3.	Inventories

Inventories are valued at the lower of cost or estimated net realizable value, after provision for excess or obsolete items. Cost is determined on a weighted-average basis, which approximates the first in, first out (“FIFO”) method. The valuation of work-in-process, finished products, field inventory and consignment inventory includes the cost of materials, labor and production. Field inventory represents immediately saleable finished products inventory that is in the possession of the Company’s direct sales representatives and independent distributors. Consignment inventory represents immediately saleable finished products located at third party customers, such as distributors and hospitals.

Inventories were as follows:


(US$ in thousands)	September 30, 2011			December 31, 2010
Raw materials	$	15,512		$	12,186
Work-in-process		6,907			5,855
Finished products		54,405			54,049
Field inventory		40,603			32,915
Consignment inventory		8,621			9,009

		126,048			114,014
Less reserve for obsolescence		(31,341	)		(29,425	)

	$	94,707		$	84,589