Inventories, net

12 Months Ended

Dec. 31, 2018

Note 7. Inventories, net

The components of inventories are as follows:


	December 31,
	2018		2017
	(in thousands)
Raw materials	$	91,875	$	82,313
Work in process		23,857		31,651
Finished goods (completed systems)		13,268		6,580
Inventories, net	$	129,000	$	120,544

When recorded, inventory reserves are intended to reduce the carrying value of inventories to their net realizable value. We establish inventory reserves when conditions exist that indicate inventory may be in excess of anticipated demand or is obsolete based upon assumptions about future demand for our products or market conditions. We regularly evaluate 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. In 2018, we recorded a net decrease of $0.3 million in inventory reserves. As of December 31, 2018 and 2017, inventories are stated net of inventory reserves of $13.9 million and $14.2 million respectively.

During each of the years ended 2018, 2017 and 2016, we recorded charges to cost of sales of $2.2 million, $8.1 million and $0.8 million to reflect the lower of cost or net realizable value.

We have inventory on consignment at customer locations as of December 31, 2018 and 2017, of $4.6 million and $3.6 million, respectively.