NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 2. Business Combinations 3. Inventories On December 31, 2001, the Company acquired the remaining 50% interest in its joint venture investment, Pavement Technology, Inc., for 10,000 shares of the Company’s stock valued at approximately $143,000. A summary of the net assets acquired is as follows: On October 2, 2000, the Company acquired the operating assets and liabilities of Carlson Paving Products Company, Inc. (“Carlson”) for $4,170,000 in cash and 144,162 shares of the Company’s stock valued at approximately $1,577,000. On September 30, 2000, the Company purchased substantially all of the assets and liabilities of Osborn MMD, a Boart Longyear group operation, from Anglo Operations Limited for approxi- mately $3,200,000 in cash. The acquired business is located in South Africa and operates as Osborn Engineered Products SA (Pty) Ltd. On July 1, 2002 the Company announced it had entered into a strategic alliance with Case Construction Equipment for the manufacture, marketing and sale of trenchers, horizontal directional drills (“HDD”) and related equipment for the utility constructions market. Under an original equipment manufacturer agreement “(OEM)”, the Company’s Underground Group will produce the current line of of eight Case trenchers, three HDD’s, HDD fluid-mixing systems and downhole tools, and will also dedicate selected models of Trencor trenchers and American Augers HDD’s to be distributed through the Case dealer networks. As part of the agreement, the Company will also have access to Case’s worldwide dealer networks and access to Case’s purchasing power for these product lines through its supply base. As part of the agreement, the Company acquired certain intel- lectual property, tooling and other product-specific manufacturing assets from Case. The Company’s subsidiary Trencor, Inc. will manufacture and sell Case trencher products beginning in early 2003, with the full Case product line integration and related manufacturing operations scheduled for completion by the end of 2003. The Company’s acquisitions have been accounted for using the purchase method of accounting, and according- ly, the operating results of the acquired businesses are included in the Company’s consolidated financial state- ments from the respective acquisition dates. The assets acquired and liabilities assumed were recorded at esti- mated fair value. That portion of the purchase price in excess of the fair market value of the net identifiable assets acquired is recorded as goodwill. Case Product Line Osborn Carlson  Current assets $725,393 $7,634,984 $2,229,110 Property, plant and equipment 350,000 1,843,815 715,884 Other assets 48,809 19,005 Current liabilities (4,667,809) (640,400)  Other liabilities (964,365) Goodwill and other intangibles 2,000,000 (1,194,292) 4,385,025 Less: Minority interest (439,861) Net assets acquired excluding cash  3,075,393 3,225,646 5,744,259 Cash  2,585 Net assets acquired  $3,075,393 $3,225,646 $5,746,844 Inventories consisted of the following: December 31,  2002 2001 Raw materials and parts $ 47,937,679 $ 42,745,772 Work-in-process 20,606,056 27,270,361 Finished goods 27,765,774 37,645,041 Used equipment 23,928,012 21,334,403 Total $120,237,521 $128,995,577