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Inventories

9 Months Ended

Jul. 31, 2020

Note 5. Inventories

Inventories (short and long-term) as of July 31, 2020 and October 31, 2019 consisted of the following:

	July 31,			October 31,
	2020			2019
Raw materials	$	23,845		$	25,466
Work-in-process ⁽¹⁾		36,675			31,228
Inventories		60,520			56,694
Inventories - short-term		(51,502	)		(54,515	)
Inventories - long-term ⁽²⁾	$	9,018		$	2,179

(1)

Work-in-process includes the standard components of inventory used to build the typical modules or module components that are intended to be used in future project asset construction or power plant orders or for use under the Company’s service agreements. Included in work-in-process as of July 31, 2020 and October 31, 2019 was $19.6 million and $23.5 million, respectively, of completed standard components and modules.

(2)

Long-term inventory includes modules that are contractually required to be segregated for use as replacement modules for specific project assets. Given that these project assets are long-term, the Company classifies the inventory as long-term regardless of the expected timing of such module replacements.

Raw materials consist mainly of various nickel powders and steels, various other components used in producing cell stacks and purchased components for balance of plant. Work-in-process inventory is comprised of material, labor, and overhead costs incurred to build fuel cell stacks and modules, which are subcomponents of a power plant.

The Company incurred costs associated with excess plant capacity and manufacturing variances of $2.6 million and $4.4 million for the three months ended July 31, 2020 and 2019, respectively, and $7.0 million and $11.0 million for the nine months ended July 31, 2020 and 2019, respectively, which were included within product cost of revenues on the consolidated statements of operations and comprehensive loss.