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font-family: Times New Roman''; color: #000000; font-size: 10pt;">755</div></td><td style="width: 1%; vertical-align: bottom;"><div style="text-align: left; font-family: Times New Roman; color: #000000; font-size: 10pt;">&#160;</div></td></tr><tr style="background-color: #ffffff;"><td style="width: 86.72%; vertical-align: bottom;"><div style="text-align: left; background-color: #ffffff; font-family: Times New Roman''; color: #000000; margin-left: 7.2pt; font-size: 10pt;">Warranty expense</div></td><td style="width: 1.67%; vertical-align: bottom;"><div style="text-align: left; background-color: #ffffff; font-family: Times New Roman; color: #000000; font-size: 10pt;">&#160;</div></td><td style="width: 1.67%; vertical-align: bottom;"><div style="text-align: left; background-color: #ffffff; font-family: Times New Roman; color: #000000; font-size: 10pt;">&#160;</div></td><td style="width: 8.94%; vertical-align: bottom;"><div style="text-align: right; background-color: #ffffff; font-family: Times New Roman''; 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vertical-align: bottom;"><div style="text-align: left; font-family: Times New Roman''; color: #000000; font-size: 10pt;">)</div></td></tr><tr style="background-color: #ffffff;"><td style="width: 86.72%; vertical-align: bottom;"><div style="text-align: left; background-color: #ffffff; text-indent: -7.2pt; font-family: Times New Roman''; color: #000000; margin-left: 7.2pt; font-size: 10pt;">Balance at June 30, 2013</div></td><td style="width: 1.67%; vertical-align: bottom;"><div style="text-align: left; background-color: #ffffff; font-family: Times New Roman; color: #000000; font-size: 10pt;">&#160;</div></td><td style="border-bottom: #000000 4px double; width: 1.67%; vertical-align: bottom;"><div style="text-align: left; background-color: #ffffff; font-family: Times New Roman''; color: #000000; font-size: 10pt;">$</div></td><td style="border-bottom: #000000 4px double; width: 8.94%; vertical-align: bottom;"><div style="text-align: right; background-color: #ffffff; font-family: Times New Roman''; 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vertical-align: bottom;"><div style="text-align: left; font-family: Times New Roman; color: #000000; font-size: 10pt;">&#160;</div></td></tr><tr style="background-color: #ffffff;"><td style="width: 86.72%; vertical-align: bottom;"><div style="text-align: left; background-color: #ffffff; text-indent: -7.2pt; font-family: Times New Roman''; color: #000000; margin-left: 7.2pt; font-size: 10pt;">Long-term warranty liability</div></td><td style="width: 1.67%; vertical-align: bottom;"><div style="text-align: left; background-color: #ffffff; font-family: Times New Roman; color: #000000; font-size: 10pt;">&#160;</div></td><td style="border-bottom: #000000 2px solid; width: 1.67%; vertical-align: bottom;"><div style="text-align: left; background-color: #ffffff; font-family: Times New Roman; color: #000000; font-size: 10pt;">&#160;</div></td><td style="border-bottom: #000000 2px solid; width: 8.94%; vertical-align: bottom;"><div style="text-align: right; background-color: #ffffff; font-family: Times New Roman''; color: #000000; font-size: 10pt;">46</div></td><td style="width: 1%; vertical-align: bottom;"><div style="text-align: left; background-color: #ffffff; font-family: Times New Roman; color: #000000; font-size: 10pt;">&#160;</div></td></tr><tr style="background-color: #cceeff;"><td style="width: 86.72%; vertical-align: bottom;"><div style="text-align: left; text-indent: -7.2pt; font-family: Times New Roman''; color: #000000; margin-left: 7.2pt; font-size: 10pt;">Balance at June 30, 2013</div></td><td style="width: 1.67%; vertical-align: bottom;"><div style="text-align: left; font-family: Times New Roman; color: #000000; font-size: 10pt;">&#160;</div></td><td style="border-bottom: #000000 4px double; width: 1.67%; vertical-align: bottom;"><div style="text-align: left; font-family: Times New Roman''; color: #000000; font-size: 10pt;">$</div></td><td style="border-bottom: #000000 4px double; width: 8.94%; vertical-align: bottom;"><div style="text-align: right; font-family: Times New Roman''; color: #000000; font-size: 10pt;">715</div></td><td style="width: 1%; vertical-align: bottom;"><div style="text-align: left; font-family: Times New Roman; color: #000000; font-size: 10pt;">&#160;</div></td></tr></table><div><br /></div></div> <div style="font-family: 'Times New Roman', Times, serif; font-size: 10pt;"><div style="text-align: left; text-indent: 27pt; font-family: Times New Roman''; color: #000000; font-size: 10pt;">The following table sets forth the computation of basic and diluted net income (loss) per share (in thousands, except per share data):</div><div><br /></div><table cellpadding="0" cellspacing="0" style="width: 100%; font-family: 'Times New Roman', Times, serif; font-size: 10pt;"><tr><td style="width: 46.93%; vertical-align: bottom;"><div style="text-align: left; font-family: Times New Roman; color: #000000; font-size: 10pt;">&#160;</div></td><td style="width: 1.67%; vertical-align: bottom;"><div style="text-align: left; font-family: Times New Roman; color: #000000; font-size: 10pt;">&#160;</div></td><td colspan="6" style="border-bottom: #000000 2px solid; width: 23.19%; vertical-align: bottom;"><div style="text-align: center; font-family: Times New Roman''; color: #000000; font-size: 10pt; font-weight: bold;">Three Months Ended June 30,</div></td><td style="width: 1.67%; vertical-align: bottom;"><div style="text-align: left; font-family: Times New Roman; color: #000000; font-size: 10pt;">&#160;</div></td><td style="width: 1.67%; vertical-align: bottom;"><div style="text-align: left; font-family: Times New Roman; color: #000000; font-size: 10pt;">&#160;</div></td><td colspan="6" style="border-bottom: #000000 2px solid; width: 23.21%; vertical-align: bottom;"><div style="text-align: center; font-family: Times New Roman''; color: #000000; font-size: 10pt; font-weight: bold;">Six Months Ended June 30,</div></td><td style="width: 1.67%; vertical-align: bottom;"><div style="text-align: left; font-family: Times New Roman; color: #000000; font-size: 10pt;">&#160;</div></td></tr><tr><td style="width: 46.93%; vertical-align: bottom;"><div style="text-align: left; font-family: Times New Roman; color: #000000; font-size: 10pt;">&#160;</div></td><td style="width: 1.67%; vertical-align: bottom;"><div style="text-align: left; font-family: Times New Roman; color: #000000; font-size: 10pt;">&#160;</div></td><td colspan="2" style="border-bottom: #000000 2px solid; width: 9.93%; vertical-align: bottom;"><div style="text-align: center; font-family: Times New Roman''; color: #000000; font-size: 10pt; font-weight: bold;">2013</div></td><td style="width: 1.67%; vertical-align: bottom;"><div style="text-align: left; font-family: Times New Roman; color: #000000; font-size: 10pt;">&#160;</div></td><td style="width: 1.67%; vertical-align: bottom;"><div style="text-align: left; font-family: Times New Roman; color: #000000; font-size: 10pt;">&#160;</div></td><td colspan="2" style="border-bottom: #000000 2px solid; width: 9.93%; vertical-align: bottom;"><div style="text-align: center; font-family: Times New Roman''; color: #000000; font-size: 10pt; font-weight: bold;">2012</div></td><td style="width: 1.67%; vertical-align: bottom;"><div style="text-align: left; font-family: Times New Roman; color: #000000; font-size: 10pt;">&#160;</div></td><td style="width: 1.67%; vertical-align: bottom;"><div style="text-align: left; font-family: Times New Roman; color: #000000; font-size: 10pt;">&#160;</div></td><td colspan="2" style="border-bottom: #000000 2px solid; width: 9.93%; vertical-align: bottom;"><div style="text-align: center; font-family: Times New Roman''; color: #000000; font-size: 10pt; font-weight: bold;">2013</div></td><td style="width: 1.67%; vertical-align: bottom;"><div style="text-align: left; font-family: Times New Roman; color: #000000; font-size: 10pt;">&#160;</div></td><td style="width: 1.67%; vertical-align: bottom;"><div style="text-align: left; font-family: Times New Roman; color: #000000; font-size: 10pt;">&#160;</div></td><td colspan="2" style="border-bottom: #000000 2px solid; width: 9.94%; vertical-align: bottom;"><div style="text-align: center; font-family: Times New Roman''; color: #000000; font-size: 10pt; font-weight: bold;">2012</div></td><td style="width: 1.67%; vertical-align: bottom;"><div style="text-align: left; font-family: Times New