INVENTORIES

Inventories are stated at the lower of standard cost (which approximates actual cost determined using the first-in, first-out cost method) or net realizable value and consists of the following (in thousands):



	At December 31,
	2018			2017

Raw materials	$	4,041		$	3,316
Finished goods	8,229			6,598
Reserve for excess, obsolete, and slow moving inventories	(4,212		)	(4,196		)
Inventories, net	$	8,058		$	5,718

During 2018, we initiated an aggressive inventory procurement plan in order to meet increasing shipment lead times and expected demand for commercial sales. While we did not achieve this level of demand, we had already committed to inventory purchases. As a result, our gross inventory levels increased $2.4 million in 2018 as compared to 2017.

During 2017, we implemented a strategic sales initiative to sell certain excess inventory that had previously been written-down in conjunction with our excess inventory reserve analysis in prior years, as required by U.S. GAAP. This initiative resulted in a net reduction of our gross inventory levels and excess inventory reserves of $5.2 million and $1.4 million, respectively, in 2017 as compared to 2016.