Note 4 - Balance Sheet Detail

12 Months Ended

Dec. 31, 2014

Disclosure Text Block Supplement [Abstract]

Supplemental Balance Sheet Disclosures [Text Block]

NOTE 4—BALANCE SHEET DETAIL

Inventories

Inventories consist of the following (in thousands):

	December 31,
	2014		2013
Raw materials	$	7,185	$	5,989
Finished goods		3,803		3,017
Total	$	10,988	$	9,006

Property and Equipment, net

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

	December 31,
	2014			2013
Leasehold improvements	$	641		$	625
Office equipment and furniture		2,964			3,285
Machinery and equipment		4,140			3,876
		7,745			7,786
Less: Accumulated depreciation		(6,284	)		(6,424	)
Property and equipment, net	$	1,461		$	1,362

Included in machinery and equipment are financed vehicles used by the Company’s North American sales employees. As of December 31, 2014 and 2013, the gross capitalized value of the leased vehicles was $647,000 and $577,000 and the related accumulated depreciation was $253,000 and $98,000, respectively.

Goodwill and Other Intangible Assets

Goodwill and other intangible assets comprise a patent sublicense acquired from Palomar in 2006, intangible assets and goodwill related to the acquisition of Iridex’s aesthetic business unit, and, customer relationships in the Benelux countries acquired from a former distributor in 2013. The components of intangible assets at December 31, 2014 and 2013 were as follows (in thousands):

	Gross Carrying Amount		Accumulated Amortization & Impairment Amount		Net Amount
December 31, 2014
Patent sublicense	$	1,218	$	1,206	$	12
Customer relationship intangible related to acquisition		2,510		1,998		512
Other identified intangible assets related to acquisition		780		780		—
Other intangible		155		84		71
Goodwill		1,339		—		1,339
Total	$	6,002	$	4,068	$	1,934
December 31, 2013
Patent sublicense	$	1,218	$	1,068	$	150
Customer relationship intangible related to acquisition		2,510		962		1,548
Other identified intangible assets related to acquisition		780		607		173
Other intangible		155		6		149
Goodwill		1,339		—		1,339
Total	$	6,002	$	2,643	$	3,359

As of December 31, 2014, the Company evaluated the recoverability of its long-lived assets. Relating to the purchased intangible assets associated with the Iridex acquisition in 2012, due to the discontinuation of the manufacture and sale of all products acquired, lower than projected future Service revenue, and lower than projected revenue expected from the distributor relationships acquired, the Company concluded based on future undiscounted cash flows that the remaining carrying value of these assets was impaired. As a result, the Company recorded an impairment charge of $650,000 in cost of revenue.

Amortization expense (excluding the impairment charge described above) in 2014, 2013, and 2012 for intangible assets was $773,000, $702,000, and $1.2 million, respectively.

Based on intangible assets recorded at December 31, 2014, and assuming no subsequent additions to, or impairment of the underlying assets, the remaining estimated annual amortization expense is expected to be as follows (in thousands):

Year ending December 31,	Amount
2015	$	452
2016		142
2017		1
Total	$	595

Accrued Liabilities

Accrued liabilities consist of the following (in thousands):

	December 31,
	2014		2013
Payroll and related expenses	$	5,533	$	4,753
Sales tax		1,789		1,307
Warranty		1,167		1,202
Other		2,518		2,066
Total	$	11,007	$	9,328