Certain Financial Statement Information

Inventories consisted of the following:



	June 28, 2014		December 28, 2013
Raw materials	$	13,298	$	22,265
Work in progress	20,824		22,100
Finished goods	5,843		9,124
	$	39,965	$	53,489

During the six months ended June 28, 2014, the Company recorded inventory write-downs of $2,669 related to excess and obsolete inventory and reductions to the carrying value of inventories as a result of a lower of cost or market valuations. These write-downs were the result of changes in customer forecasted demand from one of the Company's distributors and due to additional selling price reductions that the Company believes were necessary to respond to competitive pricing pressures for certain products. These inventory reductions were recorded in cost of net revenues. During the six months ended June 29, 2013, the inventory write-downs were not material.

Included in the table are inventories held by others, which include distributors and third-parties in the Company’s supply chain of $7,550 and $7,874 at June 28, 2014 and December 28, 2013, respectively.

Property and equipment consist of the following:



	Useful Life (Years)	June 28, 2014			December 28, 2013
Computer equipment and software	3 - 5	$	6,736		$	6,390
Machinery and equipment	5	41,541			40,427
Office furniture and equipment	7	789			1,081
Leasehold improvements	*	4,896			5,180
Construction in progress		1,377			1,544
		55,339			54,622
Less accumulated depreciation and amortization		(34,935		)	(31,500		)
		$	20,404		$	23,122

* Leasehold improvements are amortized over the estimated life of the asset or remaining term of the lease, whichever is shorter.

Depreciation and amortization expense was $1,779 and $1,604 for the three months ended June 28, 2014 and June 29, 2013 and $3,596 and $3,104 for the six months ended June 28, 2014 and June 29, 2013, respectively.

Accrued liabilities consisted of the following:



	June 28, 2014		December 28, 2013
Accrued inventory purchases	$	462	$	1,717
Accrued inventory repurchase obligation	4,187		6,510
Accrued professional fees	4,382		1,210
Accrued other	2,627		2,392
	$	11,658	$	11,829

Accrued inventory repurchase obligation represents raw materials sold to suppliers for processing. These raw materials remain part of the Company’s total inventory and the transactions include only customary terms and conditions, such as shipping and payment terms.

Warranty

Warranty costs, which include labor and material, incurred and related reserves (included in accrued liabilities) were as follows:



	Six Months Ended
	June 28, 2014			June 29, 2013
Balance at beginning of period	$	159		$	57
Provision, net	546			650
Costs incurred	(118		)	(176		)
Balance at end of period	$	587		$	531