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Error Correction | 12 Months Ended
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Dec. 31, 2019
Accounting Changes and Error Corrections [Abstract] |
Error Correction | Error Correction We have corrected herein our consolidated financial statements at December 31, 2018 and for the years ended December 31, 2018 and December 31, 2017, in accordance with Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) Topic 250, Accounting Changes and Error Corrections. The unaudited interim financial information for the quarterly periods ended September 30, 2019, June 30, 2019, March 31, 2019, December 31, 2018, September 30, 2018, June 30, 2018 and March 31, 2018, has also been corrected and is included in Note 25, Quarterly Results (Unaudited). The 2019 quarterly corrections will be reflected in the filing of our future 2020 unaudited interim consolidated financial statement filings in Quarterly Reports on Form 10-Q. Error Correction Background The Company noted errors in previously issued financial statements relating to share-based compensation expense for stock options and restricted stock awards held by retirement eligible employees and directors. As defined by our Long-Term Incentive Plans (Note 16), stock options and restricted stock awards are fully vested when an active employee or director meets certain retirement eligibility requirements. We corrected the financial statements to recognize all share-based compensation, related to retirement eligible employees or directors, by the earlier of the grant date (if retirement eligible on grant date) or ratably from grant date to retirement eligible date. The corrected financial statements also include corrections for the tax effect of the share-based compensation corrections as well as the corrections' impact on our prior periods' employees profit sharing bonus plan (Note 17). We do not believe that the errors are quantitatively material to any period presented in our prior financial statements. However, due to the qualitative nature of the matters identified in our review, including the number of years over which the errors occurred, we determined that it would be appropriate to correct the errors in our previously issued consolidated financial statements. Accordingly, we have corrected our consolidated financial statements and the impacted amounts within the accompanying footnotes thereto. Description of Tables The following tables represent our corrected consolidated statements of income, statements of stockholders' equity, and statements of cash flows for the years ended December 31, 2018 and December 31, 2017, as well as our corrected consolidated balance sheet at December 31, 2018. The values as previously reported for years ended 2018 and 2017 were derived from our Annual Report on Form 10-K for the year ended December 31, 2018 filed on February 28, 2019.
| Consolidated Statements of Income |  |  |  |  |  |  |  |  |  |
| Year Ended December 31, 2018 |  |  |  |  |  | Year Ended December 31, 2017 |  |  |  |
| Previously Reported |  | Corrections |  | As Corrected |  | Previously Reported |  | Corrections |  | As Corrected
| (in thousands, except per share data) |  |  |  |  |  |  |  |  |  |
