(2) Inventories

Inventories are stated at the lower of cost (first-in, first-out) or net realizable value. Components of inventory cost include materials, labor and manufacturing overhead. Inventories consist of the following (in thousands):

	September 30, 2017		December 31, 2016
Raw materials	$	2,020	$	856
Work in process		3,099		3,806
Finished goods		778		959
Total	$	5,897	$	5,621

The inventory reserve balance at September 30, 2017 was $0.3 million. No reserve was required at December 31, 2016. During the three and nine months ended September 30, 2017, the Company recorded charges in the condensed consolidated statements of operations for excess and obsolete inventory of $0.3 million and $0.5 million, respectively. No charges were recorded for the three and nine months ended September 30, 2016.