Balance Sheet Information

3 Months Ended

Mar. 31, 2012

Basis of Presentation/Balance Sheet Information [Abstract]

Balance Sheet Information

6. Balance Sheet Information

Accounts Receivable and Allowance for Doubtful Accounts

Accounts receivable are recorded at invoiced amount with standard net terms that range between 30 and 60 days. The Company extends credit to its customers based on an evaluation of a customer’s financial condition and collateral is generally not required. The Company maintains an allowance for doubtful accounts for estimated uncollectible accounts receivable. The allowance is based on the Company’s assessment of known delinquent accounts, historical experience, and other currently available evidence of the collectability and the aging of accounts receivable. The Company’s allowance for doubtful accounts was $0.1 million at March 31, 2012 and at December 31, 2011. The provision for doubtful accounts is included in sales and marketing expense in the condensed consolidated statements of operations.

Inventories

Inventories are stated at the lower of cost or market and include material, labor and overhead costs using the first-in, first-out (“FIFO”) method of costing. Inventories as of March 31, 2012 and December 31, 2011 were composed of raw materials, sub-assemblies, finished goods and work-in-process. The Company had consigned inventory with customers of $0.9 million at March 31, 2012 and December 31, 2011. The Company records allowances to reduce the value of inventory to the lower of cost or market, including allowances for excess and obsolete inventory. The allowance for inventory losses was $1.6 million and $1.5 million at March 31, 2012 and December 31, 2011, respectively.

Inventories consisted of the following at March 31, 2012 and December 31, 2011:

	March 31,		December 31,
	2012		2011
Raw materials	$	8,973	$	10,573
Work in process		764		476
Finished goods		3,509		2,862
Inventories, net	$	13,246	$	13,911

Prepaid and Other Current Assets

Prepaid assets are stated at cost and are amortized over the useful lives (up to one year) of the assets.

Property and Equipment

Property and equipment are stated at cost and are depreciated using the straight-line method over the estimated useful lives of the assets. The Company depreciates computer equipment over three to five years, office equipment, manufacturing and test equipment, and motor vehicles over five years, furniture and fixtures over seven years, and buildings over 30 years. Leasehold improvements are amortized over the shorter of the corresponding lease term or useful life. Depreciation expense and gains and losses on the disposal of property and equipment are included in cost of sales and operating expenses in the condensed consolidated statements of operations. Maintenance and repairs are expensed as incurred.

Property and equipment consists of the following at March 31, 2012 and December 31, 2011:

	March 31,			December 31,
	2012			2011
Building	$	6,207		$	6,207
Computers and office equipment		8,411			7,962
Manufacturing and test equipment		8,888			8,831
Furniture and fixtures		1,169			1,169
Leasehold improvements		302			230
Motor vehicles		27			27
Total property and equipment		25,004			24,426
Less: Accumulated depreciation and amortization		(13,078	)		(12,606	)
Land		1,770			1,770
Property and equipment, net	$	13,696		$	13,590

Liabilities

Accrued liabilities consist of the following at March 31, 2012 and December 31, 2011:

	March 31,		December 31,
	2012		2011
Paid time off	$	1,008	$	940
Inventory receipts		771		1,457
Payroll, bonuses, and other employee benefits		478		3,015
Warranties		244		249
Professional fees		233		197
Due to Sparco shareholders		198		198
Real estate taxes		188		159
Employee stock purchase plan		110		232
Deferred revenues		56		78
Other		620		567
Total	$	3,906	$	7,092

Long-term liabilities consist of the following:

	March 31,		December 31,
	2012		2011
Executive deferred compensation plan	$	1,520	$	1,272
Income taxes		825		825
Deferred rent		25		42
Deferred revenues		4		5
	$	2,374	$	2,144