INVENTORIES

6 Months Ended

Sep. 30, 2011

INVENTORIES

INVENTORIES

2. INVENTORIES

Inventories are stated at the lower of cost (which approximates first-in, first-out) or market. Market is defined as sales price less cost to dispose and a normal profit margin.  Inventories consist of the following:

	September 30, 2011		March 31, 2011
	(in thousands)
Raw materials	$	506	$	336
Work in process	256		339
Finished goods(1)	2,237		2,787
Supplies	189		165
	$	3,188	$	3,627

(1)Net of reserve for obsolescence of $24,000 and $148,000 at September 30, 2011 and March 31, 2011, respectively.

The Company recognizes abnormal production costs, including fixed cost variances from normal production capacity, as an expense in the period incurred. Approximately $218,000 and $416,000 of abnormal production costs were charged to cost of sales for the three and six months ended September 30, 2011.  No abnormal production costs were charged to cost of sales for the three and six months ended September 30, 2010.