Inventories, Net and Significant Supplier(s)

3 Months Ended

Mar. 31, 2016

Inventories, Net and Significant Supplier(s)

Inventories, Net and Significant Supplier

Inventories, net were as follows:



(In thousands)	March 31, 2016			December 31, 2015
Raw materials	$	28,051		$	29,290
Components	13,694			12,228
Work in process	6,350			5,671
Finished goods	72,889			78,222
Reserve for excess and obsolete inventory	(3,292		)	(3,045		)
Inventories, net	$	117,692		$	122,366

Reserve for Excess and Obsolete Inventory

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



(In thousands)	Three Months Ended March 31,
(In thousands)	2016			2015
Balance at beginning of period	$	3,045		$	2,539
Additions charged to costs and expenses ⁽¹⁾	693			811
Sell through ⁽²⁾	(211		)	(406		)
Write-offs/Foreign exchange effects	(235		)	(407		)
Balance at end of period	$	3,292		$	2,537


⁽¹⁾	The additions charged to costs and expenses do not include inventory directly written-off that was scrapped during production totaling $63 thousand and $95 thousand for the three months ended March 31, 2016 and 2015, 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. Texas Instruments provided $8.5 million or 10.8%, of total inventory purchases during the three months ended March 31, 2016. Victory Chemical Co., Ltd. provided $8.2 million or 11.2%, of total inventory purchases during the three months ended March 31, 2015.

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 Strategic Operations owns 40% of this vendor. Inventory purchases from this supplier were as follows:



	Three Months Ended March 31,
	2016				2015
	$ (thousands)		% of Total Inventory Purchases		$ (thousands)		% of Total Inventory Purchases
Related party supplier	$	1,612	2.0	%	$	2,094	2.9	%

Total accounts payable to this supplier were as follows:



	March 31, 2016				December 31, 2015
	$ (thousands)		% of Accounts Payable		$ (thousands)		% of Accounts Payable
Related party supplier	$	1,638	2.1	%	$	2,361	2.5	%

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.