Inventories

Inventories consist of the following at:



	October 31, 2016		July 31, 2016
Raw materials and components	$	55,306,000	54,723,000
Work-in-process and finished goods	36,176,000		32,829,000
Total inventories	91,482,000		87,552,000
Less reserve for excess and obsolete inventories	15,823,000		16,198,000
Inventories, net	$	75,659,000	71,354,000

As of October 31, 2016 and July 31, 2016, the amount of inventory directly related to long-term contracts (including contracts-in-progress) was $2,745,000 and $2,896,000, respectively.

As of October 31, 2016 and July 31, 2016, $1,975,000 and $1,428,000, respectively, of the inventory balance above related to contracts from third party commercial customers who outsource their manufacturing to us.