(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:


		March 31,		December 31,
		2014		2013
Raw materials	$	80,888	$	71,631
Work-in-progress		17,683		16,168
Finished goods		31,073		26,259
Total inventories, net	$	129,644	$	114,058

Inventory valued using the FIFO method was $73,523 and $67,750 at March 31, 2014 and December 31, 2013, respectively. Inventory valued using the average cost method was $56,121 and $46,308 at March 31, 2014 and December 31, 2013, respectively.