Inventories

9 Months Ended

Sep. 30, 2023

4.	Inventories

Inventories are stated at the lower of average cost or net realizable value and consist of the following:


	September 30,		December 31,
	2023		2022

	(In thousands)
Raw materials	$	33,325	$	19,116
Work-in-progress		9,512		9,499
Finished goods		—		1,388

	$	42,837	$	30,003

Finished goods inventory at December 31, 2022 is comprised of a refurbished system at a customer location where the sales transaction did not meet our revenue recognition criteria. In May 2023, the Company received notice of the cancellation of a $54.6 million order for eight 200 Lean HDD systems. The customer contract associated with the cancelled order requires the customer to pay the Company a prorated price based upon the percentage of work completed on the order. The Company has received customer advances in the amount of $19.1 million associated with the cancelled order, all of which will be utilized to settle this customer obligation. In the fourth quarter of 2023 and into the beginning of 2024, as part of the cancellation of the order for eight 200 Lean HDD systems, the customer is expected to take delivery of $12.7 million of inventory on hand at September 30, 2023 and $6.8 million of inventory on order plus reimburse us for any supplier cancellation charges.