(2) Inventories

Inventories are valued at the lower of cost (using either the first-in, first-out ("FIFO") or average cost methods) or market. The Company evaluates and adjusts as necessary its excess and obsolescence reserve at a minimum on a quarterly basis. Excess inventories are quantities of items that exceed anticipated sales or usage for a reasonable period. The Company has guidelines for calculating provisions for excess inventories based on the number of months of inventories on hand compared to anticipated sales or usage. Management uses its judgment to forecast sales or usage and to determine what constitutes a reasonable period.

Inventory cost includes material, labor and overhead. Inventories consisted of the following:


		September 30,		December 31,
		2013		2012
Raw materials	$	76,806	$	64,340
Work-in-progress		16,355		13,621
Finished goods		25,815		18,071
Total inventories, net	$	118,976	$	96,032

Inventory valued using the FIFO method was $70,903 and $57,004 at September 30, 2013 and December 31, 2012, respectively. Inventory valued using the average cost method was $48,073 and $39,028 at September 30, 2013 and December 31, 2012, respectively.