Inventories

Inventories consisted of the following (in thousands):



	March 31, 2014			December 31, 2013
Raw materials	$	22,935		$	22,416
Work-in-process	465			1,194
Finished goods	9,188			9,644
	32,588			33,254
Less: inventory valuation allowance	(8,697		)	(7,845		)
Inventories, net	$	23,891		$	25,409

As of March 31, 2014, the balance of consigned inventory at the Company’s contract manufacturing partner was $10.8 million. Inventory deposit is inventory held at the Company’s outsourced hardware repair service provider.

Consigned inventory is held at third-party locations, including the Company's contract manufacturing partner and customers. The Company retains title to the inventory until purchased by the third-party. The Company is contractually obligated to purchase the inventory on consignment from its contract manufacturer for the cost of excess inventory that is purchased as a result of the Company's forecasted demand when there is no alternative use. Consigned inventory, consisting of raw materials and finished goods was $11.9 million and $12.0 million at March 31, 2014 and December 31, 2013.

The Company recorded the following charges associated with the valuation of inventory, inventory deposit and the adverse purchase commitment liability (in thousands):



	Three Months Ended
	March 31,
	2014		2013
Inventory, net	$	1,162	$	1,038
Adverse purchase commitments	(127)		(32)