Note 6. Balance sheet components

Accounts receivable, net

Accounts receivable, net consists of the following (in thousands):

	September 30, 2013			December 31, 2012
Accounts receivable	$	73,418		$	66,338
Trade notes receivable		6,327			4,979
Allowance for doubtful accounts		(847	)		(963	)
	$	78,898		$	70,354

Inventories

Inventories consist of the following (in thousands):

	September 30, 2013		December 31, 2012
Raw materials	$	19,282	$	20,520
Work in process		22,132		8,603
Finished goods ⁽¹⁾		22,273		14,670
	$	63,687	$	43,793

⁽¹⁾	Finished goods inventory at offsite managed inventory locations were $6.0 million and $4.5 million as of September 30, 2013 and December 31, 2012, respectively.

Prepaid expenses and other current assets

Prepaid expenses and other current assets consist of the following (in thousands):

	September 30, 2013		December 31, 2012
Restricted cash	$	1,641	$	2,626
Prepaid expenses		3,133		2,471
Other		5,511		5,159
	$	10,285	$	10,256

Purchased intangible assets

Purchased intangible assets consist of the following (in thousands):

	September 30, 2013							December 31, 2012
	Gross Assets		Accumulated Amortization			Net Assets		Gross Assets		Accumulated Amortization			Net Assets
Technology and patents	$	34,517	$	(25,176	)	$	9,341	$	32,176	$	(22,869	)	$	9,307
Customer relationships		15,147		(9,314	)		5,833		11,898		(8,148	)		3,750
Leasehold interest		1,391		(256	)		1,135		1,355		(241	)		1,114
Noncompete agreements		950		(950	)		-		950		(908	)		42
	$	52,005	$	(35,696	)	$	16,309	$	46,379	$	(32,166	)	$	14,213

Amortization expense relating to technology and patents and the leasehold interest intangible assets is included within cost of goods sold, and customer relationships and the noncompete agreements within operating expenses. The following table presents details of the amortization expense of the Company’s purchased intangible assets as reported in the condensed consolidated statements of operations (in thousands):

	Three Months Ended September 30,				Nine Months Ended September 30,
	2013		2012		2013		2012
Cost of goods sold	$	738	$	616	$	1,937	$	1,830
Operating expenses		381		321		1,128		996
Total	$	1,119	$	937	$	3,065	$	2,826

The estimated future amortization expense of purchased intangible assets as of September 30, 2013, is as follows (in thousands):

2013 (remaining 3 months)	$	1,120
2014		4,468
2015		4,453
2016		3,706
2017		846
Thereafter		1,716
	$	16,309

Accrued and other current liabilities

Accrued and other current liabilities consist of the following (in thousands):

	September 30, 2013		December 31, 2012
Employee-related accrued expenses	$	10,497	$	12,293
Other accrued expenses		13,463		7,666
	$	23,960	$	19,959

Other noncurrent liabilities

Other noncurrent liabilities consist of the following (in thousands):

	September 30, 2013		December 31, 2012 Revised, see Note 1
Pension and other employee-related	$	6,386	$	188
Penalty payment derivative (Note 9)		238		138
Other		2,148		2,189
	$	8,772	$	2,515

Warranty Accrual

The Company provides warranties to cover defects in workmanship, materials and manufacturing for a period of one to two years to meet the stated functionality as agreed to in each sales arrangement. The Company accrues for estimated warranty costs based upon historical experience, and for specific items, at the time their existence is known and the amounts are estimable.

The table below summarizes the movement in the warranty accrual, which is included in accrued and other current liabilities (in thousands):

	Three Months Ended September 30,						Nine Months Ended September 30,
	2013			2012			2013			2012
Beginning balance	$	1,461		$	1,298		$	1,072		$	1,443
Warranty accruals		703			98			1,137			251
Settlements and adjustments		(219	)		(65	)		(264	)		(363	)
Ending balance	$	1,945		$	1,331		$	1,945		$	1,331