Inventories, Net and Significant Supplier(s)

6 Months Ended

Jun. 30, 2015

Inventories, Net and Significant Supplier(s)

Inventories, Net and Significant Supplier

Inventories, net were as follows:



(In thousands)	June 30, 2015			December 31, 2014
Raw materials	$	33,635		$	24,763
Components	14,098			16,170
Work in process	8,416			2,622
Finished goods	55,870			56,458
Reserve for excess and obsolete inventory	(2,898		)	(2,539		)
Inventories, net	$	109,121		$	97,474

Reserve for Excess and Obsolete Inventory

Changes in the reserve for excess and obsolete inventory were as follows:



(In thousands)	Six Months Ended June 30,
(In thousands)	2015			2014
Balance at beginning of period	$	2,539		$	2,714
Additions charged to costs and expenses ⁽¹⁾	1,527			1,369
Sell through ⁽²⁾	(526		)	(473		)
Write-offs/FX effects	(642		)	(1,520		)
Balance at end of period	$	2,898		$	2,090


⁽¹⁾	The additions charged to costs and expenses do not include inventory directly written-off that was scrapped during production totaling $0.1 million and $0.2 million for the six months ended June 30, 2015 and 2014, respectively. These amounts are production waste and are not included in management's reserve for excess and obsolete inventory.


⁽²⁾	These amounts represent the reduction in reserves associated with inventory items that were sold during the period.

Significant Supplier

We purchase integrated circuits, components and finished goods from multiple sources. We had purchases from the following significant supplier that totaled more than 10% of our total inventory purchases as follows:



	Three Months Ended June 30,
	2015						2014
	$ (thousands)			% of Total Inventory Purchases			$ (thousands)		% of Total Inventory Purchases
Maxim Integrated Products International Limited	$	—	⁽¹⁾	—	%	⁽¹⁾	$	9,148	11.9	%


⁽¹⁾	Purchases from this supplier did not total more than 10% of our total inventory purchases in this period.



	Six Months Ended June 30,
	2015						2014
	$ (thousands)			% of Total Inventory Purchases			$ (thousands)		% of Total Inventory Purchases
Maxim Integrated Products International Limited	$	—	⁽¹⁾	—	%	⁽¹⁾	$	17,202	12.4	%


⁽¹⁾	Purchases from this supplier did not total more than 10% of our total inventory purchases in this period.

Related Party Vendor

We purchase certain printed circuit board assemblies from a related party vendor. The vendor is considered a related party for financial reporting purposes because our Senior Vice President of Manufacturing owns 40% of this vendor. Inventory purchases from this vendor were as follows:



	Three Months Ended June 30,
	2015				2014
	$ (thousands)		% of Total Inventory Purchases		$ (thousands)		% of Total Inventory Purchases
Related party vendor	$	2,357	2.7	%	$	2,507	3.3	%



	Six Months Ended June 30,
	2015				2014
	$ (thousands)		% of Total Inventory Purchases		$ (thousands)		% of Total Inventory Purchases
Related party vendor	$	4,451	2.8	%	$	4,230	3.0	%

Total accounts payable to this vendor were as follows:



	June 30, 2015				December 31, 2014
	$ (thousands)		% of Accounts Payable		$ (thousands)		% of Accounts Payable
Related party vendor	$	2,596	3.3	%	$	2,378	3.4	%

Our payable terms and pricing with this vendor are consistent with the terms offered by other vendors in the ordinary course of business. The accounting policies that we apply to our transactions with our related party vendor are consistent with those applied in transactions with independent third parties. Corporate management routinely monitors purchases from our related party vendor to ensure these purchases remain consistent with our business objectives.