Roman; color: #000000; font-size: 10pt;">&#160;</div></td></tr><tr><td style="width: 46.93%; vertical-align: bottom;"><div style="text-align: left; font-family: Times New Roman; color: #000000; font-size: 10pt;">&#160;</div></td><td style="width: 1.67%; vertical-align: bottom;"><div style="text-align: left; font-family: Times New Roman; color: #000000; font-size: 10pt;">&#160;</div></td><td colspan="2" style="width: 9.93%; vertical-align: bottom;"><div>&#160;</div></td><td style="width: 1.67%; vertical-align: bottom;"><div style="text-align: left; font-family: Times New Roman; color: #000000; font-size: 10pt;">&#160;</div></td><td style="width: 1.67%; vertical-align: bottom;"><div style="text-align: left; font-family: Times New Roman; color: #000000; font-size: 10pt;">&#160;</div></td><td colspan="2" style="width: 9.93%; vertical-align: bottom;"><div>&#160;</div></td><td style="width: 1.67%; vertical-align: bottom;"><div style="text-align: left; font-family: Times New Roman; color: #000000; font-size: 10pt;">&#160;</div></td><td style="width: 1.67%; vertical-align: bottom;"><div style="text-align: left; font-family: Times New Roman; color: #000000; font-size: 10pt;">&#160;</div></td><td colspan="2" style="width: 9.93%; vertical-align: bottom;"><div>&#160;</div></td><td style="width: 1.67%; vertical-align: bottom;"><div style="text-align: left; font-family: Times New Roman; color: #000000; font-size: 10pt;">&#160;</div></td><td style="width: 1.67%; vertical-align: bottom;"><div style="text-align: left; font-family: Times New Roman; color: #000000; font-size: 10pt;">&#160;</div></td><td colspan="2" style="width: 9.94%; vertical-align: bottom;"><div>&#160;</div></td><td style="width: 1.67%; vertical-align: bottom;"><div style="text-align: left; font-family: Times New Roman; color: #000000; font-size: 10pt;">&#160;</div></td></tr><tr><td style="width: 46.93%; vertical-align: bottom;"><div style="text-align: left; text-indent: -7.2pt; font-family: Times New Roman''; color: #000000; margin-left: 7.2pt; font-size: 10pt;">Numerator:</div></td><td style="width: 1.67%; vertical-align: bottom;"><div style="text-align: left; font-family: Times New Roman; color: #000000; font-size: 10pt;">&#160;</div></td><td colspan="2" style="width: 9.93%; vertical-align: bottom;"><div>&#160;</div></td><td style="width: 1.67%; vertical-align: bottom;"><div style="text-align: left; font-family: Times New Roman; color: #000000; font-size: 10pt;">&#160;</div></td><td style="width: 1.67%; vertical-align: bottom;"><div style="text-align: left; font-family: Times New Roman; color: #000000; font-size: 10pt;">&#160;</div></td><td colspan="2" style="width: 9.93%; vertical-align: bottom;"><div>&#160;</div></td><td style="width: 1.67%; vertical-align: bottom;"><div style="text-align: left; font-family: Times New Roman; color: #000000; font-size: 10pt;">&#160;</div></td><td style="width: 1.67%; vertical-align: bottom;"><div style="text-align: left; font-family: Times New Roman; color: #000000; font-size: 10pt;">&#160;</div></td><td colspan="2" style="width: 9.93%; vertical-align: bottom;"><div>&#160;</div></td><td style="width: 1.67%; vertical-align: bottom;"><div style="text-align: left; font-family: Times New Roman; color: #000000; font-size: 10pt;">&#160;</div></td><td style="width: 1.67%; vertical-align: bottom;"><div style="text-align: left; font-family: Times New Roman; color: #000000; font-size: 10pt;">&#160;</div></td><td colspan="2" style="width: 9.94%; vertical-align: bottom;"><div>&#160;</div></td><td style="width: 1.67%; vertical-align: bottom;"><div style="text-align: left; font-family: Times New Roman; color: #000000; font-size: 10pt;">&#160;</div></td></tr><tr style="background-color: #cceeff;"><td style="width: 46.93%; vertical-align: bottom;"><div style="text-align: left; 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color: #000000; font-size: 10pt;">&#160;</div></td><td style="border-bottom: #000000 4px double; width: 1.67%; vertical-align: bottom;"><div style="text-align: left; font-family: Times New Roman''; color: #000000; font-size: 10pt;">$</div></td><td style="border-bottom: #000000 4px double; width: 8.26%; vertical-align: bottom;"><div style="text-align: right; font-family: Times New Roman''; color: #000000; font-size: 10pt;">490</div></td><td style="border-bottom: #000000 4px double; width: 1.67%; vertical-align: bottom;"><div style="text-align: left; font-family: Times New Roman; color: #000000; font-size: 10pt;">&#160;</div></td><td style="border-bottom: #000000 4px double; width: 1.67%; vertical-align: bottom;"><div style="text-align: left; font-family: Times New Roman; color: #000000; font-size: 10pt;">&#160;</div></td><td style="border-bottom: #000000 4px double; width: 1.67%; vertical-align: bottom;"><div style="text-align: left; font-family: Times New Roman''; color: #000000; font-size: 10pt;">$</div></td><td style="border-bottom: #000000 4px double; 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background-color: #ffffff; font-family: Times New Roman; color: #000000; font-size: 10pt;">&#160;</div></td><td style="width: 1.67%; vertical-align: bottom;"><div style="text-align: left; background-color: #ffffff; font-family: Times New Roman; color: #000000; font-size: 10pt;">&#160;</div></td><td style="width: 1.67%; vertical-align: bottom;"><div style="text-align: left; background-color: #ffffff; font-family: Times New Roman; color: #000000; font-size: 10pt;">&#160;</div></td><td style="width: 8.26%; vertical-align: bottom;"><div style="text-align: right; background-color: #ffffff; font-family: Times New Roman; color: #000000; font-size: 10pt;">&#160;</div></td><td style="width: 1.67%; vertical-align: bottom;"><div style="text-align: left; background-color: #ffffff; font-family: Times New Roman; color: #000000; font-size: 10pt;">&#160;</div></td><td style="width: 1.67%; vertical-align: bottom;"><div style="text-align: left; background-color: #ffffff; font-family: Times New Roman; color: #000000; font-size: 10pt;">&#160;</div></td><td style="width: 1.67%; vertical-align: bottom;"><div style="text-align: left; background-color: #ffffff; font-family: Times New Roman; color: #000000; font-size: 10pt;">&#160;</div></td><td style="width: 8.26%; vertical-align: bottom;"><div style="text-align: right; background-color: #ffffff; font-family: Times New Roman; color: #000000; font-size: 10pt;">&#160;</div></td><td style="width: 1.67%; vertical-align: bottom;"><div style="text-align: left; background-color: #ffffff; font-family: Times New Roman; color: #000000; font-size: 10pt;">&#160;</div></td><td style="width: 1.67%; vertical-align: bottom;"><div style="text-align: left; background-color: #ffffff; font-family: Times New Roman; color: #000000; font-size: 10pt;">&#160;</div></td><td style="width: 1.67%; vertical-align: bottom;"><div style="text-align: left; background-color: #ffffff; font-family: Times New Roman; color: #000000; font-size: 10pt;">&#160;</div></td><td style="width: 8.28%; 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Our products and solutions are designed to deliver continuous clean power, protecting customers from voltage fluctuations, such as surges and sags, and frequency fluctuations, and also to provide ride-through, or temporary, power to bridge the gap between a power outage and the restoration of utility power. Our target customers are those global enterprises requiring "power insurance" because they have zero tolerance for downtime in their mission critical operations. The Uninterruptible Power Supply ("UPS") products we manufacture use kinetic energy to provide short-term power as a cleaner alternative to electro-chemical battery-based energy. We sell stand-alone UPS products as well as complete continuous power and infrastructure solutions, including containerized continuous power systems that we brand as PowerHouse. We sell our products globally through our direct sales force, manufacturer's representatives, Original Equipment Manufacturer ("OEM") channels and IT partners. Our current principal markets are the Americas, Europe Middle East and Africa ("EMEA"), and Asia.