Correction of Immaterial Errors in Prior Period Financial Statements

6 Months Ended

Jul. 26, 2020

Accounting Changes and Error Corrections [Abstract]

Correction of Immaterial Errors in Prior Period Financial Statements

During the fourth quarter of fiscal year 2020, management identified certain immaterial errors related to share-based compensation expense of market-condition awards granted during fiscal years 2018, 2019 and 2020. At the inception of these grants, the Company appropriately determined that the awards contained a market condition and that the effect of the market condition should be reflected in the grant date fair value of the awards, with the resulting compensation expense fixed at inception and recognized ratably over the requisite service period, regardless of when, if ever, the market condition is satisfied. The actual awards, however, were incorrectly accounted for as performance-based awards, whereby the number of shares expected to vest and corresponding compensation expense was adjusted on a quarterly basis. The Company assessed the materiality of the errors from a qualitative and quantitative perspective, and concluded that the impact of the errors is not material. Therefore, the correction of the errors did not require the amendment of the Company's previously filed Annual Reports on Form 10-K or its Quarterly Reports on Form 10-Q for the impacted periods. The Company has corrected its consolidated financial statements for these errors for the impacted prior periods presented in this Quarterly Report on Form 10-Q.

The impact of the corrections on the Company's Statements of Income and Statements of Comprehensive Income for the three and six months ended July 28, 2019, are presented in the table below:


	Three Months Ended						Six Months Ended
	July 28, 2019						July 28, 2019
(in thousands, except per share data)	As Reported		As Corrected		As Reported		As Corrected
Selling, general and administrative	$	39,875	$	43,325	$	78,252	$	82,297
Product development and engineering	$	25,553	$	25,882	$	52,652	$	53,036
Total operating costs and expenses	$	69,336	$	73,115	$	137,794	$	142,223
Operating income	$	15,548	$	11,769	$	28,365	$	23,936
Income before taxes and equity in net gains (losses) of equity method investments	$	14,164	$	10,385	$	25,557	$	21,128
Provision for income taxes	$	8,966	$	8,361	$	6,654	$	5,945
Net income before equity in net gains (losses) of equity method investments	$	5,198	$	2,024	$	18,903	$	15,183
Net income	$	5,366	$	2,192	$	18,660	$	14,940
Earnings per share:
Basic	$	0.08	$	0.03	$	0.28	$	0.23
Diluted	$	0.08	$	0.03	$	0.28	$	0.22

Comprehensive income	$	5,244	$	2,070	$	18,526	$	14,806

There was no impact to the Company's Balance Sheets or to total operating cash flows in the Statements of Cash Flows for any periods presented in this Quarterly Report on Form 10-Q.