Note 5 – Inventories

Inventories net of reserves are summarized as follows:

	March 31, 2014		December 31, 2013
Raw Materials	$	4,683	$	5,351
Work in process		3,309		2,815
Finished Goods		5,264		5,394
		13,256		13,560
Less current inventory		(8,688)		(8,975)
		4,568		4,585
Less reserve for slow moving and obsolete inventory		(2,549)		(2,470)
	$	2,019	$	2,115

Inventories are stated at the lower of cost, determined by the first-in, first-out (“FIFO”) method, or market.

The Company periodically analyzes anticipated product sales based on historical results, current backlog and marketing plans. Based on these analyses, the Company anticipates that certain products will not be sold during the next twelve months. Inventories that are not anticipated to be sold in the next twelve months, have been classified as non-current.

Approximately 60% of the non-current inventories were comprised of finished goods at both March 31, 2014 and December 31, 2013, respectively. The Company has established a program to use interchangeable parts in its various product offerings and to modify certain of its finished goods to better match customer demands. In addition, the Company has instituted additional marketing programs to dispose of the slower moving inventories.

The Company continually analyzes its slow-moving, excess and obsolete inventories. Based on historical and projected sales volumes and anticipated selling prices, the Company establishes reserves. Inventory that is in excess of current and projected use is reduced by an allowance to a level that approximates its estimate of future demand. Products that are determined to be obsolete are written down to net realizable value.