</div><div><br /></div><div style="text-align: justify; text-indent: 27pt; font-family: Times New Roman''; color: #000000; font-size: 10pt;">The accompanying condensed consolidated balance sheet as of December 31, 2012, which has been derived from audited financial statements, and the unaudited interim condensed consolidated financial statements have been prepared in accordance with U.S. generally accepted accounting principles and include the accounts of the Company and its consolidated subsidiaries. In the opinion of management, the accompanying unaudited condensed consolidated financial statements contain all adjustments (consisting only of normal recurring items) necessary to present fairly the consolidated financial position of the Company and its consolidated results of operations and cash flows. These interim financial statements should be read in conjunction with the financial statements and accompanying notes included in the Company's Annual Report on Form 10-K for the year ended December 31, 2012. <br /></div></div> 715000 755000 353000 393000 10000 55000 0 0 0 435000 0 435000 0 121000 26753000 289562000 19000 123000 -262758000 -193000 288619000 19000 -144000 322000 25999000 -262817000 <div style="font-family: 'Times New Roman', Times, serif; font-size: 10pt;"><table cellpadding="0" cellspacing="0" style="width: 100%; font-family: 'Times New Roman', Times, serif; font-size: 10pt;"><tr><td style="width: 7.46%; vertical-align: top; font-weight: bold;"><div style="text-align: left; font-family: Times New Roman''; color: #000000; font-size: 10pt;">2.</div></td><td style="width: 92.54%; vertical-align: top;"><div style="text-align: left; font-family: Times New Roman''; color: #000000; font-size: 10pt; font-weight: bold;">Supplemental Balance Sheet Information</div></td></tr></table><div><br /></div><div style="text-align: left; font-family: Times New Roman''; color: #000000; margin-left: 27pt; font-size: 10pt; font-weight: bold;">Restricted Cash</div><div><br /></div><div style="text-align: left; text-indent: 27pt; font-family: Times New Roman''; color: #000000; font-size: 10pt;">Our restricted cash balance of $0.6 million as of June 30, 2013 consists primarily of secured performance and deposit guarantees given to customers. 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text-indent: 27pt; font-family: Times New Roman''; color: #000000; font-size: 10pt;">We estimate an allowance for doubtful accounts based on factors related to the credit risk of each customer. Historically, our credit losses have been minimal.</div><div><br /></div><div style="text-align: left; font-family: Times New Roman''; color: #000000; margin-left: 27pt; font-size: 10pt; font-weight: bold;">Inventory</div><div><br /></div><div style="text-align: left; font-family: Times New Roman''; color: #000000; margin-left: 27pt; font-size: 10pt;">We state inventories at the lower of cost or market, using the first-in-first-out-method (in thousands):</div><div><br /></div><table cellpadding="0" cellspacing="0" style="width: 100%; font-family: 'Times New Roman', Times, serif; font-size: 10pt;"><tr><td style="width: 72.6%; vertical-align: bottom;"><div style="text-align: left; font-family: Times New Roman; color: #000000; font-size: 10pt;">&#160;</div></td><td style="width: 1.67%; vertical-align: bottom;"><div style="text-align: left; font-family: Times New Roman; color: #000000; font-size: 10pt;">&#160;</div></td><td colspan="2" style="border-bottom: #000000 2px solid; width: 10.33%; vertical-align: bottom;"><div>&#160;</div></td><td style="width: 1.67%; vertical-align: bottom;"><div style="text-align: left; font-family: Times New Roman; color: #000000; font-size: 10pt;">&#160;</div></td><td style="width: 1.67%; vertical-align: bottom;"><div style="text-align: left; font-family: Times New Roman; color: #000000; font-size: 10pt;">&#160;</div></td><td colspan="2" style="border-bottom: #000000 2px solid; width: 10.4%; vertical-align: bottom;"><div>&#160;</div></td><td style="width: 1.67%; vertical-align: bottom;"><div style="text-align: left; font-family: Times New Roman; color: #000000; font-size: 10pt;">&#160;</div></td></tr><tr><td style="width: 72.6%; vertical-align: bottom;"><div style="text-align: left; font-family: Times New Roman; color: #000000; font-size: 10pt;">&#160;</div></td><td style="width: 1.67%; vertical-align: bottom;"><div style="text-align: left; font-family: Times New Roman; color: #000000; font-size: 10pt;">&#160;</div></td><td colspan="2" style="border-bottom: #000000 2px solid; width: 10.33%; vertical-align: bottom;"><div style="text-align: center; font-family: Times New Roman''; color: #000000; font-size: 10pt; font-weight: bold;">June 30, 2013</div></td><td style="width: 1.67%; vertical-align: bottom;"><div style="text-align: left; font-family: Times New Roman; color: #000000; font-size: 10pt;">&#160;</div></td><td style="width: 1.67%; vertical-align: bottom;"><div style="text-align: left; font-family: Times New Roman; color: #000000; font-size: 10pt;">&#160;</div></td><td colspan="2" style="border-bottom: #000000 2px solid; width: 10.4%; vertical-align: bottom;"><div style="text-align: center; font-family: Times New Roman''; color: #000000; font-size: 10pt; font-weight: bold;">December 31, 2012</div></td><td style="width: 1.67%; vertical-align: bottom;"><div style="text-align: left; font-family: Times New Roman; color: #000000; font-size: 10pt;">&#160;</div></td></tr><tr style="background-color: #cceeff;"><td style="width: 72.6%; vertical-align: bottom;"><div style="text-align: left; text-indent: -7.2pt; font-family: Times New Roman''; color: #000000; margin-left: 7.2pt; font-size: 10pt;">Raw materials</div></td><td style="width: 1.67%; vertical-align: bottom;"><div style="text-align: left; font-family: Times New Roman; color: #000000; font-size: 10pt;">&#160;</div></td><td style="width: 1.67%; vertical-align: bottom;"><div style="text-align: left; font-family: Times New Roman''; color: #000000; font-size: 10pt;">$</div></td><td style="width: 8.67%; vertical-align: bottom;"><div style="text-align: right; font-family: Times New Roman''; color: #000000; font-size: 10pt;">7,021</div></td><td style="width: 1.67%; vertical-align: bottom;"><div style="text-align: left; font-family: Times New Roman; color: #000000; font-size: 10pt;">&#160;</div></td><td style="width: 1.67%; vertical-align: bottom;"><div style="text-align: left; font-family: Times New Roman; color: #000000; font-size: 10pt;">&#160;</div></td><td style="width: 1.67%; vertical-align: bottom;"><div style="text-align: left; font-family: Times New Roman''; color: #000000; font-size: 10pt;">$</div></td><td style="width: 8.74%; vertical-align: bottom;"><div style="text-align: right; font-family: Times New Roman''; color: #000000; font-size: 10pt;">6,983</div></td><td style="width: 1.67%; vertical-align: bottom;"><div style="text-align: left; font-family: Times New Roman; color: #000000; font-size: 10pt;">&#160;</div></td></tr><tr style="background-color: #ffffff;"><td style="width: 72.6%; vertical-align: bottom;"><div style="text-align: left; background-color: #ffffff; text-indent: -7.2pt; font-family: Times New Roman''; color: #000000; margin-left: 7.2pt; font-size: 10pt;">Work in process</div></td><td style="width: 1.67%; vertical-align: bottom;"><div style="text-align: left; background-color: #ffffff; font-family: Times New Roman; color: #000000; font-size: 10pt;">&#160;</div></td><td style="width: 1.67%; vertical-align: bottom;"><div style="text-align: left; background-color: #ffffff; font-family: Times New Roman; color: #000000; font-size: 10pt;">&#160;</div></td><td style="width: 8.67%; vertical-align: bottom;"><div style="text-align: right; background-color: #ffffff; font-family: Times New Roman''; color: #000000; font-size: 10pt;">2,636</div></td><td style="width: 1.67%; vertical-align: bottom;"><div style="text-align: left; background-color: #ffffff; font-family: Times New Roman; color: #000000; font-size: 10pt;">&#160;</div></td><td style="width: 1.67%; vertical-align: bottom;"><div style="text-align: left; background-color: #ffffff; font-family: Times New Roman; color: #000000; font-size: 10pt;">&#160;</div></td><td style="width: 1.67%; vertical-align: bottom;"><div style="text-align: left; background-color: #ffffff; font-family: Times New Roman; color: #000000; font-size: 10pt;">&#160;</div></td><td style="width: 8.74%; vertical-align: bottom;"><div style="text-align: right; background-color: #ffffff; font-family: Times New Roman''; color: #000000; font-size: 10pt;">2,429</div></td><td style="width: 1.67%; vertical-align: bottom;"><div style="text-align: left; background-color: #ffffff; font-family: Times New Roman; color: #000000; font-size: 10pt;">&#160;</div></td></tr><tr style="background-color: #cceeff;"><td style="width: 72.6%; vertical-align: bottom;"><div style="text-align: left; text-indent: -7.2pt; font-family: