This excerpt taken from the WMS 10-K filed Sep 9, 2005.
If we do not effectively operate our manufacturing processes and manage our inventory, and customers cancel orders or we have excess inventory, we may incur charges to earnings.
Our manufacturing process is impacted by our ability to: (1) procure raw materials from our suppliers on a timely basis; (2) effectively manage raw materials during the manufacturing process due to reliance on third party suppliers and contract manufacturers; (3) accurately configure orders for gaming machines to customers specifications; (4) maintain a balanced inventory; (5) efficiently utilize our manufacturing capacity; (6) manufacture a quality product with minimal defects and warranty issues; and (7) deliver gaming machines to our customers on time. If we are unable to fulfill customers orders timely or at the highest level of quality, and as a result, customers cancel orders, we may incur charges to earnings. If we have excess or obsolete inventory which we are unable to sell, we may incur charges to earnings. In fiscal 2005, we recorded $4.6 million of net inventory charges to reduce legacy inventory to net realizable value.