Financial Statement Details

Marketable Securities

The Company did not have any short-term or long-term marketable securities at December 31, 2014.

The following table summarizes the Company’s portfolio of available-for-sale securities by contractual maturity as of December 31, 2013 (in thousands):



December 31, 2013	Maturity in Years	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Estimated Fair Value
Available-for-sale:
Government agency securities	1 or less	$	2,350	$	1	$	—	$	2,351
Municipal bonds	1 or less	2,828		1		—		2,829
Certificates of deposit	1 or less	3,360		—		—		3,360
Corporate debentures / bonds	1 or less	10,635		3		—		10,638
Total short-term marketable securities		19,173		5		—		19,178
Available-for-sale:
Certificates of deposit	1 to 2	1,300		—		—		1,300
Corporate debentures / bonds	1 to 2	2,143		—		—		2,143
Total long-term marketable securities		3,443		—		—		3,443
		$	22,616	$	5	$	—	$	22,621

The Company’s available-for-sale securities are carried on the consolidated balance sheet at fair market value with the related unrealized gains and losses included in accumulated other comprehensive loss on the consolidated balance sheet, 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.

At December 31, 2014 and 2013, the Company recorded net unrealized gains of $0 and $5,000, respectively. The Company’s net unrealized loss is the result of market conditions affecting its fixed-income debt securities, which are included in accumulated other comprehensive income on the consolidated balance sheet for the periods then ended.

Inventories

Inventories consist of the following (in thousands):



	December 31,
	2014		2013
Finished goods	$	33,045	$	20,870
Raw materials and components	4,758		6,923
	$	37,803	$	27,793

Property and Equipment

Property and equipment consists of the following (in thousands):



	December 31,
	2014			2013
Test equipment	$	53,019		$	52,108
Computer equipment and purchased software	11,247			10,814
Product tooling	3,535			3,204
Furniture and fixtures	1,824			2,015
Leasehold improvements	4,103			4,094
	73,728			72,235
Less—accumulated depreciation and amortization	(68,449		)	(62,334		)
	$	5,279		$	9,901

For the years ended December 31, 2014, 2013 and 2012, the Company recorded $0, $70,000 and $100,000, respectively, in its cost of net revenues as a result of its impairment analysis of property and equipment.

Depreciation expense relating to property and equipment was $6.3 million, $7.9 million and $9.4 million for the years ended December 31, 2014, 2013 and 2012, respectively.

Accrued Expenses

Accrued expenses consist of the following (in thousands):



	December 31,
	2014		2013
Royalties	$	4,035	$	4,243
Payroll and related expenses	8,038		4,828
Product warranty	1,196		2,244
Market development funds and price protection	2,502		3,059
Professional fees	780		1,040
Deferred revenue	962		2,999
Restructuring	1,886		610
Other	4,445		4,248
	$	23,844	$	23,271

Accrued Warranty Obligations

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



	December 31,
	2014			2013
Warranty liability at beginning of period	$	2,244		$	2,329
Additions charged to operations	1,345			5,055
Deductions from liability	(2,393		)	(5,140		)
Warranty liability at end of period	$	1,196		$	2,244