NOTE 7 – INVENTORIES

Inventories include the following at December 31:

	2015		2014
	(thousands of dollars)

Raw material	$	2,905	$	2,826
Work in process		56		49
Finished products		12,843		9,940

Total inventory	$	15,804	$	12,815

Inventory serves as collateral for our amended and restated loan agreement with a domestic bank (see Note 12).

The difference between the calculated value of inventory under the FIFO and LIFO bases generates either a recorded LIFO reserve (i.e., where FIFO value exceeds the LIFO value) or an unrecorded negative LIFO reserve (i.e., where the LIFO value exceeds the FIFO value). In the latter case, in order to ensure that inventory is reported at the lower of cost or market and in accordance with ASC 330-10, we do not increase the stated value of our inventory to the LIFO value.

At December 31, 2015 and 2014, the LIFO value of inventory exceeded FIFO; therefore, in accordance with the above policy, no LIFO reserve was recorded.

Inventory included products in transit valued at approximately $2.7 million and $3.5 million at December 31, 2015, and 2014, respectively.