Inventories

3 Months Ended

Mar. 31, 2019

Inventory Disclosure [Abstract]

Inventories

5. INVENTORIES

Inventories valued at LIFO (last-in, first-out), consist of the following (in thousands):

	March 31, 2019			December 31, 2018
Finished goods	$	34,124		$	46,638
Raw materials		32,245			27,321
Total FIFO (first-in, first-out) inventories		66,369			73,959
Reserve to adjust inventories to LIFO value		(18,442	)		(18,442	)
Total LIFO inventories	$	47,927		$	55,517

The Company utilizes the LIFO method of accounting related to its wood-alternative decking and residential railing products, which generally provides for the matching of current costs with current revenues. However, under the LIFO method, reductions in annual inventory balances cause a portion of the Company’s cost of sales to be based on historical costs rather than current year costs (LIFO liquidation). Reductions in interim inventory balances expected to be replenished by year-end do not result in a LIFO liquidation. Accordingly, interim LIFO calculations are based, in part, on management’s estimates of expected year-end inventory levels and costs which may differ from actual results. Since inventory levels and costs are subject to factors beyond management’s control, interim results are subject to the final year-end LIFO inventory valuation. As of March 31, 2019, management estimates that interim inventory balances will be replenished by year-end and there were no LIFO inventory liquidations or related impact on cost of sales in the three months ended March 31, 2019 or 2018.

Inventories valued at lower of cost (FIFO method) and net realizable value were $2.2 million at March 31, 2019 and $2.3 million at December 31, 2018, consisting primarily of raw materials. The Company utilizes the FIFO method of accounting related to its railing and staging systems for the commercial and multi-family market.