Inventories

Inventories are stated at the lower of cost and net realizable value using the first-in first-out costing method. Inventories as of September 30, 2019 and December 31, 2018 include the costs of material, labor, and factory overhead. Components of inventories consist of the following:



	September 30, 2019		December 31, 2018
Raw materials	$	10,225	$	13,698
Work in process	3,740		2,489
Finished goods	11,352		6,755
	$	25,317	$	22,942

During the second quarter of 2019, the Company recorded an inventory reserve of $2.1 million relating to its TracPhone V-IP products as the Company decided to no longer promote sales of these products and instead to focus its efforts on migrating customers to its HTS network and products.