Inventories

9 Months Ended

Sep. 30, 2022

(6) Inventories

Components of inventories at September 30, 2022 and December 31, 2021 are summarized as follows:


(in thousands)	September 30, 2022		December 31, 2021
Raw materials	$	40,786	$	23,530
Work in process	6,650		5,173
Finished goods and parts	78,526		64,184
Inventories	$	125,962	$	92,887

We record a reserve on the carrying value of our inventory to reflect the rapid technological change in our industry that impacts the market for our products. The inventory reserve was $16,153 and $16,509 as of September 30, 2022 and December 31, 2021, respectively.

We transferred $1,063 and $1,610 of inventory to property and equipment during the nine months ended September 30, 2022 and 2021, respectively.

In the second quarter of 2022 we notified one of our contract manufacturers of our intent to terminate the manufacturing services arrangement and in-source the assembly and production process. The exit agreement was finalized in July 2022 and included a $1,670 exit fee accrued in the second quarter of 2022 and paid in third quarter of 2022, as well as the commitment to purchase $23,913 of inventory and $369 of fixed assets from the assembly manufacturer. Part of the inventory purchased was prepaid during previous quarters for $8,892, which resulted in a net payment of $17,060 in July 2022.