Inventories

9 Months Ended

Sep. 30, 2012

Inventories

Inventories

Note 4.  Inventories

The components of inventories are as follows:

	September 30,		December 31,
	2012		2011
	(in thousands)
Raw materials	$	87,938	$	85,829
Work in process	17,761		25,639
Finished goods (completed systems)	17,581		8,555
	$	123,280	$	120,023

When recorded, reserves reduce the carrying value of inventories to their net realizable value.  The Company establishes inventory reserves when conditions exist that indicate inventories may be in excess of anticipated demand or are obsolete based upon assumptions about future demand for the Company’s products or market conditions.  The Company regularly evaluates the ability to realize the value of inventories based on a combination of factors including: forecasted sales or usage, estimated product- end- of- life dates, estimated current and future market value and new product introductions.  Purchasing and usage alternatives are also explored to mitigate inventory exposure.  As of September 30, 2012 and December 31, 2011, inventories are stated net of inventory reserves of $20.2 million and $22.8 million, respectively.

During the three months ended September 30, 2012, the Company reduced inventory ($1.1 million) and recorded an expense to cost of revenues due to lower than normal production capacity.