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, 2018			December 31, 2017
Raw materials	$	5,032		$	5,163
Finished goods	1,998			1,024
Gross inventories	7,030			6,187
Less: reserve for obsolescence	(993		)	(1,913		)
Net inventories of continuing operations	6,037			4,274
Finished goods of discontinued operations	—			2,252
Net inventories of continuing and discontinued operations	$	6,037		$	6,526