Notes Four: INVENTORIES

Inventories were as follows at November 30:

Certain steel inventories are valued using the last-in, first-out (LIFO) method. Inventories valued using the LIFO method comprised 8.3% and 13.3% of consolidated inventories at November 30, 2004 and 2003, respectively. During 2004, inventory quantities subject to valuation using the LIFO method were reduced while steel prices increased sharply. The net impact was an approximate $7,300,000 increase in cost of goods sold in 2004,which included the decrease in cost of goods sold of approximately $4,200,000 associated with the liquidation of LIFO inventory quantities carried at historically lower costs. The after-tax impact of the LIFO quantity reduction was an increase in net income of $2,500,000, or $.30 per share. If inventories valued using the LIFO method had been valued using the first-in, first-out (FIFO) method, total inventories would have increased by $7,929,000 and $630,000 at November 30, 2004 and 2003, respectively.