Times New Roman''; color: #000000; margin-left: 7.2pt; font-size: 10pt;">Finished goods</div></td><td style="width: 1.67%; vertical-align: bottom;"><div style="text-align: left; font-family: Times New Roman; color: #000000; font-size: 10pt;">&#160;</div></td><td style="width: 1.67%; vertical-align: bottom;"><div style="text-align: left; font-family: Times New Roman; color: #000000; font-size: 10pt;">&#160;</div></td><td style="width: 8.67%; vertical-align: bottom;"><div style="text-align: right; font-family: Times New Roman''; color: #000000; font-size: 10pt;">3,390</div></td><td style="width: 1.67%; vertical-align: bottom;"><div style="text-align: left; font-family: Times New Roman; color: #000000; font-size: 10pt;">&#160;</div></td><td style="width: 1.67%; vertical-align: bottom;"><div style="text-align: left; font-family: Times New Roman; color: #000000; font-size: 10pt;">&#160;</div></td><td style="width: 1.67%; vertical-align: bottom;"><div style="text-align: left; font-family: Times New Roman; color: #000000; font-size: 10pt;">&#160;</div></td><td style="width: 8.74%; vertical-align: bottom;"><div style="text-align: right; font-family: Times New Roman''; color: #000000; font-size: 10pt;">3,516</div></td><td style="width: 1.67%; vertical-align: bottom;"><div style="text-align: left; font-family: Times New Roman; color: #000000; font-size: 10pt;">&#160;</div></td></tr><tr style="background-color: #ffffff;"><td style="width: 72.6%; vertical-align: bottom;"><div style="text-align: left; background-color: #ffffff; text-indent: -7.2pt; font-family: Times New Roman''; color: #000000; margin-left: 7.2pt; font-size: 10pt;">Allowances for obsolescence</div></td><td style="width: 1.67%; vertical-align: bottom;"><div style="text-align: left; background-color: #ffffff; font-family: Times New Roman; color: #000000; font-size: 10pt;">&#160;</div></td><td style="border-bottom: #000000 2px solid; width: 1.67%; vertical-align: bottom;"><div style="text-align: left; background-color: #ffffff; font-family: Times New Roman; color: #000000; font-size: 10pt;">&#160;</div></td><td style="border-bottom: #000000 2px solid; width: 8.67%; vertical-align: bottom;"><div style="text-align: right; background-color: #ffffff; font-family: Times New Roman''; color: #000000; font-size: 10pt;">(1,134</div></td><td style="border-bottom: #000000 2px solid; width: 1.67%; vertical-align: bottom;"><div style="text-align: left; background-color: #ffffff; font-family: Times New Roman''; color: #000000; font-size: 10pt;">)</div></td><td style="border-bottom: #000000 2px solid; width: 1.67%; vertical-align: bottom;"><div style="text-align: left; background-color: #ffffff; font-family: Times New Roman; color: #000000; font-size: 10pt;">&#160;</div></td><td style="border-bottom: #000000 2px solid; width: 1.67%; vertical-align: bottom;"><div style="text-align: left; background-color: #ffffff; font-family: Times New Roman; color: #000000; font-size: 10pt;">&#160;</div></td><td style="border-bottom: #000000 2px solid; width: 8.74%; vertical-align: bottom;"><div style="text-align: right; background-color: #ffffff; font-family: Times New Roman''; color: #000000; font-size: 10pt;">(1,849</div></td><td style="width: 1.67%; vertical-align: bottom;"><div style="text-align: left; background-color: #ffffff; font-family: Times New Roman''; color: #000000; font-size: 10pt;">)</div></td></tr><tr style="background-color: #cceeff;"><td style="width: 72.6%; vertical-align: bottom;"><div style="text-align: left; font-family: Times New Roman; color: #000000; font-size: 10pt;">&#160;</div></td><td style="width: 1.67%; vertical-align: bottom;"><div style="text-align: left; font-family: Times New Roman; color: #000000; font-size: 10pt;">&#160;</div></td><td style="border-bottom: #000000 4px double; width: 1.67%; vertical-align: bottom;"><div style="text-align: left; font-family: Times New Roman''; color: #000000; font-size: 10pt;">$</div></td><td style="border-bottom: #000000 4px double; width: 8.67%; vertical-align: bottom;"><div style="text-align: right; font-family: Times New Roman''; color: #000000; font-size: 10pt;">11,913</div></td><td style="border-bottom: #000000 4px double; width: 1.67%; vertical-align: bottom;"><div style="text-align: left; font-family: Times New Roman; color: #000000; font-size: 10pt;">&#160;</div></td><td style="border-bottom: #000000 4px double; width: 1.67%; vertical-align: bottom;"><div style="text-align: left; font-family: Times New Roman; color: #000000; font-size: 10pt;">&#160;</div></td><td style="border-bottom: #000000 4px double; width: 1.67%; vertical-align: bottom;"><div style="text-align: left; font-family: Times New Roman''; color: #000000; font-size: 10pt;">$</div></td><td style="border-bottom: #000000 4px double; width: 8.74%; vertical-align: bottom;"><div style="text-align: right; font-family: Times New Roman''; color: #000000; font-size: 10pt;">11,079</div></td><td style="width: 1.67%; vertical-align: bottom;"><div style="text-align: left; font-family: Times New Roman; color: #000000; font-size: 10pt;">&#160;</div></td></tr></table><div><br /></div><div style="text-align: left; font-family: Times New Roman''; color: #000000; margin-left: 27pt; font-size: 10pt; font-weight: bold;">Property and Equipment</div><div><br /></div><div style="text-align: left; text-indent: 27pt; font-family: Times New Roman''; color: #000000; font-size: 10pt;">Property and equipment consist of the following (in thousands):</div><div><br /></div><table cellpadding="0" cellspacing="0" style="width: 100%; font-family: 'Times New Roman', Times, serif; font-size: 10pt;"><tr><td style="width: 72.6%; vertical-align: bottom;"><div style="text-align: left; font-family: Times New Roman; color: #000000; font-size: 10pt;">&#160;</div></td><td style="width: 1.67%; vertical-align: bottom;"><div style="text-align: left; font-family: Times New Roman; color: #000000; font-size: 10pt;">&#160;</div></td><td colspan="2" style="border-bottom: #000000 2px solid; width: 10.33%; vertical-align: bottom;"><div style="text-align: center; font-family: Times New Roman''; color: #000000; font-size: 10pt; font-weight: bold;">June 30, 2013</div></td><td style="width: 1.67%; vertical-align: bottom;"><div style="text-align: left; font-family: Times New Roman; color: #000000; font-size: 10pt;">&#160;</div></td><td style="width: 1.67%; vertical-align: bottom;"><div style="text-align: left; font-family: Times New Roman; color: #000000; font-size: 10pt;">&#160;</div></td><td colspan="2" style="border-bottom: #000000 2px solid; width: 10.4%; vertical-align: bottom;"><div style="text-align: center; font-family: Times New Roman''; color: #000000; font-size: 10pt; font-weight: bold;">December 31, 2012</div></td><td style="width: 1.67%; vertical-align: bottom;"><div style="text-align: left; font-family: Times New Roman; color: #000000; font-size: 10pt;">&#160;</div></td></tr><tr style="background-color: #cceeff;"><td style="width: 72.6%; vertical-align: bottom;"><div style="text-align: left; text-indent: -7.2pt; font-family: Times New Roman''; color: #000000; margin-left: 7.2pt; font-size: 10pt;">Equipment</div></td><td style="width: 1.67%; vertical-align: bottom;"><div style="text-align: left; font-family: Times New Roman; color: #000000; font-size: 10pt;">&#160;</div></td><td style="width: 1.67%; vertical-align: bottom;"><div style="text-align: left; font-family: Times New Roman''; color: #000000; font-size: 10pt;">$</div></td><td style="width: 8.67%; vertical-align: bottom;"><div style="text-align: right; font-family: Times New Roman''; color: #000000; font-size: 10pt;">11,150</div></td><td style="width: 1.67%; vertical-align: bottom;"><div style="text-align: left; font-family: Times New Roman; color: #000000; font-size: 10pt;">&#160;</div></td><td style="width: 1.67%; vertical-align: bottom;"><div style="text-align: left; font-family: Times New Roman; color: #000000; font-size: 10pt;">&#160;</div></td><td style="width: 1.67%; vertical-align: bottom;"><div style="text-align: left; font-family: Times New Roman''; color: #000000; font-size: 10pt;">$</div></td><td style="width: 8.74%; vertical-align: bottom;"><div style="text-align: right; font-family: Times New Roman''; color: #000000; font-size: 10pt;">10,298</div></td><td style="width: 1.67%; vertical-align: bottom;"><div style="text-align: left; font-family: Times New Roman; color: #000000; font-size: 10pt;">&#160;</div></td></tr><tr style="background-color: #ffffff;"><td style="width: 72.6%; vertical-align: