain a standby
letter of credit in accordance with certain contractual obligations, and is collateralized by a cash deposit at the Company’ s
bank.
Leases
The Company leases its primary facility in Santa Clara, California under a non-cancelable operating lease agreement that
expires in August 2009. The Company also has leased facilities in France. The facility leases include rent escalation clauses,
and require the Company to pay taxes, insurance and normal maintenance costs. At March 31, 2008, future minimum annual
lease payments under non-cancelable operating leases, net of sublease income, were as follows (in thousands):
Year Ending March 31,
2009 $ 493
2010 206
Total minimum payments $ 699
Rent expense for the years ended March 31, 2008, 2007 and 2006 was $486,000, $434,000 and $478,000, respectively.
Capital Leases
In April 2005, June 2006 and March 2007, the Company entered into a series of non-cancelable five year capital lease
agreements for office equipment bearing interest at various rates. At March 31, 2008, future minimum annual lease payments
under noncancelable capital leases were as follows (in thousands):
Year ending March 31:
2009 $ 42
2010 42
2011 26
2012 22
To tal min imu m p ayme nt s 132
Less: Amount representing interest (10)
122
Less: Short-term portion of capital lease obligations (36)
Long-term portion of capital lease obligations $ 86
60