Inventories, Net and Significant Supplier

Inventories, net were as follows:



(In thousands)	September 30, 2017			December 31, 2016
Raw materials	$	36,803		$	33,059
Components	18,556			15,046
Work in process	6,596			5,860
Finished goods	95,690			80,119
Reserve for excess and obsolete inventory	(3,125		)	(4,205		)
Inventories, net	$	154,520		$	129,879

Reserve for Excess and Obsolete Inventory

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



(In thousands)	Nine Months Ended September 30,
(In thousands)	2017			2016
Balance at beginning of period	$	4,205		$	3,045
Additions charged to costs and expenses ⁽¹⁾	1,960			2,120
Sell through ⁽²⁾	(950		)	(781		)
(Write-offs)/Foreign exchange effects	(2,090		)	(726		)
Balance at end of period	$	3,125		$	3,658


⁽¹⁾	The additions charged to costs and expenses do not include inventory directly written-off that was scrapped during production totaling $0.2 million and $0.3 million for the nine months ended September 30, 2017 and 2016, 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. Purchases from the following supplier totaled more than 10% of our total inventory purchases:



	Three Months Ended September 30,
	2017				2016
	$ (thousands)		% of Total Inventory Purchases		$ (thousands)		% of Total Inventory Purchases
Texas Instruments	$	13,115	12.4	%	$	12,353	13.0	%



	Nine Months Ended September 30,
	2017				2016
	$ (thousands)		% of Total Inventory Purchases		$ (thousands)		% of Total Inventory Purchases
Texas Instruments	$	33,693	11.3	%	$	32,294	11.9	%

Related Party Supplier

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



	Three Months Ended September 30,
	2017				2016
	$ (thousands)		% of Total Inventory Purchases		$ (thousands)		% of Total Inventory Purchases
Related party supplier	$	1,378	1.3	%	$	1,382	1.5	%



	Nine Months Ended September 30,
	2017				2016
	$ (thousands)		% of Total Inventory Purchases		$ (thousands)		% of Total Inventory Purchases
Related party supplier	$	3,962	1.3	%	$	4,971	1.8	%

Total accounts payable to this supplier were as follows:



	September 30, 2017				December 31, 2016
	$ (thousands)		% of Accounts Payable		$ (thousands)		% of Accounts Payable
Related party supplier	$	1,763	1.6	%	$	1,690	1.7	%

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