bottom;"><div style="text-align: left; background-color: #ffffff; text-indent: -7.2pt; font-family: Times New Roman''; color: #000000; margin-left: 7.2pt; font-size: 10pt;">Demonstration units</div></td><td style="width: 1.67%; vertical-align: bottom;"><div style="text-align: left; background-color: #ffffff; font-family: Times New Roman; color: #000000; font-size: 10pt;">&#160;</div></td><td style="width: 1.67%; vertical-align: bottom;"><div style="text-align: left; background-color: #ffffff; font-family: Times New Roman; color: #000000; font-size: 10pt;">&#160;</div></td><td style="width: 8.67%; vertical-align: bottom;"><div style="text-align: right; background-color: #ffffff; font-family: Times New Roman''; color: #000000; font-size: 10pt;">1,801</div></td><td style="width: 1.67%; vertical-align: bottom;"><div style="text-align: left; background-color: #ffffff; font-family: Times New Roman; color: #000000; font-size: 10pt;">&#160;</div></td><td style="width: 1.67%; vertical-align: bottom;"><div style="text-align: left; background-color: #ffffff; font-family: Times New Roman; color: #000000; font-size: 10pt;">&#160;</div></td><td style="width: 1.67%; vertical-align: bottom;"><div style="text-align: left; background-color: #ffffff; font-family: Times New Roman; color: #000000; font-size: 10pt;">&#160;</div></td><td style="width: 8.74%; vertical-align: bottom;"><div style="text-align: right; background-color: #ffffff; font-family: Times New Roman''; color: #000000; font-size: 10pt;">1,828</div></td><td style="width: 1.67%; vertical-align: bottom;"><div style="text-align: left; background-color: #ffffff; font-family: Times New Roman; color: #000000; font-size: 10pt;">&#160;</div></td></tr><tr style="background-color: #cceeff;"><td style="width: 72.6%; vertical-align: bottom;"><div style="text-align: left; text-indent: -7.2pt; font-family: Times New Roman''; color: #000000; margin-left: 7.2pt; font-size: 10pt;">Computers and purchased software</div></td><td style="width: 1.67%; vertical-align: bottom;"><div style="text-align: left; font-family: Times New Roman; color: #000000; font-size: 10pt;">&#160;</div></td><td style="width: 1.67%; vertical-align: bottom;"><div style="text-align: left; font-family: Times New Roman; color: #000000; font-size: 10pt;">&#160;</div></td><td style="width: 8.67%; vertical-align: bottom;"><div style="text-align: right; font-family: Times New Roman''; color: #000000; font-size: 10pt;">4,366</div></td><td style="width: 1.67%; vertical-align: bottom;"><div style="text-align: left; font-family: Times New Roman; color: #000000; font-size: 10pt;">&#160;</div></td><td style="width: 1.67%; vertical-align: bottom;"><div style="text-align: left; font-family: Times New Roman; color: #000000; font-size: 10pt;">&#160;</div></td><td style="width: 1.67%; vertical-align: bottom;"><div style="text-align: left; font-family: Times New Roman; color: #000000; font-size: 10pt;">&#160;</div></td><td style="width: 8.74%; vertical-align: bottom;"><div style="text-align: right; font-family: Times New Roman''; color: #000000; font-size: 10pt;">4,251</div></td><td style="width: 1.67%; vertical-align: bottom;"><div style="text-align: left; font-family: Times New Roman; color: #000000; font-size: 10pt;">&#160;</div></td></tr><tr style="background-color: #ffffff;"><td style="width: 72.6%; vertical-align: bottom;"><div style="text-align: left; background-color: #ffffff; text-indent: -7.2pt; font-family: Times New Roman''; color: #000000; margin-left: 7.2pt; font-size: 10pt;">Furniture and fixtures</div></td><td style="width: 1.67%; vertical-align: bottom;"><div style="text-align: left; background-color: #ffffff; font-family: Times New Roman; color: #000000; font-size: 10pt;">&#160;</div></td><td style="width: 1.67%; vertical-align: bottom;"><div style="text-align: left; background-color: #ffffff; font-family: Times New Roman; color: #000000; font-size: 10pt;">&#160;</div></td><td style="width: 8.67%; vertical-align: bottom;"><div style="text-align: right; background-color: #ffffff; font-family: Times New Roman''; color: #000000; font-size: 10pt;">461</div></td><td style="width: 1.67%; vertical-align: bottom;"><div style="text-align: left; background-color: #ffffff; font-family: Times New Roman; color: #000000; font-size: 10pt;">&#160;</div></td><td style="width: 1.67%; vertical-align: bottom;"><div style="text-align: left; background-color: #ffffff; font-family: Times New Roman; color: #000000; font-size: 10pt;">&#160;</div></td><td style="width: 1.67%; vertical-align: bottom;"><div style="text-align: left; background-color: #ffffff; font-family: Times New Roman; color: #000000; font-size: 10pt;">&#160;</div></td><td style="width: 8.74%; vertical-align: bottom;"><div style="text-align: right; background-color: #ffffff; font-family: Times New Roman''; color: #000000; font-size: 10pt;">444</div></td><td style="width: 1.67%; vertical-align: bottom;"><div style="text-align: left; background-color: #ffffff; font-family: Times New Roman; color: #000000; font-size: 10pt;">&#160;</div></td></tr><tr style="background-color: #cceeff;"><td style="width: 72.6%; vertical-align: bottom;"><div style="text-align: left; text-indent: -7.2pt; font-family: Times New Roman''; color: #000000; margin-left: 7.2pt; font-size: 10pt;">Leasehold improvements</div></td><td style="width: 1.67%; vertical-align: bottom;"><div style="text-align: left; font-family: Times New Roman; color: #000000; font-size: 10pt;">&#160;</div></td><td style="width: 1.67%; vertical-align: bottom;"><div style="text-align: left; font-family: Times New Roman; color: #000000; font-size: 10pt;">&#160;</div></td><td style="width: 8.67%; vertical-align: bottom;"><div style="text-align: right; font-family: Times New Roman''; color: #000000; font-size: 10pt;">7,788</div></td><td style="width: 1.67%; vertical-align: bottom;"><div style="text-align: left; font-family: Times New Roman; color: #000000; font-size: 10pt;">&#160;</div></td><td style="width: 1.67%; vertical-align: bottom;"><div style="text-align: left; font-family: Times New Roman; color: #000000; font-size: 10pt;">&#160;</div></td><td style="width: 1.67%; vertical-align: bottom;"><div style="text-align: left; font-family: Times New Roman; color: #000000; font-size: 10pt;">&#160;</div></td><td style="width: 8.74%; vertical-align: bottom;"><div style="text-align: right; font-family: Times New Roman''; color: #000000; font-size: 10pt;">7,662</div></td><td style="width: 1.67%; vertical-align: bottom;"><div style="text-align: left; font-family: Times New Roman; color: #000000; font-size: 10pt;">&#160;</div></td></tr><tr style="background-color: #ffffff;"><td style="width: 72.6%; vertical-align: bottom;"><div style="text-align: left; background-color: #ffffff; text-indent: -7.2pt; font-family: Times New Roman''; color: #000000; margin-left: 7.2pt; font-size: 10pt;">Construction in progress</div></td><td style="width: 1.67%; vertical-align: bottom;"><div style="text-align: left; background-color: #ffffff; font-family: Times New Roman; color: #000000; font-size: 10pt;">&#160;</div></td><td style="border-bottom: #000000 2px solid; width: 1.67%; vertical-align: bottom;"><div style="text-align: left; background-color: #ffffff; font-family: Times New Roman; color: #000000; font-size: 10pt;">&#160;</div></td><td style="border-bottom: #000000 2px solid; width: 8.67%; vertical-align: bottom;"><div style="text-align: right; background-color: #ffffff; font-family: Times New Roman''; 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font-family: Times New Roman; color: #000000; font-size: 10pt;">&#160;</div></td><td style="width: 1.67%; vertical-align: bottom;"><div style="text-align: left; font-family: Times New Roman; color: #000000; font-size: 10pt;">&#160;</div></td><td style="width: 8.74%; vertical-align: bottom;"><div style="text-align: right; font-family: Times New Roman''; color: #000000; font-size: 10pt;">24,671</div></td><td style="width: 1.67%; vertical-align: bottom;"><div style="text-align: left; font-family: Times New Roman; color: #000000; font-size: 10pt;">&#160;</div></td></tr><tr style="background-color: #ffffff;"><td style="width: 72.6%; vertical-align: bottom;"><div style="text-align: left; background-color: #ffffff; text-indent: -7.2pt; font-family: Times New Roman''; color: #000000; margin-left: 7.2pt; font-size: 10pt;">Accumulated depreciation</div></td><td style="width: 1.67%; vertical-align: bottom;"><div style="text-align: left; background-color: #ffffff; font-family: Times