Inventories, Net and Significant Supplier(s)

9 Months Ended

Sep. 30, 2015

Inventories, Net and Significant Supplier(s)

Inventories, Net and Significant Supplier

Inventories, net were as follows:



(In thousands)	September 30, 2015			December 31, 2014
Raw materials	$	29,472		$	24,763
Components	14,483			16,170
Work in process	4,667			2,622
Finished goods	66,952			56,458
Reserve for excess and obsolete inventory	(2,576		)	(2,539		)
Inventories, net	$	112,998		$	97,474

Reserve for Excess and Obsolete Inventory

Changes in the reserve for excess and obsolete inventory were as follows:



(In thousands)	Nine Months Ended September 30,
(In thousands)	2015			2014
Balance at beginning of period	$	2,539		$	2,714
Additions charged to costs and expenses ⁽¹⁾	2,012			2,141
Sell through ⁽²⁾	(774		)	(728		)
Write-offs/FX effects	(1,201		)	(1,862		)
Balance at end of period	$	2,576		$	2,265


⁽¹⁾	The additions charged to costs and expenses do not include inventory directly written-off that was scrapped during production totaling $0.2 million and $0.2 million for the nine months ended September 30, 2015 and 2014, respectively. These amounts are production waste and are not included in management's reserve for excess and obsolete inventory.


⁽²⁾	These amounts represent the reduction in reserves associated with inventory items that were sold during the period.

Significant Supplier

We purchase integrated circuits, components and finished goods from multiple sources. Maxim Integrated Products International Limited provided $24.3 million, or 11.1%, of total inventory purchases during the nine months ended September 30, 2014.

Related Party Supplier

We purchase certain printed circuit board assemblies from a related party supplier. The supplier is considered a related party for financial reporting purposes because our Senior Vice President of Manufacturing owns 40% of this vendor. Inventory purchases from this supplier were as follows:



	Three Months Ended September 30,
	2015				2014
	$ (thousands)		% of Total Inventory Purchases		$ (thousands)		% of Total Inventory Purchases
Related party supplier	$	2,115	2.3	%	$	2,372	3.0	%



	Nine Months Ended September 30,
	2015				2014
	$ (thousands)		% of Total Inventory Purchases		$ (thousands)		% of Total Inventory Purchases
Related party supplier	$	6,566	2.6	%	$	6,602	3.0	%

Total accounts payable to this supplier were as follows:



	September 30, 2015				December 31, 2014
	$ (thousands)		% of Accounts Payable		$ (thousands)		% of Accounts Payable
Related party supplier	$	2,142	2.4	%	$	2,378	3.4	%

Our payable terms and pricing with this supplier are consistent with the terms offered by other suppliers in the ordinary course of business. The accounting policies that we apply to our transactions with our related party supplier are consistent with those applied in transactions with independent third parties. Corporate management routinely monitors purchases from our related party supplier to ensure these purchases remain consistent with our business objectives.