Supplementary Balance Sheet Information

3 Months Ended

Mar. 31, 2022

The components of inventories are as follows (in thousands):


	March 31, 2022		December 31, 2021
Raw materials	$	7,167	$	5,870
Work-in-process	2,252		2,145
Finished goods	1,191		830
Total inventories	10,610		8,845
Less reserve for excess and obsolete inventories	(323)		(320)
Total inventories, net	$	10,287	$	8,525

Property and equipment consist of the following (in thousands):


	March 31, 2022		December 31, 2021
Land	$	805	$	805
Buildings and leasehold improvements	4,832		4,823
Machinery and equipment	24,940		24,881
Computer hardware and software	2,387		2,387
Gross property and equipment	32,964		32,896
Accumulated depreciation	(24,111)		(23,978)
Total property and equipment, net	$	8,853	$	8,918

As of March 31, 2022, the non-operating land and building, held for investments, had a carry value of $2.0 million and was included within property and equipment on the condensed Consolidated Balance Sheet.

Depreciation expense for the three months ended March 31, 2022 and 2021 was $0.5 million and $0.5 million, respectively.

In our Healthcare division, we generally provide a 12 month assurance warranty on our gamma cameras. We accrue the estimated cost of this warranty at the time revenue is recorded and charge warranty expense to product and product-related cost of revenues. Warranty reserves are established based on historical experience with failure rates and repair costs and the number of systems covered by warranty. Warranty reserves are depleted as gamma cameras are repaired. The costs consist principally of materials, personnel, overhead, and transportation. We review warranty reserves quarterly and, if necessary, make adjustments.

Within our Construction division, KBS provides a limited assurance warranty on its residential homes that covers substantial defects in materials or workmanship for a period of 12 months after delivery to the owner. EBGL provides a limited warranty on the sale of its wood foundation products that covers leaks resulting from defects in workmanship for a period of twenty-five years. Estimated warranty costs are accrued in the period that the related revenue is recognized.

The activities related to our warranty reserve for the quarter ended March 31, 2022 and year ended December 31, 2021 are as follows (in thousands):


	March 31, 2022		December 31, 2021
Balance at the beginning of year	$	569	$	214
Charges to cost of revenues	26		963
Applied to liability	(175)		(608)
Balance at the end of period	$	420	$	569