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Error Correction | 3 Months Ended
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Mar. 31, 2020
Accounting Changes and Error Corrections [Abstract] |
Error Correction | Error CorrectionWe have corrected herein our consolidated financial statements as of March 31, 2019 and for the three months ended March 31, 2019, in accordance with Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) Topic 250, Accounting Changes and Error Corrections. Error Correction Background During the preparation of the 2019 Annual Report on Form 10-K (filed on February 27, 2020) 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 12), stock options and restricted stock awards are fully vested when an active employee or director meets certain retirement eligibility requirements. We have corrected the previously issued 2019 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 13). Description of Tables The following tables represent our corrected consolidated statements of income, statements of stockholders' equity, and statements of cash flows for the three months ended March 31, 2019, as well as our corrected consolidated balance sheet at March 31, 2019. The values as previously reported for March 31, 2019 were derived from our Quarterly Report on Form 10-Q for the three month ended March 31, 2019 filed on May 2, 2019.
| Consolidated Statements of Income |  |  |  |
| Three Months Ended March 31, 2019 |  |  |  |
| Previously Reported |  | Corrections |  | As Corrected
| (in thousands, except share and per share data) |  |  |  |
Net sales | $ | 113,822 |  |  | $ | — |  |  | $ | 113,822 |
Cost of sales | 88,029 |  |  | 363 |  | (a) | 88,392 |
Gross profit | 25,793 |  |  | (363) |  |  | 25,430 |
Selling, general and administrative expenses | 11,001 |  |  | 2,676 |  | (b) | 13,677 |
Loss (gain) on disposal of assets | 284 |  |  | — |  |  | 284 |
Income from operations | 14,508 |  |  | (3,039) |  |  | 11,469 |
Interest income, net | 9 |  |  | — |  |  | 9 |
Other (expense) income, net | (26) |  |  | — |  |  | (26) |
Income before taxes | 14,491 |  |  | (3,039) |  |  | 11,452 |
Income tax provision | 3,589 |  |  | (894) |  | (c) | 2,695 |
Net income | $ | 10,902 |  |  | $ | (2,145) |  |  | $ | 8,757 |
Earnings per share: |  |  |  |  |
Basic | $ | 0.21 |  |  | $ | (0.04) |  |  | $ | 0.17 |
Diluted | $ | 0.21 |  |  | $ | (0.04) |  |  | $ | 0.17 |
Weighted average shares outstanding: |  |  |  |  |
Basic | 51,992,150 |  |  | — |  |  | 51,992,150 |
Diluted | 52,369,660 |  |  | — |  |  | 52,369,660 |
Balance Sheet Data (at end of period): |  |  |  |  |
Current assets | $ | 146,798 |  |  | $ | (287) |  | (c) | $ | 146,511 |
Total assets | 319,525 |  |  | (287) |  | (c) | 319,238 |
Current liabilities | 44,000 |  |  | (918) |  | (d) | 43,082 |
Deferred income taxes | 12,713 |  |  | (2,545) |  | (c) | 10,168 |
Other long-term liabilities | 3,442 |  |  | — |  |  | 3,442 |
Total stockholders' equity | $ | 259,370 |  |  | $ | 3,176 |  | (e) | $ | 262,546 |
(a) The share-based compensation correction to cost of sales for the quarter ended March 31, 2019 was approximately $0.4 million. (b) The share-based compensation correction to selling, general and administrative expenses for the quarter ended March 31, 2019 was approximately $3.0 million. Included in the correction to selling, general and administrative expenses is a correction to our employee profit sharing bonus plan (Note 13) of approximately $0.4 million for the quarter ended March 31, 2019. (c) The corrections to income tax receivable and deferred tax liability are the tax effect of the share-based compensation correction. (d) This is the cumulative reduction of our employee profit sharing bonus plan (Note 13) liability as a result of the share-based compensation correction. The prior period costs were recovered through our estimated 2019 fourth quarter payment which was paid in early 2020. (e) This is the cumulative effect on stockholders' equity as result of the share-based compensation correction. See table below for a descriptions of the changes in stockholders' equity in the consolidated statements of stockholders' equity for the quarter ended March 31, 2019.
