Inventories



	Processed		Unprocessed		Total
September 30, 2013 (Unaudited)	(In thousands)
Coffee	$	15,580	$	13,292	$	28,872
Tea and culinary products	24,921		4,470		29,391
Coffee brewing equipment	5,672		4,747		10,419
	$	46,173	$	22,509	$	68,682


	Processed		Unprocessed		Total
June 30, 2013	(In thousands)
Coffee	$	12,553	$	12,796	$	25,349
Tea and culinary products	21,406		4,194		25,600
Coffee brewing equipment	5,144		4,774		9,918
	$	39,103	$	21,764	$	60,867

Inventories are valued at the lower of cost or market. The Company accounts for coffee, tea and culinary products on the last in, first out ("LIFO") basis and coffee brewing equipment manufactured on the first in, first out ("FIFO") basis. The Company regularly evaluates these inventories to determine whether market conditions are correctly reflected in the recorded carrying value. At the end of each quarter, the Company records the expected beneficial effect of the liquidation of LIFO inventory quantities, if any, and records the actual impact at fiscal year-end. An actual valuation of inventory under the LIFO method is made only at the end of each fiscal year based on the inventory levels and costs at that time. If inventory quantities decline at the end of the fiscal year compared to the beginning of the fiscal year, the reduction results in the liquidation of LIFO inventory quantities carried at the cost prevailing in prior years. This LIFO inventory liquidation may result in a decrease or increase in cost of goods sold depending on whether the cost prevailing in prior years was lower or higher, respectively, than the current year cost. Accordingly, interim LIFO calculations must necessarily be based on management's estimates of expected fiscal year-end inventory levels and costs. Because these estimates are subject to many forces beyond management's control, interim results are subject to the final fiscal year-end LIFO inventory valuation. The Company anticipates its inventory levels at June 30, 2014 will be same as of June 30, 2013 and, therefore, did not record an adjustment to cost of goods sold for the three months ended September 30, 2013. No adjustment to cost of goods sold was recorded for the three months ended September 30, 2012.

In the three months ended September 30, 2013 the Company recorded a reduction to inventory reserve for slow-moving and obsolete inventory in the amount of $0.2 million compared to an increase in inventory reserve for slow-moving and obsolete inventory in the amount of $0.3 million in the three months ended September 30, 2012.