Note 3. Inventories

Inventories consisted of the following:

(in thousands)	March 30, 2012		March 25, 2011
Purchased components	$	1,811	$	1,368
Finished goods		1,282		1,623
	$	3,093	$	2,991

Certain inventories, not expected to be consumed within the next 12 months, are included in the consolidated balance sheet as non-current other assets. These inventories consist of both purchased components and finished goods, and were $622,000 and $2.5 million, respectively, at March 30, 2012 and March 25, 2011.

Subsequent to the issuance of the fiscal 2011 consolidated financial statements, management determined that certain inventories, not expected to be consumed within the next 12 months were reflected in the consolidated balance sheet as current assets within inventories. These inventories should have been reflected as noncurrent and included within other assets. Management has corrected this error by reclassifying $1.7 million of inventories as follows:

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Inventories for fiscal year 2011 originally reported of $4.7 million were corrected to $3.0 million.

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Other assets for fiscal year 2011 originally reported of $4.3 million were corrected to $6.0 million.

The corrections did not affect the total assets previously reported. In addition, management has corrected the following:

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Long term inventory for fiscal year 2011 previously disclosed above and in footnote 4 has been increased from $805,000 to $2.5 million.

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Change in inventories in the condensed consolidated statement of cash flows for the year ended March 25, 2011 originally reported of $(283,000) was corrected to $1.4 million.

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Change in prepaid expenses and other assets in the condensed consolidated statement of cash flows for the year ended March 25, 2011 originally reported of $2.8 million was corrected to $1.2 million.

The foregoing corrections did not affect the net cash used in operating activities and are not considered material by management.

Under the Company's agreement with its primary contract manufacturer, Plexus Corp. (Plexus), the Company maintains a level of control over parts procurement, design, documentation, and selection of approved suppliers. The Company is generally liable for any termination or cancellation of product orders, as well as excess and obsolete material, which can result, for example, from an engineering change, product obsolescence, or inaccurate component forecasting. Under the agreement, Plexus is to procure raw materials and begin manufacturing of products in accordance with the Company's forecasts. If certain purchased raw materials or certain work-in-process items are held for greater than 90 days, the Company must make deposits on the aging inventory, although Plexus must make efforts to minimize the Company's liability for the aging inventory, including returning materials to suppliers, canceling orders with suppliers, or using materials to manufacture product for its other customers. If raw material or in-process inventories are still unused and have been held for more than nine months, the Company must take ownership and pay for the aged inventory. Alternatively, if there is forecasted demand for such inventory, the Company must pay a management fee for Plexus to retain such inventory. If the forecasted demand does not materialize the Company must take ownership and pay for such inventory. This activity may increase the Company's owned inventories. The term of our agreement with Plexus currently runs to December 31, 2012, with automatic renewal for additional one-year terms unless either party gives notice of intent not to renew, and subject to either party's right to terminate upon six months notice.

At March 30, 2012, the Company's deposit on inventory held by Plexus was $2.3 million, of which $1.3 million had been charged to a reserve for excess inventory. The deposit, including the related reserve, is included in prepaid expenses and other assets in the consolidated balance sheets.

The Company regularly evaluates its inventory, including inventory held by Plexus and the amount on deposit with Plexus as well as inventory classified non-current assets. As a result of these evaluations, the Company recorded charges of $2.1 million, $550,000, and $1.9 million, respectively, to cost of revenue in fiscal 2012, 2011 and 2010.