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Note 2 - Inventories

3 Months Ended

Dec. 31, 2013

2. INVENTORIES

Inventories, net of reserves, consist of the following (in thousands):

	December 31, 2013		September 30, 2013
Raw materials	$	8,400	$	5,414
Work-in-process		12,685		13,135
Finished goods		45,983		49,430
Consigned inventory		3,649		3,227
Supplies and other		288		739
	$	71,005	$	71,945

Inventories are valued at the lower of cost or market and are removed from inventory under the first-in-first-out method (“FIFO”). Cost of inventory includes material, labor and overhead. The Company recorded inventory valuation reserves of $0.8 million as of both December 31, 2013 and September 30, 2013 to reduce the carrying value of inventories to net realizable value.

Consigned inventory represents contractually required finished goods inventory levels for certain key customers physically located at customer sites. If future demand or market conditions are less favorable than the Company’s projections, additional inventory write-downs may be required and would be reflected in cost of sales on the Company’s statement of operations in the period in which the determination is made.

- 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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