Company: IRDM
Filing Date: 2025-02-13
Form Type: 10-K
Source: 0001628280-25-005302
Chunk: 124

Company: Iridium Communications Inc.
Filing Date: 2025-02-13
Form: 10-K
Item: Item 8
Chunk 124
---
 of employees directly involved in bringing inventory to its existing condition, and freight. Inventories are valued using the average cost method and are carried at the lower of cost or net realizable value. The Company’s expense for excess and obsolete inventory was not material during the years ended December 31, 2024, 2023 or 2022.The Company has a manufacturing agreement with Benchmark Electronics Inc. (“Benchmark”) to manufacture most of its subscriber equipment. Pursuant to the agreement, the Company may be required to purchase excess materials at cost plus a contractual markup if the materials are not used in production within the periods specified in the agreement. Benchmark will then repurchase such materials from the Company at the same price paid by the Company, as required for the production of the subscriber equipment.The following table summarizes the Company’s inventory balance:December 31, 20242023 (In thousands)Finished goods$52,496 $48,698 Raw materials29,605 43,599 Inventory valuation reserve(818)(1,162)Total$81,283 $91,135 The Company’s raw materials balance includes $21.2 million and $32.2 million at December 31, 2024 and December 31, 2023, respectively, of inventory held on consignment at third-party manufacturers.Stock-Based CompensationThe Company accounts for stock-based compensation at estimated fair value. The fair value of stock options is determined at the grant date using the Black-Scholes-Merton option pricing model. The fair value of restricted stock units (“RSUs”) is equal to the closing price of the underlying common stock on the grant date. The fair value of an award that is ultimately expected to vest is recognized on a straight-line basis over the requisite service or performance period and is classified in the consolidated statements of operations and comprehensive income (loss) in a manner consistent with the classification of the recipient’s compensation. The expected vesting of the Company’s performance-based RSUs is based upon the probability that the Company achieves the defined performance goals. The level of achievement of performance goals, if any, is determined by the Compensation Committee. Stock-based awards to non-employee consultants are expensed at their grant-date fair value as services are provided according to the terms of their agreements and are classified in selling, general and administrative expenses in the accompanying consolidated statements of operations and comprehensive income (loss). The following table presents the classification of stock-based compensation by line item on the balance sheet and statement of operations:As of and For