Note 4. Inventories

The components of inventories are as follows:

The valuation allowance to write inventory down to its net realizable value at June 30, 2026 and  December 31, 2025 was $16.6 million and $16.7 million, respectively. 

In December 2023, a third-party warehouse in Tennessee used by the Company incurred significant tornado damage resulting in damage to the leaf tobacco. The leaf tobacco inventory is covered by the Company’s stock throughput insurance policy and the Company believes the inventory loss is probable of being fully recovered under the policy. As a result, the Company recorded a $15.2 million insurance recovery receivable which is included in Other current assets on the consolidated balance sheets.