INVENTORIES

9 Months Ended

Sep. 30, 2022

Inventories consist principally of raw materials, non-food finished goods and packaged meal replacements held in the Company’s warehouses and outsourced distribution centers. Inventories are stated at the lower of cost or net realizable value, utilizing the first-in, first-out method. The cost of finished goods includes the cost of raw materials, packaging supplies, direct and indirect labor and other indirect manufacturing costs. On a quarterly basis, management reviews inventories for unsalable or obsolete inventories.

The Company donated inventory with an aggregate cost of $1.1 million and $10.5 million to Ukrainian refugees and those in need in Ukraine, increasing selling, general and administrative (“SG&A”) expenses during the three and nine months ended

September 30, 2022. The donations were made to two 501(c)(3) organizations that are coordinating the distribution throughout refugee camps in Europe and in Ukraine.

Inventories consisted of the following (in thousands):


	September 30, 2022		December 31, 2021

Raw materials	$	11,989	$	15,196
Packaging	3,078		3,641
Non-food finished goods	10,455		15,991
Finished goods	122,227		152,687
Reserve for obsolete inventory	(2,470)		(7,472)
Total	$	145,279	$	180,043