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 and the six month period ended September 30, 2011, LIFO inventories were reduced and are expected to be replaced by March 31, 2012. A deferred credit of $30,981 was recorded at September 30, 2011 to reflect replacement cost in excess of LIFO cost.

A summary of inventory values by product group follows:


	September 30,		March 31,
	2011		2011
Prime Coil Inventory	$	6,908,189	$	7,239,465
Non-Standard Coil Inventory		2,312,598		1,722,224
Tubular Raw Material		2,510,575		6,086,291
Tubular Finished Goods		14,528,091		19,631,290

	$	26,259,453	$	34,679,270