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Inventories
12 Months Ended
Dec. 31, 2017
Inventory Disclosure [Abstract]  
Inventories

2.

Inventories

Inventories are valued at the lower of cost or estimated net realizable value, after provision for excess, obsolete or impaired items, which is reviewed and updated on a periodic basis by management. For inventory procured or produced, whether internally or through contract manufacturing arrangements, at our manufacturing facility in Italy, cost is determined on a weighted-average basis, which approximates the first-in, first-out (“FIFO”) method. For inventory procured or produced, whether internally or through contract manufacturing arrangements, at our manufacturing facility in Texas, standard costs, which approximates actual cost on the FIFO method, is used to value inventory. Standard costs are reviewed annually by management, or more often in the event circumstances indicate a change in cost has occurred.

Work-in-process, finished products, field inventory and consignment inventory include material, labor and production overhead costs. Field inventory represents immediately saleable finished products inventory that is in the possession of the Company’s independent sales representatives. Consignment inventory represents immediately saleable finished products located at third party customers, such as distributors and hospitals.

Deferred cost of sales result from transactions where the Company has shipped product or performed services for which all revenue recognition criteria have not yet been met. Once all revenue recognition criteria have been met, the revenue and associated cost of sales are recognized.

 

 

 

December 31,

 

(U.S. Dollars, in thousands)

 

2017

 

 

2016

 

Raw materials

 

$

6,067

 

 

$

7,978

 

Work-in-process

 

 

12,487

 

 

 

9,505

 

Finished products

 

 

11,244

 

 

 

15,985

 

Field inventory

 

 

40,262

 

 

 

22,021

 

Consignment inventory

 

 

8,935

 

 

 

4,428

 

Deferred cost of sales

 

 

2,335

 

 

 

3,429

 

Inventories

 

$

81,330

 

 

$

63,346

 

 

The Company adjusts the value of its inventory to the extent management determines that the cost cannot be recovered due to obsolescence or other factors. In order to make these determinations, management uses estimates of future demand and sales prices for each product to determine the appropriate inventory reserves and to make corresponding adjustments to the carrying value of these inventories to reflect the lower of cost or market value.