New Roman; color: #000000; 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vertical-align: bottom;"><div style="text-align: left; text-indent: -7.2pt; font-family: Times New Roman''; color: #000000; margin-left: 7.2pt; font-size: 10pt;">Compensation and benefits</div></td><td style="width: 1.67%; vertical-align: bottom;"><div style="text-align: left; font-family: Times New Roman; color: #000000; font-size: 10pt;">&#160;</div></td><td style="width: 1.67%; vertical-align: bottom;"><div style="text-align: left; font-family: Times New Roman''; color: #000000; font-size: 10pt;">$</div></td><td style="width: 8.67%; vertical-align: bottom;"><div style="text-align: right; font-family: Times New Roman''; color: #000000; font-size: 10pt;">2,113</div></td><td style="width: 1.67%; vertical-align: bottom;"><div style="text-align: left; font-family: Times New Roman; color: #000000; font-size: 10pt;">&#160;</div></td><td style="width: 1.67%; vertical-align: bottom;"><div style="text-align: left; font-family: Times New Roman; color: #000000; font-size: 10pt;">&#160;</div></td><td style="width: 1.67%; vertical-align: bottom;"><div style="text-align: left; font-family: Times New Roman''; color: #000000; font-size: 10pt;">$</div></td><td style="width: 8.74%; vertical-align: bottom;"><div style="text-align: right; font-family: Times New Roman''; color: #000000; font-size: 10pt;">2,199</div></td><td style="width: 1.67%; vertical-align: bottom;"><div style="text-align: left; font-family: Times New Roman; color: #000000; font-size: 10pt;">&#160;</div></td></tr><tr style="background-color: #ffffff;"><td style="width: 72.6%; vertical-align: bottom;"><div style="text-align: left; background-color: #ffffff; text-indent: -7.2pt; font-family: Times New Roman''; color: #000000; margin-left: 7.2pt; font-size: 10pt;">Warranty liability</div></td><td style="width: 1.67%; vertical-align: bottom;"><div style="text-align: left; background-color: #ffffff; font-family: Times New Roman; color: #000000; font-size: 10pt;">&#160;</div></td><td style="width: 1.67%; vertical-align: bottom;"><div style="text-align: left; background-color: #ffffff; font-family: Times New Roman; color: #000000; font-size: 10pt;">&#160;</div></td><td style="width: 8.67%; vertical-align: bottom;"><div style="text-align: right; background-color: #ffffff; font-family: Times New Roman''; color: #000000; font-size: 10pt;">669</div></td><td style="width: 1.67%; vertical-align: bottom;"><div style="text-align: left; background-color: #ffffff; font-family: Times New Roman; color: #000000; font-size: 10pt;">&#160;</div></td><td style="width: 1.67%; vertical-align: bottom;"><div style="text-align: left; background-color: #ffffff; font-family: Times New Roman; color: #000000; font-size: 10pt;">&#160;</div></td><td style="width: 1.67%; vertical-align: bottom;"><div style="text-align: left; background-color: #ffffff; font-family: Times New Roman; color: #000000; font-size: 10pt;">&#160;</div></td><td style="width: 8.74%; vertical-align: bottom;"><div style="text-align: right; background-color: #ffffff; font-family: Times New Roman''; color: #000000; font-size: 10pt;">694</div></td><td style="width: 1.67%; vertical-align: bottom;"><div style="text-align: left; background-color: #ffffff; font-family: Times New Roman; color: #000000; font-size: 10pt;">&#160;</div></td></tr><tr style="background-color: #cceeff;"><td style="width: 72.6%; vertical-align: bottom;"><div style="text-align: left; text-indent: -7.2pt; font-family: Times New Roman''; color: #000000; margin-left: 7.2pt; font-size: 10pt;">Property, income, state, sales and franchise tax</div></td><td style="width: 1.67%; vertical-align: bottom;"><div style="text-align: left; font-family: Times New Roman; color: #000000; font-size: 10pt;">&#160;</div></td><td style="width: 1.67%; vertical-align: bottom;"><div style="text-align: left; font-family: Times New Roman; color: #000000; font-size: 10pt;">&#160;</div></td><td style="width: 8.67%; vertical-align: bottom;"><div style="text-align: right; font-family: Times New Roman''; color: #000000; font-size: 10pt;">682</div></td><td style="width: 1.67%; vertical-align: bottom;"><div style="text-align: left; font-family: Times New Roman; color: #000000; font-size: 10pt;">&#160;</div></td><td style="width: 1.67%; vertical-align: bottom;"><div style="text-align: left; font-family: Times New Roman; color: #000000; font-size: 10pt;">&#160;</div></td><td style="width: 1.67%; vertical-align: bottom;"><div style="text-align: left; font-family: Times New Roman; color: #000000; font-size: 10pt;">&#160;</div></td><td style="width: 8.74%; vertical-align: bottom;"><div style="text-align: right; font-family: Times New Roman''; color: #000000; font-size: 10pt;">320</div></td><td style="width: 1.67%; vertical-align: bottom;"><div style="text-align: left; font-family: Times New Roman; color: #000000; font-size: 10pt;">&#160;</div></td></tr><tr style="background-color: #ffffff;"><td style="width: 72.6%; vertical-align: bottom;"><div style="text-align: left; background-color: #ffffff; text-indent: -7.2pt; font-family: Times New Roman''; color: #000000; 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vertical-align: bottom;"><div style="text-align: left; background-color: #ffffff; font-family: Times New Roman; color: #000000; font-size: 10pt;">&#160;</div></td><td style="width: 8.74%; vertical-align: bottom;"><div style="text-align: right; background-color: #ffffff; font-family: Times New Roman''; color: #000000; font-size: 10pt;">502</div></td><td style="width: 1.67%; vertical-align: bottom;"><div style="text-align: left; background-color: #ffffff; font-family: Times New Roman; color: #000000; font-size: 10pt;">&#160;</div></td></tr><tr style="background-color: #cceeff;"><td style="width: 72.6%; vertical-align: bottom;"><div style="text-align: left; text-indent: -7.2pt; font-family: Times New Roman''; color: #000000; margin-left: 7.2pt; font-size: 10pt;">Other</div></td><td style="width: 1.67%; vertical-align: bottom;"><div style="text-align: left; font-family: Times New Roman; color: #000000; font-size: 10pt;">&#160;</div></td><td style="border-bottom: #000000 2px solid; width: 1.67%; vertical-align: bottom;"><div style="text-align: left; font-family: Times New Roman; color: #000000; font-size: 10pt;">&#160;</div></td><td style="border-bottom: #000000 2px solid; width: 8.67%; vertical-align: bottom;"><div style="text-align: right; font-family: Times New Roman''; color: #000000; font-size: 10pt;">1,594</div></td><td style="border-bottom: #000000 2px solid; width: 1.67%; vertical-align: bottom;"><div style="text-align: left; font-family: Times New Roman; color: #000000; font-size: 10pt;">&#160;</div></td><td style="border-bottom: #000000 2px solid; width: 1.67%; vertical-align: bottom;"><div style="text-align: left; font-family: Times New Roman; color: #000000; font-size: 10pt;">&#160;</div></td><td style="border-bottom: #000000 2px solid; width: 1.67%; vertical-align: bottom;"><div style="text-align: left; font-family: Times New Roman; color: #000000; font-size: 10pt;">&#160;</div></td><td style="border-bottom: #000000 2px solid; width: 8.74%; vertical-align: bottom;"><div style="text-align: right; font-family: Times New Roman''; color: #000000; font-size: 10pt;">1,233</div></td><td style="width: 1.67%; vertical-align: bottom;"><div style="text-align: left; font-family: Times New Roman; color: #000000; font-size: 10pt;">&#160;</div></td></tr><tr style="background-color: #ffffff;"><td style="width: 72.6%; vertical-align: bottom;"><div style="text-align: left; background-color: #ffffff; font-family: Times New Roman; color: #000000; font-size: 10pt;">&#160;</div></td><td style="width: 1.67%; vertical-align: bottom;"><div style="text-align: left; background-color: #ffffff; font-family: Times New Roman; color: #000000; font-size: 10pt;">&#160;</div></td><td style="border-bottom: #000000 4px double; width: 1.67%; vertical-align: bottom;"><div style="text-align: left; background-color: #ffffff; font-family: Times New Roman''; color: #000000; font-size: 10pt;">$</div></td><td style="border-bottom: #000000 4px double; width: 8.67%; vertical-align: bottom;"><div style="text-align: right; background-color: #ffffff; font-family: Times New Roman''; color: #000000; font-size: 10pt;">5,450</div></td><td style="border-bottom: #000000 4px double; width: 1.67%; vertical-align: bottom;"><div style="text-align: left; background-color: #ffffff; font-family: Times New Roman; color: #000000; font-size: 