Inventories, net

9 Months Ended

Sep. 30, 2016

Note 7. Inventories, net

The components of inventories are as follows:


	September 30,		December 31,
	2016		2015
	(in thousands)
Raw materials	$	77,498	$	72,070
Work in process		30,903		29,219
Finished goods (completed systems)		8,600		8,119
	$	117,001	$	109,408

The value of raw materials shown for December 31, 2015, reflects the correction of an immaterial error discussed in Note. 2.

When recorded, inventory reserves are intended to reduce the carrying value of inventories to their net realizable value. The Company establishes inventory reserves when conditions exist that indicate inventory may be in excess of anticipated demand or is obsolete based upon assumptions about future demand for the Company’s products or market conditions.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 the following: 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, 2016 and December 31, 2015, inventories are stated net of inventory reserves of $9.4 million and $10.5 million, respectively.