Note 4. Inventories 

Inventories consists primarily of ink components and is stated at the lower of cost (determined by the first-in, first-out method) or net realizable value. Cost includes material costs, labor, and overhead. Provisions are made for the estimated effect of obsolete and slow-moving inventories on the basis of historical experience, current usage patterns, future demand and marketability of products, inventory levels and turns, and known replacement costs.

The increase in inventory primarily reflects inventory acquired in the Polymeric Acquisition – see Note 8.