Net sales | $ | 433,947 |  |  | $ | — |  |  |  | $ | 433,947 |  |  |  | $ | 405,232 |  |  | $ | — |  |  |  | $ | 405,232 |
Cost of sales | 330,414 |  |  | — |  | (a) |  | 330,414 |  |  |  | 281,835 |  |  | (254) |  | (a) |  | 281,581 |
Gross profit | 103,533 |  |  | — |  |  |  | 103,533 |  |  |  | 123,397 |  |  | 254 |  |  |  | 123,651 |
Selling, general and administrative expenses | 47,755 |  |  | 439 |  | (b) |  | 48,194 |  |  |  | 49,249 |  |  | 122 |  | (b) |  | 49,371 |
(Gain) loss on disposal of assets | (12) |  |  | — |  |  |  | (12) |  |  |  | 45 |  |  | — |  |  |  | 45 |
Income from operations | 55,790 |  |  | (439) |  |  |  | 55,351 |  |  |  | 74,103 |  |  | 132 |  |  |  | 74,235 |
Interest income, net | 196 |  |  | — |  |  |  | 196 |  |  |  | 298 |  |  | — |  |  |  | 298 |
Other (expense) income, net | (47) |  |  | — |  |  |  | (47) |  |  |  | 91 |  |  | — |  |  |  | 91 |
Income before taxes | 55,939 |  |  | (439) |  |  |  | 55,500 |  |  |  | 74,492 |  |  | 132 |  |  |  | 74,624 |
Income tax provision | 13,367 |  |  | (196) |  | (c) |  | 13,171 |  |  |  | 19,994 |  |  | 800 |  | (c) |  | 20,794 |
Net income | $ | 42,572 |  |  | $ | (243) |  |  |  | $ | 42,329 |  |  |  | $ | 54,498 |  |  | $ | (668) |  |  |  | $ | 53,830 |
Earnings per share: |  |  |  |  |  |  |  |  |  |  |
Basic | $ | 0.81 |  |  | $ | — |  |  |  | $ | 0.81 |  |  |  | $ | 1.04 |  |  | $ | (0.02) |  |  |  | $ | 1.02 |
Diluted | $ | 0.81 |  |  | $ | (0.01) |  |  |  | $ | 0.80 |  |  |  | $ | 1.03 |  |  | $ | (0.02) |  |  |  | $ | 1.01 |
Cash dividends declared per common share: | $ | 0.32 |  |  | $ | — |  |  |  | $ | 0.32 |  |  |  | $ | 0.26 |  |  | $ | — |  |  |  | $ | 0.26 |
Weighted average shares outstanding: |  |  |  |  |  |  |  |  |  |  |
Basic | 52,284,616 |  |  | — |  |  |  | 52,284,616 |  |  |  | 52,572,496 |  |  | — |  |  |  | 52,572,496 |
Diluted | 52,667,939 |  |  | — |  |  |  | 52,667,939 |  |  |  | 53,078,734 |  |  | — |  |  |  | 53,078,734 |
(a) The share-based compensation correction to cost of sales for the year ended December 31, 2017 was approximately$0.3 million. There was no correction required for the year ended December 31, 2018 for cost of sales. (b) The share-based compensation correction to selling, general and administrative expenses for the years ended December 31, 2018 and 2017 was approximately $0.5 million and $0.1 million, respectively. Included in the correction to selling, general and administrative expenses is a correction to our employee profit sharing bonus plan (Note 17) of approximately $0.1 million and $0.1 million for the years ended December 31, 2018 and 2017, respectively. (c) The correction to income taxes is the tax affect of the share-based compensation correction discussed above.
|  | Consolidated Balance Sheets |  |  |  |
|  | December 31, 2018 |  |  |  |
|  | Previously Reported |  | Corrections |  | As Corrected
Assets |  | (in thousands, except share and per share data) |  |  |  |
Current assets: |  |  |  |  |  |
Cash and cash equivalents |  | $ | 1,994 |  |  | $ | — |  |  | $ | 1,994 |
Accounts receivable, net |  | 54,078 |  |  | — |  |  | 54,078 |
Income tax receivable |  | 6,104 |  |  | (203) |  | (a) | 5,901 |
