NOTE B — INVENTORIES

Inventories consist of prime coil, non-standard coil and tubular materials. Prime coil inventory consists primarily of raw materials, non-standard coil inventory consists primarily of finished goods and tubular inventory consists of both raw materials and finished goods. Inventories are valued at the lower of cost or replacement market. Cost for prime coil inventory is determined under the last-in, first-out (“LIFO”) method. Cost for non-standard coil inventory is determined using the specific identification method. Cost for tubular inventory is determined using the weighted average method.

During the quarter ended June 30, 2011, LIFO inventories were reduced but are expected to be replaced by March 31, 2012. During the quarter ended June 30, 2010, LIFO inventories were reduced and were partially replaced by March 31, 2011. Deferred credits of $82,653 and $94,064 were recorded at June 30, 2011 and June 30, 2010, respectively, to reflect replacement cost in excess of LIFO cost.

A summary of inventory values by product group follows:


	June 30,		March 31,
	2011		2011
Prime Coil Inventory	$	6,855,072	$	7,239,465
Non-Standard Coil Inventory		1,072,322		1,722,224
Tubular Raw Material		3,796,469		6,086,291
Tubular Finished Goods		17,891,570		19,631,290

	$	29,615,433	$	34,679,270