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Note 4 - Inventories

3 Months Ended

Aug. 31, 2013

4. INVENTORIES

Inventories are stated at the lower of cost (first-in, first-out basis) or market (net realizable value). In relation to the acquisition of LIFECODES on March 22, 2013, a fair value adjustment of $4.5 million increased inventory to net realizable value, which was greater than replacement cost. As of August 31, 2013, approximately $4.0 million of the fair value adjustment related to the LIFECODES acquisition has been expensed through cost of sales, of which, approximately $2.3 million was expensed in the first quarter of fiscal 2014. The remaining fair value adjustment is expected to be expensed through cost of sales by the end of the second quarter of fiscal 2014, at which time inventories will again be stated at the lower of cost (first-in, first-out basis) or market (net realizable value). Inventories as of August 31, 2013, and May 31, 2013 include the following (thousands of dollars):

	As of
	August 31, 2013		May 31, 2013

Raw materials and supplies	$	13,915		14,880
Work in process		9,871		8,356
Finished goods		22,184		22,705
	$	45,970		45,941

- Definition

The entire disclosure for inventory. This may include, but is not limited to, the basis of stating inventory, the method of determining inventory cost, the major classes of inventory, and the nature of the cost elements included in inventory. If inventory is stated above cost, accrued net losses on firm purchase commitments for inventory and losses resulting from valuing inventory at the lower-of-cost-or-market may also be included. For LIFO inventory, may disclose the amount and basis for determining the excess of replacement or current cost over stated LIFO value and the effects of a LIFO quantities liquidation that impacts net income.

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