Note receivable |  | 27 |  |  | — |  |  | 27 |
Inventories, net |  | 77,612 |  |  | — |  |  | 77,612 |
Prepaid expenses and other |  | 1,046 |  |  | — |  |  | 1,046 |
Total current assets |  | 140,861 |  |  | (203) |  |  | 140,658 |
Property, plant and equipment: |  |  |  |  |  |
Land |  | 3,114 |  |  | — |  |  | 3,114 |
Buildings |  | 97,393 |  |  | — |  |  | 97,393 |
Machinery and equipment |  | 212,779 |  |  | — |  |  | 212,779 |
Furniture and fixtures |  | 16,597 |  |  | — |  |  | 16,597 |
Total property, plant and equipment |  | 329,883 |  |  | — |  |  | 329,883 |
Less: Accumulated depreciation |  | 166,880 |  |  | — |  |  | 166,880 |
Property, plant and equipment, net |  | 163,003 |  |  | — |  |  | 163,003 |
Intangible assets, net |  | 506 |  |  | — |  |  | 506 |
Goodwill |  | 3,229 |  |  | — |  |  | 3,229 |
Note receivable, long-term |  | 598 |  |  | — |  |  | 598 |
Total assets |  | $ | 308,197 |  |  | $ | (203) |  |  | $ | 307,994 |
Liabilities and Stockholders’ Equity |  |  |  |  |  |
Current liabilities: |  |  |  |  |  |
Revolving credit facility |  | $ | — |  |  | $ | — |  |  | $ | — |
Accounts payable |  | 10,616 |  |  | — |  |  | 10,616 |
Accrued liabilities |  | 37,455 |  |  | (580) |  | (b) | 36,875 |
Total current liabilities |  | 48,071 |  |  | (580) |  |  | 47,491 |
Deferred tax liabilities |  | 10,826 |  |  | (1,567) |  | (a) | 9,259 |
Other long-term liabilities |  | 1,801 |  |  | — |  |  | 1,801 |
Commitments and contingencies |  |  |  |  |  |  |
Stockholders’ equity: |  |  |  |  |  |
Preferred stock, $.001 par value, 5,000,000 shares authorized, no shares issued |  | — |  |  | — |  |  | — |
Common stock, $.004 par value, 100,000,000 shares authorized, 51,991,242 and 52,422,801 issued and outstanding at December 31, 2018 and 2017, respectively |  | 208 |  |  | — |  |  | 208 |
Additional paid-in capital |  | — |  |  | — |  |  | — |
Retained earnings |  | 247,291 |  |  | 1,944 |  | (c) | 249,235 |
Total stockholders’ equity |  | 247,499 |  |  | 1,944 |  |  | 249,443 |
Total liabilities and stockholders’ equity |  | $ | 308,197 |  |  | $ | (203) |  |  | $ | 307,994 |
(a) The correction to income tax receivable and deferred tax liability are the tax effect of the share-based compensation corrections. (b) This is the cumulative reduction of our employee profit sharing bonus plan (Note 17) liability as a result of the share-based compensation correction. The prior period costs will be recovered through our estimated 2019 fourth quarter payment which will be paid in early 2020. (c) See descriptions of the stockholders' equity in the consolidated statements of stockholders' equity for the year ended December 31, 2018 in sections below.
|  | Consolidated Statements of Stockholders’ Equity |  |  |  |  |  |  |  |
|  | Common Stock |  |  |  | Paid-in |  | Retained |  |
|  | Shares |  | Amount |  | Capital |  | Earnings |  | Total
As Previously Reported |  | (in thousands) |  |  |  |  |  |  |  |
| Balance at December 31, 2017 | 52,422 |  |  | $ | 210 |  |  | $ | — |  |  | $ | 237,016 |  |  | $ | 237,226 |
| Net income | — |  |  | — |  |  | — |  |  | 42,572 |  |  | 42,572 |
| Stock options exercised and restricted | 353 |  |  | 1 |  |  | 4,986 |  |  | — |  |  | 4,987 |