10pt;">&#160;</div></td><td style="border-bottom: #000000 4px double; width: 1.67%; vertical-align: bottom;"><div style="text-align: left; background-color: #ffffff; font-family: Times New Roman; color: #000000; font-size: 10pt;">&#160;</div></td><td style="border-bottom: #000000 4px double; width: 1.67%; vertical-align: bottom;"><div style="text-align: left; background-color: #ffffff; font-family: Times New Roman''; color: #000000; font-size: 10pt;">$</div></td><td style="border-bottom: #000000 4px double; width: 8.74%; vertical-align: bottom;"><div style="text-align: right; background-color: #ffffff; font-family: Times New Roman''; color: #000000; font-size: 10pt;">4,948</div></td><td style="width: 1.67%; vertical-align: bottom;"><div style="text-align: left; background-color: #ffffff; font-family: Times New Roman; color: #000000; font-size: 10pt;">&#160;</div></td></tr></table><div><br /></div><div style="text-align: left; font-family: Times New Roman''; color: #000000; margin-left: 27pt; font-size: 10pt; font-weight: bold;">Warranty Liability</div><div><br /></div><div style="text-align: justify; text-indent: 27pt; font-family: Times New Roman''; color: #000000; font-size: 10pt;">Generally, the warranty period for our power quality products is 12 months from the date of commissioning or 18 months from the date of shipment from Active Power, whichever period is shorter. Occasionally, we offer longer warranty periods to certain customers. The warranty period for products sold to our primary OEM customer, Caterpillar, is 12 months from the date of shipment to the end-user, or up to 36 months from shipment. This is dependent upon Caterpillar complying with our storage requirements for our products in order to preserve this warranty period beyond the standard 18-month limit. We provide for the estimated cost of product warranties at the time revenue is recognized and this accrual is included in accrued expenses and long-term liabilities on the accompanying consolidated balance sheet.</div><div><br /></div><div style="text-align: left; font-family: Times New Roman''; color: #000000; margin-left: 27pt; font-size: 10pt;">Changes in our warranty liability are presented in the following table (in thousands):</div><div><br /></div><table cellpadding="0" cellspacing="0" style="width: 100%; font-family: 'Times New Roman', Times, serif; font-size: 10pt;"><tr style="background-color: #cceeff;"><td style="width: 86.72%; vertical-align: bottom;"><div style="text-align: left; text-indent: -7.2pt; font-family: Times New Roman''; color: #000000; margin-left: 7.2pt; font-size: 10pt;">Balance at December 31, 2012</div></td><td style="width: 1.67%; vertical-align: bottom;"><div style="text-align: left; font-family: Times New Roman; color: #000000; font-size: 10pt;">&#160;</div></td><td style="width: 1.67%; vertical-align: bottom;"><div style="text-align: left; font-family: Times New Roman''; color: #000000; font-size: 10pt;">$</div></td><td style="width: 8.94%; vertical-align: bottom;"><div style="text-align: right; font-family: Times New Roman''; color: #000000; font-size: 10pt;">755</div></td><td style="width: 1%; vertical-align: bottom;"><div style="text-align: left; font-family: Times New Roman; color: #000000; font-size: 10pt;">&#160;</div></td></tr><tr style="background-color: #ffffff;"><td style="width: 86.72%; vertical-align: bottom;"><div style="text-align: left; background-color: #ffffff; font-family: Times New Roman''; color: #000000; margin-left: 7.2pt; font-size: 10pt;">Warranty expense</div></td><td style="width: 1.67%; vertical-align: bottom;"><div style="text-align: left; background-color: #ffffff; font-family: Times New Roman; color: #000000; font-size: 10pt;">&#160;</div></td><td style="width: 1.67%; vertical-align: bottom;"><div style="text-align: left; background-color: #ffffff; font-family: Times New Roman; color: #000000; font-size: 10pt;">&#160;</div></td><td style="width: 8.94%; vertical-align: bottom;"><div style="text-align: right; background-color: #ffffff; font-family: Times New Roman''; color: #000000; font-size: 10pt;">353</div></td><td style="width: 1%; vertical-align: bottom;"><div style="text-align: left; background-color: #ffffff; font-family: Times New Roman; color: #000000; font-size: 10pt;">&#160;</div></td></tr><tr style="background-color: #cceeff;"><td style="width: 86.72%; vertical-align: bottom;"><div style="text-align: left; font-family: Times New Roman''; color: #000000; margin-left: 7.2pt; font-size: 10pt;">Warranty charges incurred</div></td><td style="width: 1.67%; vertical-align: bottom;"><div style="text-align: left; font-family: Times New Roman; color: #000000; font-size: 10pt;">&#160;</div></td><td style="border-bottom: #000000 2px solid; width: 1.67%; vertical-align: bottom;"><div style="text-align: left; font-family: Times New Roman; color: #000000; font-size: 10pt;">&#160;</div></td><td style="border-bottom: #000000 2px solid; width: 8.94%; vertical-align: bottom;"><div style="text-align: right; font-family: Times New Roman''; color: #000000; font-size: 10pt;">(393</div></td><td style="width: 1%; vertical-align: bottom;"><div style="text-align: left; font-family: Times New Roman''; color: #000000; font-size: 10pt;">)</div></td></tr><tr style="background-color: #ffffff;"><td style="width: 86.72%; vertical-align: bottom;"><div style="text-align: left; background-color: #ffffff; text-indent: -7.2pt; font-family: Times New Roman''; color: #000000; margin-left: 7.2pt; font-size: 10pt;">Balance at June 30, 2013</div></td><td style="width: 1.67%; vertical-align: bottom;"><div style="text-align: left; background-color: #ffffff; font-family: Times New Roman; color: #000000; font-size: 10pt;">&#160;</div></td><td style="border-bottom: #000000 4px double; width: 1.67%; vertical-align: bottom;"><div style="text-align: left; background-color: #ffffff; font-family: Times New Roman''; color: #000000; font-size: 10pt;">$</div></td><td style="border-bottom: #000000 4px double; width: 8.94%; vertical-align: bottom;"><div style="text-align: right; background-color: #ffffff; font-family: Times New Roman''; color: #000000; font-size: 10pt;">715</div></td><td style="width: 1%; vertical-align: bottom;"><div style="text-align: left; background-color: #ffffff; font-family: Times New Roman; color: #000000; font-size: 10pt;">&#160;</div></td></tr><tr style="background-color: #cceeff;"><td style="width: 86.72%; vertical-align: bottom;"><div style="text-align: left; text-indent: -7.2pt; font-family: Times New Roman''; color: #000000; margin-left: 7.2pt; font-size: 10pt;">Warranty liability included in accrued expenses</div></td><td style="width: 1.67%; vertical-align: bottom;"><div style="text-align: left; font-family: Times New Roman; color: #000000; font-size: 10pt;">&#160;</div></td><td style="width: 1.67%; vertical-align: bottom;"><div style="text-align: left; font-family: Times New Roman''; color: #000000; font-size: 10pt;">$</div></td><td style="width: 8.94%; vertical-align: bottom;"><div style="text-align: right; font-family: Times New Roman''; color: #000000; font-size: 10pt;">669</div></td><td style="width: 1%; vertical-align: bottom;"><div style="text-align: left; font-family: Times New Roman; color: #000000; font-size: 10pt;">&#160;</div></td></tr><tr style="background-color: #ffffff;"><td style="width: 86.72%; vertical-align: bottom;"><div style="text-align: left; background-color: #ffffff; text-indent: -7.2pt; font-family: Times New Roman''; color: #000000; margin-left: 7.2pt; font-size: 10pt;">Long-term warranty liability</div></td><td style="width: 1.67%; vertical-align: bottom;"><div style="text-align: left; background-color: #ffffff; font-family: Times New Roman; color: #000000; font-size: 10pt;">&#160;</div></td><td style="border-bottom: #000000 2px solid; width: 1.67%; vertical-align: bottom;"><div style="text-align: left; background-color: #ffffff; font-family: Times New Roman; color: #000000; font-size: 10pt;">&#160;</div></td><td style="border-bottom: #000000 2px solid; width: 8.94%; vertical-align: bottom;"><div style="text-align: right; background-color: #ffffff; font-family: Times New Roman''; color: #000000; font-size: 10pt;">46</div></td><td style="width: 1%; vertical-align: bottom;"><div style="text-align: left; background-color: #ffffff; font-family: Times New Roman; color: #000000; font-size: 10pt;">&#160;</div></td></tr><tr style="background-color: #cceeff;"><td style="width: 86.72%; vertical-align: bottom;"><div style="text-align: left; text-indent: -7.2pt; font-family: Times New Roman''; color: #000000; margin-left: 7.2pt; font-size: 10pt;">Balance at June 30, 2013</div></td><td style="width: 1.67%; vertical-align: bottom;"><div style="text-align: left; font-family: Times New Roman; color: #000000; font-size: 10pt;">&#160;</div></td><td style="border-bottom: #000000 4px double; width: 1.67%; vertical-align: bottom;"><div style="text-align: left; font-family: Times New Roman''; color: #000000; font-size: 10pt;">$</div></td><td style="border-bottom: #000000 4px double; width: 8.94%; vertical-align: bottom;"><div style="text-align: right; font-family: Times New Roman''; color: #000000; font-size: 10pt;">715</div></td><td style="width: 1%; vertical-align: bottom;"><div style="text-align: left; font-family: Times New Roman; color: #000000; font-size: 10pt;">&#160;</div></td></tr></table><div><br /></div><div style="text-align: left; text-indent: 27pt; font-family: Times New Roman''; color: #000000; font-size: 10pt; font-weight: bold;">Revenue Recognition</div><div><br /></div><div style="text-align: justify; text-indent: 27pt; font-family: Times New Roman''; color: #000000; font-size: 10pt;">In general, we recognize revenue when four criteria are met: (i) persuasive evidence that an arrangement exists; (ii) delivery has occurred or services have been rendered; (iii) the sales price is fixed or determinable; and (iv) collectability is reasonably assured. Revenue-generating transactions generally fall into one of the following categories of revenue recognition:</div><div><br /></div><table cellpadding="0" cellspacing="0" style="width: 100%; font-family: 'Times New Roman', Times, serif; font-size: 10pt;"><tr><td style="width: 7.46%; vertical-align: middle;"><div>&#160;</div></td><td style="width: 5%; vertical-align: top;"><div style="text-align: left; font-family: Times New Roman''; color: #000000; font-size: 10pt;">&#9679;</div></td><td style="width: 87.54%; vertical-align: top;"><div style="text-align: justify; font-family: Times New Roman''; color: #000000; font-size: 10pt;">We recognize product revenue at the time of shipment for substantially all products sold directly to customers and through distributors because title and risk of loss pass on delivery to the common carrier. Our customers and distributors do not have the right to return products. If title and risk of loss pass at some other point in time, we recognize such revenue for our customers when the product is delivered to the customer and title and risk of loss have passed. &#160;We may enter into bill-and-hold arrangements and when this occurs delivery may not be present, but other criteria are reviewed to determine the proper timing of revenue recognition.</div></td></tr></table><div><br /></div><table cellpadding="0" cellspacing="0" style="width: 100%; font-family: 'Times New Roman', Times, serif; font-size: 10pt;"><tr><td style="width: 7.46%; vertical-align: middle;"><div>&#160;</div></td><td style="width: 5%; vertical-align: top;"><div style="text-align: left; font-family: Times New Roman''; color: #000000; font-size: 10pt;">&#9679;</div></td><td style="width: 87.54%; vertical-align: top;"><div style="text-align: left; font-family: Times New Roman''; color: #000000; font-size: 10pt;">We recognize installation and service and maintenance revenue at the time the service is performed.</div></td></tr></table><div><br /></div><table cellpadding="0" cellspacing="0" style="width: 100%; font-family: 'Times New Roman', Times, serif; font-size: 10pt;"><tr><td style="width: 7.46%; vertical-align: middle;"><div>&#160;</div></td><td style="width: 5%; vertical-align: top;"><div style="text-align: left; font-family: Times New Roman''; color: #000000; font-size: 10pt;">&#9679;</div></td><td style="width: 87.54%; vertical-align: top;"><div style="text-align: justify; font-family: Times New Roman''; color: #000000; font-size: 10pt;">We recognize revenue associated with extended maintenance agreements ("EMAs") over the life of the contracts using the straight-line method, which approximates the expected timing in which applicable services are performed. Amounts collected in advance of revenue recognition are recorded as a current or long-term liability based on the time from the balance sheet date to the future date of revenue recognition.</div></td></tr></table><div><br /></div><table cellpadding="0" cellspacing="0" style="width: 100%; font-family: 'Times New Roman', Times, serif; font-size: 10pt;"><tr><td style="width: 7.46%; vertical-align: middle;"><div>&#160;</div></td><td style="width: 5%; vertical-align: top;"><div style="text-align: left; font-family: Times New Roman''; color: #000000; font-size: 10pt;">&#9679;</div></td><td style="width: 87.54%; vertical-align: top;"><div style="text-align: justify; font-family: Times New Roman''; color: #000000; font-size: 10pt;">We recognize revenue on certain rental programs over the life of the rental agreement using the straight-line method. Amounts collected in advance of revenue recognition are recorded as a current or long-term liability based on the time from the balance sheet date to the future date of revenue recognition.</div></td></tr></table><div><br /></div><table cellpadding="0" cellspacing="0" style="width: 100%; font-family: 'Times New Roman', Times, serif; font-size: 10pt;"><tr><td style="width: 7.46%; vertical-align: middle;"><div>&#160;</div></td><td style="width: 5%; vertical-align: top;"><div style="text-align: left; font-family: Times New Roman''; color: #000000; font-size: 10pt;">&#9679;</div></td><td style="width: 87.54%; vertical-align: top;"><div style="text-align: left; font-family: Times New Roman''; color: #000000; font-size: 10pt;">Shipping costs reimbursed by the customer are included in revenue.</div></td></tr></table><div><br /></div><div style="text-align: justify; text-indent: 27pt; font-family: Times New Roman''; color: #000000; font-size: 10pt;">Multiple element arrangements ("MEAs") are arrangements to sell products to customers that frequently include multiple deliverables. Our most significant MEAs include the sale of one or more of our CleanSource UPS or PowerHouse products, combined with one or more of the following products: design services, project management, commissioning and installation services, spare parts or consumables, and EMAs. Delivery of the various products or performance of services within the arrangement may or may not coincide. Certain services related to design and consulting may occur prior to delivery of product and commissioning and installation typically take place within six months of product delivery, depending upon customer requirements. EMAs, consumables, and repair, maintenance or consulting services generally are delivered over a period of one to five years. In certain arrangements, revenue recognized is limited to the amount invoiced or received that is not contingent on the delivery of future products and services.</div><div><br /></div><div style="text-align: justify; text-indent: 27pt; font-family: Times New Roman''; color: #000000; font-size: 10pt;">When arrangements include multiple elements, we allocate revenue to each element based on the relative selling price and recognize revenue when the elements have stand-alone value and the four criteria for revenue recognition have been met. We establish the selling price of each element based on Vendor Specific Objective Evidence ("VSOE") if available, Third Party Evidence ("TPE") if VSOE is not available, or Best Estimate of Selling Price ("BESP") if neither VSOE nor TPE is available. We generally determine selling price based on amounts charged separately for the delivered and undelivered elements to similar customers in stand-alone sales of the specific elements. When arrangements include an EMA, we recognize revenue related to the EMA at the stated contractual price on a straight-line basis over the life of the agreement.</div><div><br /></div><div style="text-align: justify; text-indent: 27pt; font-family: Times New Roman''; color: #000000; font-size: 10pt;">Any taxes imposed by governmental authorities on our revenue-producing transactions with customers are shown in our consolidated statements of operations on a net-basis; that is, excluded from our reported revenues.</div><div><br /></div></div> 682000 320000 102000 -347000 -311000 -199000 193000 144000 19261000 18036000 19094000 19296000 19193000 19491000 19476000 18036000 P1M 82000 52000 166000 164000 P18M 1 P12M 4 1 P36M P12M P6M P5Y 20000 0 10000 49000