Note 6 – Inventories

Inventories net of reserves are summarized as follows:

	June 30, 2013		December 31, 2012
Raw Materials	$	5,371	$	6,493
Work in process		2,789		2,950
Finished Goods		6,623		6,659
		14,783		16,102
Less current inventory		(10,500)		(11,319)
		4,283		4,783
Less reserve for slow moving and obsolete inventory		(1,893)		(2,185)
	$	2,390	$	2,598

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 70% and 64% of the non-current inventories were comprised of finished goods at June 30, 2013 and December 31, 2012, 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.