Inventories, net

12 Months Ended

Dec. 31, 2023

Inventories, net

Inventories, net

Note 6. Inventories, net

The components of inventories are as follows:

	December 31,		December 31,
	2023		2022
	(in thousands)
Raw materials	$	231,200	$	187,313
Work in process		45,373		35,069
Finished goods (completed systems)		29,909		20,024
Inventories, net	$	306,482	$	242,406

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We establish inventory reserves when conditions exist that indicate inventory may be in excess of anticipated demand or is obsolete based upon assumptions about future demand for our products or market conditions.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 our ability to realize the value of inventories based on a combination of factors including the following: forecasted sales and the size and utilization of our installed base, 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 2023, we recorded a decrease of $1.5 million in inventory reserves. At December 31, 2023 and 2022, inventories are stated net of inventory reserves of $5.2 million and $6.7 million, respectively.

During the years ended December 31, 2023, 2022 and 2021, we recorded charges to cost of sales of $5.2 million, $4.6 million and $3.8 million, respectively, to adjust inventories to their lower of cost or net realizable value.

We have inventory on consignment at customer locations at December 31, 2023 and 2022, of $6.5 million and $6.4 million, respectively.