Inventories

Inventories consist of the following at July 31, 2016 and 2015:



	2016		2015
Raw materials and components	$	54,723,000	51,272,000
Work-in-process and finished goods	32,829,000		27,700,000
Total inventories	87,552,000		78,972,000
Less reserve for excess and obsolete inventories	16,198,000		16,904,000
Inventories, net	$	71,354,000	62,068,000

At July 31, 2016 and 2015, the amount of inventory directly related to long-term contracts (including contracts-in-progress) was $2,896,000 and $2,261,000, respectively.

At July 31, 2016 and 2015, $1,428,000 and $609,000, respectively, of the inventory balance above related to contracts from third party commercial customers who outsource their manufacturing to us.