INVENTORIES

Inventories are stated at the lower of cost or market. Cost is determined on a first in, first out basis. Finished goods and work-in-process inventories include material, labor and overhead costs. Factory overhead costs are allocated to inventory manufactured in-house based upon labor hours.

Inventories consisted of the following:



(In thousands)	September 30, 2017			December 31, 2016
Raw materials	$	5,145		$	4,521
Finished goods	3,804			3,048
Gross inventories	8,949			7,569
Less: reserve for obsolescence	(1,614		)	(1,411		)
Net inventories	$	7,335		$	6,158