|  | Consolidated Statements of Stockholders’ Equity |  |  |  |  |  |  |  |
|  | Common Stock |  |  |  | Paid-in |  | Retained |  |
|  | Shares |  | Amount |  | Capital |  | Earnings |  | Total
As Previously Reported |  | (in thousands) |  |  |  |  |  |  |  |
| Balance at December 31, 2018 | 51,991 |  |  | $ | 208 |  |  | $ | — |  |  | $ | 247,291 |  |  | $ | 247,499 |
| Net income | — |  |  | — |  |  | — |  |  | 10,902 |  |  | 10,902 |
| Stock options exercised and restricted | 237 |  |  | 1 |  |  | 4,009 |  |  | — |  |  | 4,010 |
| stock awards granted |  |  |  |  |  |  |  |  |  |
| Share-based compensation | — |  |  | — |  |  | 2,030 |  |  | — |  |  | 2,030 |
| Stock repurchased and retired | (129) |  |  | (1) |  |  | (5,070) |  |  | — |  |  | (5,071) |
| Balance at March 31, 2019 | 52,099 |  |  | 208 |  |  | 969 |  |  | 258,193 |  |  | 259,370 |
Correction Impacts |  |  |  |  |  |  |  |  |  |
| Balance at December 31, 2018 | — |  |  | — |  |  | — |  |  | 1,944 |  |  | 1,944 |
| Net income | — |  |  | — |  |  | — |  |  | (2,145) |  |  | (2,145) |
| Stock options exercised and restricted | — |  |  | — |  |  | — |  |  | — |  |  | — |
| stock awards granted |  |  |  |  |  |  |  |  |  |  |  |  |  |
| Share-based compensation | — |  |  | — |  |  | 3,377 |  |  | — |  |  | 3,377 |
| Stock repurchased and retired | — |  |  | — |  |  | — |  |  | — |  |  | — |
| Balance at March 31, 2019 | — |  |  | — |  |  | 3,377 |  |  | (201) |  |  | 3,176 |
As Corrected |  |  |  |  |  |  |  |  |  |  |  |
| Balance at December 31, 2018 | 51,991 |  |  | $ | 208 |  |  | $ | — |  |  | $ | 249,235 |  |  | $ | 249,443 |
| Net income | — |  |  | — |  |  | — |  |  | 8,757 |  |  | 8,757 |
| Stock options exercised and restricted | 237 |  |  | 1 |  |  | 4,009 |  |  | — |  |  | 4,010 |
| stock awards granted |  |  |  |  |  |  |  |  |  |  |  |  |  |
| Share-based compensation | — |  |  | — |  |  | 5,407 |  |  | — |  |  | 5,407 |
| Stock repurchased and retired | (129) |  |  | (1) |  |  | (5,070) |  |  | — |  |  | (5,071) |
| Balance at March 31, 2019 | 52,099 |  |  | $ | 208 |  |  | $ | 4,346 |  |  | $ | 257,992 |  |  | $ | 262,546 |
See descriptions of changes to net income in the consolidated statement of income for the three months ended March 31, 2019 in the table above.
| Consolidated Statements of Cash Flows |  |  |  |
| Three Months Ended March 31, 2019 |  |  |  |
| Previously Reported |  | Corrections |  | As Corrected
Operating Activities | (in thousands) |  |  |  |
Net income | $ | 10,902 |  |  | $ | (2,145) |  |  | $ | 8,757 |
Adjustments to reconcile net income to net cash provided by operating activities: |  |  |  |  |
Depreciation and amortization | 5,914 |  |  | — |  |  | 5,914 |
Provision for losses on accounts receivable, net of adjustments | 115 |  |  | — |  |  | 115 |
Provision for excess and obsolete inventories | 357 |  |  | — |  |  | 357 |
Share-based compensation | 2,030 |  |  | 3,377 |  |  | 5,407 |
Loss (gain) on disposition of assets | 284 |  |  | — |  |  | 284 |
Foreign currency transaction (gain) loss | (16) |  |  | — |  |  | (16) |
Interest income on note receivable | (6) |  |  | — |  |  | (6) |
Deferred income taxes | 1,887 |  |  | (978) |  |  | 909 |
Changes in assets and liabilities: |  |  |  |  |
Accounts receivable | (4,725) |  |  | — |  |  | (4,725) |
Income taxes | 1,348 |  |  | 84 |  |  | 1,432 |
Inventories | 2,678 |  |  | — |  |  | 2,678 |
Prepaid expenses and other | (561) |  |  | — |  |  | (561) |
Accounts payable | (5,730) |  |  | — |  |  | (5,730) |
Deferred revenue | 25 |  |  | — |  |  | 25 |
Accrued liabilities and donations | 411 |  |  | (338) |  |  | 73 |
Net cash provided by operating activities | 14,913 |  |  | — |  |  | 14,913 |
Investing Activities |  |  |  |  |
Capital expenditures | (8,772) |  |  | — |  |  | (8,772) |
Proceeds from sale of property, plant and equipment | 52 |  |  | — |  |  | 52 |
Principal payments from note receivable | 17 |  |  | — |  |  | 17 |
Net cash used in investing activities | (8,703) |  |  | — |  |  | (8,703) |
Financing Activities |  |  |  |  |
Stock options exercised | 4,010 |  |  | — |  |  | 4,010 |
Repurchase of stock | (4,483) |  |  | — |  |  | (4,483) |
Employee taxes paid by withholding shares | (588) |  |  | — |  |  | (588) |
Net cash used in financing activities | (1,061) |  |  | — |  |  | (1,061) |
Net decrease in cash and cash equivalents | 5,149 |  |  | — |  |  | 5,149 |
Cash and cash equivalents, beginning of year | 1,994 |  |  | — |  |  | 1,994 |
Cash and cash equivalents, end of year | $ | 7,143 |  |  | $ | — |  |  | $ | 7,143 |
See descriptions of changes to net income and the balance sheet in the tables above.

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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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