Inventories (Policies)

3 Months Ended

Apr. 30, 2019

Inventories are valued at the lower of cost (determined on a first-in, first-out basis) or net realizable value and includes material, labor and factory overhead. The Company maintains valuation allowances for estimated slow-moving and obsolete inventory to reflect the difference between the cost of inventory and the estimated net realizable value. Valuation allowances for slow-moving and obsolete inventory are determined through a physical inspection of the product in connection with a physical inventory, a review of slow-moving product and consideration of active marketing programs. The market for education furniture is traditionally driven by value, not style, and the Company has not typically incurred significant obsolescence expenses. If market conditions are less favorable than those anticipated by management, additional valuation allowances may be required. Due to reductions in sales volume in the past years, the Company’s manufacturing facilities are operating at reduced levels of capacity. The Company records the cost of excess capacity as a period expense, not as a component of capitalized inventory valuation.

The following table presents breakdown of the Company’s inventories as of April 30, 2019, January 31, 2019 and April 30, 2018 (in thousands):



	4/30/2019		1/31/2019		4/30/2018

Finished goods	$	26,546	$	15,908	$	26,655
WIP	24,009		18,820		22,796
Raw materials	12,956		12,561		13,047
Inventories	$	63,511	$	47,289	$	62,498

Management continually monitors production costs, material costs and inventory levels to determine that interim inventories are fairly stated.