| stock awards granted |  |  |  |  |  |  |  |  |  |
| Share-based compensation | — |  |  | — |  |  | 7,374 |  |  | — |  |  | 7,374 |
| Stock repurchased and retired | (784) |  |  | (3) |  |  | (12,360) |  |  | (15,580) |  |  | (27,943) |
| Dividends | — |  |  | — |  |  | — |  |  | (16,717) |  |  | (16,717) |
| Balance at December 31, 2018 | 51,991 |  |  | 208 |  |  | — |  |  | 247,291 |  |  | 247,499 |
Correction Impacts |  |  |  |  |  |  |  |  |  |
| Balance at December 31, 2017 | — |  |  | — |  |  | — |  |  | 1,699 |  |  | 1,699 |
| Net income | — |  |  | — |  |  | — |  |  | (243) |  |  | (243) |
| Stock options exercised and restricted | — |  |  | — |  |  | — |  |  | — |  |  | — |
| stock awards granted |  |  |  |  |  |  |  |  |  |  |  |  |  |
| Share-based compensation | — |  |  | — |  |  | 488 |  |  | — |  |  | 488 |
| Stock repurchased and retired | — |  |  | — |  |  | (488) |  |  | 488 |  |  | — |
| Dividends | — |  |  | — |  |  | — |  |  | — |  |  | — |
| Balance at December 31, 2018 | — |  |  | — |  |  | — |  |  | 1,944 |  |  | 1,944 |
As Corrected |  |  |  |  |  |  |  |  |  |  | — |
| Balance at December 31, 2017 | 52,422 |  |  | 210 |  |  | — |  |  | 238,715 |  |  | 238,925 |
| Net income | — |  |  | — |  |  | — |  |  | 42,329 |  |  | 42,329 |
| Stock options exercised and restricted | 353 |  |  | 1 |  |  | 4,986 |  |  | — |  |  | 4,987 |
| stock awards granted |  |  |  |  |  |  |  |  |  |  |  |  |  |
| Share-based compensation | — |  |  | — |  |  | 7,862 |  |  | — |  |  | 7,862 |
| Stock repurchased and retired | (784) |  |  | (3) |  |  | (12,848) |  |  | (15,092) |  |  | (27,943) |
| Dividends | — |  |  | — |  |  | — |  |  | (16,717) |  |  | (16,717) |
| Balance at December 31, 2018 | 51,991 |  |  | $ | 208 |  |  | $ | — |  |  | $ | 249,235 |  |  | $ | 249,443 |
See descriptions of net income in the consolidated statement of income for the year ended December 31, 2018 in the section above.
|  | Consolidated Statements of Stockholders’ Equity |  |  |  |  |  |  |  |
|  | Common Stock |  |  |  | Paid-in |  | Retained |  |
|  | Shares |  | Amount |  | Capital |  | Earnings |  | Total
As Previously Reported |  | (in thousands) |  |  |  |  |  |  |  |
| Balance at December 31, 2016 | 52,651 |  |  | $ | 211 |  |  | $ | — |  |  | $ | 205,687 |  |  | $ | 205,898 |
| Net income | — |  |  | — |  |  | — |  |  | 54,498 |  |  | 54,498 |
| Stock options exercised and restricted | 293 |  |  | 1 |  |  | 2,258 |  |  | — |  |  | 2,259 |
| stock awards granted |  |  |  |  |  |  |  |  |  |
| Share-based compensation | — |  |  | — |  |  | 6,458 |  |  | — |  |  | 6,458 |
| Stock repurchased and retired | (522) |  |  | (2) |  |  | (8,716) |  |  | (9,516) |  |  | (18,234) |
| Dividends | — |  |  | — |  |  | — |  |  | (13,653) |  |  | (13,653) |
| Balance at December 31, 2017 | 52,422 |  |  | 210 |  |  | — |  |  | 237,016 |  |  | 237,226 |
Correction Impacts |  |  |  |  |  |  |  |  |  |  |  |  |  |
| Balance at December 31, 2016 | — |  |  | — |  |  | — |  |  | 2,512 |  |  | 2,512 |
| Net income | — |  |  | — |  |  | — |  |  | (668) |  |  | (668) |
| Stock options exercised and restricted | — |  |  | — |  |  | — |  |  | — |  |  | — |
| stock awards granted |  |  |  |  |  |  |  |  |  |  |  |  |  |
