Annual report pursuant to section 13 and 15(d)

Inventories

v2.4.0.8
Inventories
 12 Months Ended
Dec. 31, 2013
Inventories
5. INVENTORIES:

Inventories, which are purchased from third parties, consist of the following:

 

(in thousands)

    December 31,  
   2013     2012  

Raw materials

    $ 4,450      $ 1,552   

Finished goods

      2,227        2,693   
  

 

 

    

 

 

  
     6,677        4,245   

Less provision for obsolescence

      (1,254 )      (1,669 ) 
  

 

 

    

 

 

  

Net inventories

    $ 5,423      $ 2,576   
  

 

 

    

 

 

  

 

The following presents the changes in inventory reserves for the years indicated.

 

(in thousands)

    Year Ended December 31,  
   2013     2012     2011  

Inventory reserve at January 1,

    $ 1,669      $ 895      $ 271   

Additions

      1,190        1,346        628   

Write offs

      (1,605 )      (572 )      (4 ) 
  

 

 

    

 

 

    

 

 

  

Inventory Reserve at December 31,

    $ 1,254      $ 1,669      $ 895   
  

 

 

    

 

 

    

 

 

  

The Company terminated its relationship with Seesmart’s logistics supplier in 2013. All inventories were returned to Seesmart during March 2013.

As a result of deteriorating market conditions and aggressive pricing by competitors, the Company experienced a decrease in market price for certain Array products in its LED replacement lamps and fixtures segment. For the year ended December 31, 2012, the Company recorded a reserve for obsolete inventory of $387,000 due to this decrease in market price. The provision for obsolescence decreased in 2013 because certain Array inventories were written off.