Inventories are valued at the lower of cost (first-in, first-out) or market, which requires the Company to make
specific estimates, assumptions and judgments in determining the amount, if any, of reductions in the valuation of
inventories to their net realizable values. The net realizable values of the Company’s products are impacted by a
number of factors, including changes in the price of steel, competitive sales pricing, quantities of inventories on
hand, the age of the individual inventory items, market acceptance of the Company’s products, the Company’s
normal gross margins, actions by our competitors, the condition of our used and rental inventory and general
economic factors. Once an inventory item’s value has been deemed to be less than cost, a net realizable value
allowance is calculated and a new “cost basis” for that item is effectively established. This new cost is retained
for that item until such time as the item is disposed of or the Company determines that an additional write-down
is necessary. Additional write-downs may be required in the future based upon changes in assumptions due to