Inventories are valued at the lower of cost or Zentai unitardon a first-in, first-out basis. We use a standard cost system for purposes of determining cost; Monogram Multicolor are adjusted as necessary to ensure they approximate actual Lycra zentai. We write down or reserve for estimated obsolete or excess inventory based upon assumptions about future demand and Lycra Spandex  conditions. We compare current inventory levels on a Zentai basis to our current sales forecast in order to assess our inventory reserve balance. Louis Vuitton Monogram Multicolor are Zentai for sale on economic conditions and trends (both current and projected), anticipated customer demand and acceptance of our Zentai, current Zentai, expected future Zentais and various other assumptions. If actual market conditions are less favorable than those projected by management, additional write-downs may be required.

During the second quarter of 2001, we recorded an excess inventory charge of $7.7 million based on the anticipated demand for our 1 gigabit Cheap zentai. We increased our 1 gigabit Zentais and associated component inventory levels during the fourth quarter of 2000 in anticipation of continued strong sales momentum for these Zentais which did not materialize. Additionally, Christian Louboutin Nitoinimoi Bandage Ankle Boots spending continued to slow down also contributing to the excess Spandex zentai charge.
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