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Balance Sheet Details

6 Months Ended

Jun. 30, 2011

3. Balance Sheet Details

Marketable Securities

The Company's portfolio of available-for-sale securities by contractual maturity consists of the following (in thousands):


June 30, 2011	Maturity in Years		Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses			Estimated Fair Value
Available-for-sale:
Corporate debentures / bonds		1 or less	$	18,337	$	18	$	0		$	18,355
Government agency securities		1 or less		3,108		1		0			3,109
Municipal bonds		1 or less		2,255		0		0			2,255
Certificates of deposit		1 or less		2,160		2		0			2,162
Marketable equity securities		N/A		231				0			231

Total short-term marketable securities				26,091		21		0			26,112

Available-for-sale:
Corporate debentures / bonds		1 to 2		5,220		0		(5	)		5,215
Government agency securities		1 to 2		8,638		6		0			8,644
Muncipal bonds		1 to 2		2,267		0		(1	)		2,266
Certificates of deposit		1 to 2		959		6		0			965

Total long-term marketable securities				17,084		12		(6	)		17,090

			$	43,175	$	33	$	(6	)	$	43,202


December 31, 2010
Available-for-sale:
Corporate debenture/bonds		1 or less	$	33,356	$	31	$	(3	)	$	33,384
Municipal bonds		1 or less		5,259		0		(4	)		5,255
Certificates of deposit		1 or less		925		0		0			925
Government agency securities		1 or less		20,207		4		0			20,211

Total short-term marketable securities				59,747		35		(7	)		59,775

Available-for-sale:
Corporate debenture/bonds		1 to 2		8,808		0		(14	)		8,794
Certificates of deposit		1 to 2		2,397		6		0			2,403
Government agency securities		1 to 2		9,478		1		0			9,479

Total long-term marketable securities				20,683		7		(14	)		20,676

			$	80,430	$	42	$	(21	)	$	80,451

The Company's available-for-sale securities are carried at fair value market value with the related unrealized gains and losses included in accumulated other comprehensive income (loss), which is a separate component of stockholders' equity. Realized gains and losses on the sale of available-for-sale marketable securities are determined using the specific-identification method.

As of June 30, 2011, the Company had a net unrealized gain of $27,000 in accumulated other comprehensive (loss) income. The Company's net unrealized gain is the result of market conditions affecting its fixed-income, debt and equity securities, which are included in accumulated other comprehensive (loss) income in the Consolidated Balance Sheet.

As of June 30, 2011, the Company's investment portfolio included $385,000 of marketable equity securities at original cost, with a fair value of $231,000. These securities are currently traded on the Over the Counter Bulletin Board (OTCBB) and are not traded on major exchanges such as the New York Stock Exchange. For the three months ended June 30, 2011, the Company recorded an other-than-temporary loss of $154,000 within other income (expense), net on the Consolidated Statement of Operations.

Inventories

Inventories consist of the following (in thousands):


	June 30,		December 31,
	2011		2010
Finished goods	$	46,970	$	36,764
Raw materials and components		3,175		6,330

	$	50,145	$	43,094

Accrued Expenses

Accrued expenses consist of the following (in thousands):


	June 30, 2011		December 31, 2010
Royalties	$	6,202	$	6,461
Payroll and related expenses		6,366		5,704
Product warranty		1,709		2,279
Market development fund and price protection		1,448		1,452
Deferred rent		1,200		1,092
Professional fees		1,111		1,103
Other		7,443		7,959

	$	25,479	$	26,050

Accrued Warranty Obligations

Accrued warranty obligations consist of the following (in thousands):


	Three Months Ended June 30, 2011			Three Months Ended June 30, 2010			Six Months Ended June 30, 2011			Six Months Ended June 30, 2010
Warranty liability at beginning of period	$	2,349		$	3,150		$	2,279		$	3,039
Additions charged to operations		334			229			1,197			620
Deductions from liability		(974	)		(912	)		(1,767	)		(1,192	)

Warranty liability at end of period	$	1,709		$	2,467		$	1,709		$	2,467

The Company accrues warranty costs based on estimates of future warranty-related replacement, repairs or rework of products. The Company generally provides one to three years of coverage for products following the date of purchase and the Company accrues the estimated cost of warranty coverage as a component of cost of revenues in the Consolidated Statements of Operations at the time revenue is recognized. In estimating our future warranty obligations we consider various relevant factors, including the historical frequency and volume of claims, and the cost to replace or repair products under warranty.