Inventory is stated at the lower of cost or market. The cost of inventory is determined by the first-in, first-out ("FIFO") method. The Company provides a reserve for obsolescence to recognize the effects of engineering change orders, age and use of inventory that affect the value of the inventory. When the related inventory is disposed of, the obsolescence reserve is reduced. A detailed review of the inventory is performed annually with quarterly updates for known changes that have occurred since the annual review. Inventory, net of reserves of $1.6 million at September 30, 2011 and June 30, 2011 respectively, is comprised of the following (in thousands):

	September 30,	June 30,
Inventory	2011	2011
Component parts	$2,783	$2,388
Work in process	347	257
Finished goods	4,434	4,128
Total	$7,564	$6,773