Inventory

3 Months Ended

Sep. 30, 2011

Inventory [Abstract]

Inventory

Note 3 – Inventory

Inventory is stated at the lower of cost (determined by the average cost method, which approximates first-in, first-out) or market value. Inventory primarily includes the cost of material utilized in the processing of the Company's products and was as follows as of September 30, 2011 and June 30, 2011:

	September 30, 2011			June 30, 2011
Raw materials	$	13,690		$	14,196
Work in process		2,295			2,150
Finished goods		1,685			2,057
Gross inventory		17,670			18,403
Provision for inventory obsolescence		(1,767	)		(1,774	)
Inventory	$	15,903		$	16,629

Adjustments to inventory are made at the individual part level for estimated excess, obsolescence or impaired balances, to reflect inventory at the lower of cost or market. Factors influencing these adjustments include changes in demand, rapid technological changes, product life cycle and development plans, component cost trends, product pricing, physical deterioration and quality concerns. Revisions to these adjustments may be required if any of these factors differ significantly from the Company's estimates.

The Company, as a result of its May 2011 acquisition of certain operational assets and certain liabilities relating to the business and product lines of Norian (see Note 5), "stepped-up" the acquired inventory to its fair value as of the acquisition date, in accordance with FASB ASC Topic 805, "Business Combinations" (ASC 805). The Company's purchase accounting adjustment to the fair value of inventory, commonly referred to as "stepped-up value," of $1,286, represented the estimated capitalized manufacturing profit in acquired inventory as of the date of acquisition, of which the Company had expensed $257 during the fourth quarter of fiscal 2011 and $772 during the first quarter of the Company's fiscal year ending June 30, 2012 (fiscal 2012). This non-recurring, non-cash charge to Cost of products sold is recognized over the expected inventory turn-over period as the related inventory is sold, which approximates a five month period. This capitalized manufacturing profit added to inventory under purchase accounting is expected to be sold within approximately the five months after the date of acquisition through the Company's second quarter of fiscal 2012.