Inventories, Net

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Inventories, net consist of the following:

September 30 (DOLLARS IN THOUSANDS)	2001	2000 (Restated)
Raw materials	$54,462	$65,984
Raw materials – vehicles	17,510	–
Work-in-process	22,148	18,155
Finished sub-assemblies	6,686	8,527
Finished goods	30,801	38,348
Finished goods – acceptance contracts	22,421	954
	154,028	131,968
Less inventory allowance	13,261	14,905
Inventories, net	$140,767	$117,063

Approximately $17.5 million of FPI’s fiscal year 2001 raw materials balance represents vehicles that have been purchased on behalf of the Immigration and Naturalization Service (INS) for retrofit services that are performed by FPI. As part of an interagency agreement, INS provides funding to FPI to procure these vehicles. Revenue is recognized by FPI at the time of shipment of retrofitted vehicles to INS.

Approximately $22.4 million of FPI’s fiscal year 2001 finished goods balance represents goods that have been shipped to customers or their agents, but for which revenue has not been recognized because of acceptance criteria within the customer contract. A majority of this amount consists of systems furniture installations in progress at September 30, 2001.