| Share-based compensation | — |  |  | — |  |  | (145) |  |  | — |  |  | (145) |
| Stock repurchased and retired | — |  |  | — |  |  | 145 |  |  | (145) |  |  | — |
| Dividends | — |  |  | — |  |  | — |  |  | — |  |  | — |
| Balance at December 31, 2017 | — |  |  | — |  |  | — |  |  | 1,699 |  |  | 1,699 |
As Corrected |  |  |  |  |  |  |  |  |  |  |  |  |  |
| Balance at December 31, 2016 | 52,651 |  |  | 211 |  |  | — |  |  | 208,199 |  |  | 208,410 |
| Net income | — |  |  | — |  |  | — |  |  | 53,830 |  |  | 53,830 |
| Stock options exercised and restricted | 293 |  |  | 1 |  |  | 2,258 |  |  | — |  |  | 2,259 |
| stock awards granted |  |  |  |  |  |  |  |  |  |  |  |  |  |
| Share-based compensation | — |  |  | — |  |  | 6,313 |  |  | — |  |  | 6,313 |
| Stock repurchased and retired | (522) |  |  | (2) |  |  | (8,571) |  |  | (9,661) |  |  | (18,234) |
| Dividends | — |  |  | — |  |  | — |  |  | (13,653) |  |  | (13,653) |
| Balance at December 31, 2017 | 52,422 |  |  | $ | 210 |  |  | $ | — |  |  | $ | 238,715 |  |  | $ | 238,925 |
See descriptions of net income in the consolidated statement of income for the year ended December 31, 2017 in the section above.
| Consolidated Statements of Cash Flows |  |  |  |  |  |  |  |  |  |
| Year Ended December 31, 2018 |  |  |  |  |  | Year Ended December 31, 2017 |  |  |  |
| Previously Reported |  | Corrections |  | As Corrected |  | Previously Reported |  | Corrections |  | As Corrected
Operating Activities | (in thousands) |  |  |  |  |  |  |  |  |  |
Net income | $ | 42,572 |  |  | $ | (243) |  |  | $ | 42,329 |  |  | $ | 54,498 |  |  | $ | (668) |  |  | $ | 53,830 |
Adjustments to reconcile net income to net cash provided by operating activities: |  |  |  |  |  |  |  |  |  |  |
Depreciation and amortization | 17,655 |  |  | — |  |  | 17,655 |  |  | 15,007 |  |  | — |  |  | 15,007 |
Amortization of bond premiums | 13 |  |  | — |  |  | 13 |  |  | 47 |  |  | — |  |  | 47 |
Provision for losses on accounts receivable, net of adjustments | 174 |  |  | — |  |  | 174 |  |  | 179 |  |  | — |  |  | 179 |
Provision for excess and obsolete inventories | 152 |  |  | — |  |  | 152 |  |  | 264 |  |  | — |  |  | 264 |
Share-based compensation | 7,374 |  |  | 488 |  |  | 7,862 |  |  | 6,458 |  |  | (145) |  |  | 6,313 |
(Gain) loss on disposition of assets | (12) |  |  | — |  |  | (12) |  |  | 45 |  |  | — |  |  | 45 |
Foreign currency transaction loss (gain) | 55 |  |  | — |  |  | 55 |  |  | (59) |  |  | — |  |  | (59) |
Interest income on note receivable | (27) |  |  | — |  |  | (27) |  |  | (25) |  |  | — |  |  | (25) |
Deferred income taxes | 2,849 |  |  | (208) |  |  | 2,641 |  |  | (1,554) |  |  | 805 |  |  | (749) |
Changes in assets and liabilities: |  |  |  |  |  |  |  |  |  |  |
Accounts receivable | (2,832) |  |  | — |  |  | (2,832) |  |  | (7,516) |  |  | — |  |  | (7,516) |
Income tax receivable | (4,461) |  |  | 13 |  |  | (4,448) |  |  | 4,596 |  |  | (5) |  |  | 4,591 |
Inventories | (5,598) |  |  | — |  |  | (5,598) |  |  | (23,698) |  |  | — |  |  | (23,698) |
Prepaid expenses and other | (528) |  |  | — |  |  | (528) |  |  | 98 |  |  | — |  |  | 98 |
Accounts payable | (1,176) |  |  | — |  |  | (1,176) |  |  | 3,043 |  |  | — |  |  | 3,043 |
