Inventories and major vendors

9 Months Ended

Jul. 31, 2013

Note 4 - Inventories and major vendors

Inventories, consisting of materials, labor and manufacturing overhead, are stated at the lower of cost or market. Cost has been determined using the weighted average cost method. Inventories consist of the following (in thousands):

	July 31, 2013		October 31, 2012

Raw materials and supplies	$	2,559	$	2,519
Work in process		131		3
Finished goods		4,740		4,630
Less inventory reserve		(120)		(168)

Totals	$	7,310	$	6,984

Purchases of inventory from three major vendors during the nine months ended July 31, 2013 represented 33%, 14% and 10% of total inventory purchases compared to two major vendors who represented 17% and 13% of total inventory purchases for the same period in 2012. The Company has arrangements with these vendors to purchase product based on purchase orders periodically issued by the Company.

- 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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