Inventories

12 Months Ended

Dec. 31, 2023

Inventories are valued at the lower of cost or net realizable value. Cost is determined by the first-in, first-out (“FIFO”) method. We establish an allowance for excess and obsolete inventories based on product line changes, the feasibility of substituting parts and the need for supply and replacement parts.

The components of inventories and the related changes in the allowance for excess and obsolete inventories are as follows:


	December 31,
	2023		2022
	(in thousands)
Raw materials	$	211,259	$	194,159
Work in process	5,523		3,501
Finished goods	2,910		5,806
	219,692		203,466
Less: Allowance for excess and obsolete inventories	(6,160)		(4,527)
Total, net	$	213,532	$	198,939


	Years Ended December 31,
	2023		2022		2021
Allowance for excess and obsolete inventories:	(in thousands)
Balance, beginning of period	$	4,527	$	1,787	$	3,261
Provisions for excess and obsolete inventories	5,480		2,852		629
Inventories written off	(3,847)		(112)		(2,103)
Balance, end of period	$	6,160	$	4,527	$	1,787

We continuously evaluate our inventory parts and write off inventory when no alternative use can be found. During the third quarter of 2022, we made the decision to no longer produce our small packaged geothermal/water-source heat pump units consisting of the WH Series horizontal configuration and WV Series vertical configuration. As a result, we have increased our provision for excess and obsolete inventory and written off certain related components and parts that cannot be used in other products or sold through our parts business.