Deferred revenue | 412 |  |  | — |  |  | 412 |  |  | 258 |  |  | — |  |  | 258 |
Accrued liabilities and donations | (1,766) |  |  | (50) |  |  | (1,816) |  |  | 6,353 |  |  | 13 |  |  | 6,366 |
Net cash provided by operating activities | 54,856 |  |  | — |  |  | 54,856 |  |  | 57,994 |  |  | — |  |  | 57,994 |
Investing Activities |  |  |  |  |  |  |  |  |  |  |
Capital expenditures | (37,268) |  |  | — |  |  | (37,268) |  |  | (41,713) |  |  | — |  |  | (41,713) |
Cash paid in business combination | (6,377) |  |  | — |  |  | (6,377) |  |  | — |  |  | — |  |  | — |
Proceeds from sale of property, plant and equipment | 13 |  |  | — |  |  | 13 |  |  | 10 |  |  | — |  |  | 10 |
Investment in certificates of deposits | (7,200) |  |  | — |  |  | (7,200) |  |  | (5,280) |  |  | — |  |  | (5,280) |
Maturities of certificates of deposits | 10,080 |  |  | — |  |  | 10,080 |  |  | 7,912 |  |  | — |  |  | 7,912 |
Purchases of investments held to maturity | (9,001) |  |  | — |  |  | (9,001) |  |  | (13,241) |  |  | — |  |  | (13,241) |
Maturities of investments held to maturity | 14,570 |  |  | — |  |  | 14,570 |  |  | 19,700 |  |  | — |  |  | 19,700 |
Proceeds from called investments | 495 |  |  | — |  |  | 495 |  |  | 1,500 |  |  | — |  |  | 1,500 |
Principal payments from note receivable | 53 |  |  | — |  |  | 53 |  |  | 60 |  |  | — |  |  | 60 |
Net cash used in investing activities | (34,635) |  |  | — |  |  | (34,635) |  |  | (31,052) |  |  | — |  |  | (31,052) |
Financing Activities |  |  |  |  |  |  |  |  |  |  |
Stock options exercised | 4,987 |  |  | — |  |  | 4,987 |  |  | 2,259 |  |  | — |  |  | 2,259 |
Repurchase of stock | (26,846) |  |  | — |  |  | (26,846) |  |  | (16,620) |  |  | — |  |  | (16,620) |
Employee taxes paid by withholding shares | (1,097) |  |  | — |  |  | (1,097) |  |  | (1,614) |  |  | — |  |  | (1,614) |
Cash dividends paid to stockholders | (16,728) |  |  | — |  |  | (16,728) |  |  | (13,663) |  |  | — |  |  | (13,663) |
Net cash used in financing activities | (39,684) |  |  | — |  |  | (39,684) |  |  | (29,638) |  |  | — |  |  | (29,638) |
Net decrease in cash and cash equivalents | (19,463) |  |  | — |  |  | (19,463) |  |  | (2,696) |  |  | — |  |  | (2,696) |
Cash and cash equivalents, beginning of year | 21,457 |  |  | — |  |  | 21,457 |  |  | 24,153 |  |  | — |  |  | 24,153 |
Cash and cash equivalents, end of year | $ | 1,994 |  |  | $ | — |  |  | $ | 1,994 |  |  | $ | 21,457 |  |  | $ | — |  |  | $ | 21,457 |
No corrections impacted the classifications between net operating, net investing, or net financing cash flow activities.

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- Definition The entire disclosure for reporting accounting changes and error corrections. It includes the conveyance of information necessary for a user of the Company's financial information to understand all aspects and required disclosure information concerning all changes and error corrections reported in the Company's financial statements for the period. + References Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 250 -URI http://asc.fasb.org/topic&trid=2122394 + Details
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