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Selected Quarterly Financial Data (Unaudited) (Tables) | 12 Months Ended
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Dec. 31, 2017
Quarterly Financial Information Disclosure [Abstract] |
Quarterly Financial Information |
POWER SOLUTIONS INTERNATIONAL, INC. CONDENSED CONSOLIDATED BALANCE SHEETS
(in thousands) |  | As of
|  | March 31, 2017 |  | June 30, 2017 |  | September 30, 2017
ASSETS |  |  |  |  |  |
Current assets |  |  |  |  |  |
Cash and cash equivalents |  | $ | 342 |  |  | $ | — |  |  | $ | — |
Accounts receivable, net |  | 64,305 |  |  | 56,673 |  |  | 60,811 |
Income tax receivable |  | 6,829 |  |  | 1,996 |  |  | 841 |
Inventories, net |  | 97,286 |  |  | 103,335 |  |  | 113,074 |
Prepaid expenses and other current assets |  | 15,291 |  |  | 12,453 |  |  | 14,536 |
Total current assets |  | 184,053 |  |  | 174,457 |  |  | 189,262 |
Property, plant and equipment, net |  | 19,230 |  |  | 19,050 |  |  | 18,974 |
Intangible assets, net |  | 24,819 |  |  | 23,610 |  |  | 22,401 |
Goodwill |  | 29,835 |  |  | 29,835 |  |  | 29,835 |
Other noncurrent assets |  | 5,053 |  |  | 4,518 |  |  | 6,035 |
TOTAL ASSETS |  | $ | 262,990 |  |  | $ | 251,470 |  |  | $ | 266,507 |
LIABILITIES, MEZZANINE AND STOCKHOLDERS’ EQUITY |  |  |  |  |  |
Current liabilities |  |  |  |  |  |
Accounts payable |  | $ | 67,167 |  |  | $ | 55,610 |  |  | $ | 54,195 |
Contingent consideration |  | 30 |  |  | 29 |  |  | 20 |
Revolving line of credit, current |  | 16,887 |  |  | 25,263 |  |  | 41,332 |
Other accrued liabilities |  | 35,234 |  |  | 35,379 |  |  | 41,393 |
Total current liabilities |  | 119,318 |  |  | 116,281 |  |  | 136,940 |
Deferred income taxes |  | 933 |  |  | 1,066 |  |  | 1,210 |
Warrants |  | 20,700 |  |  | 21,500 |  |  | 23,200 |
Long-term debt, less current maturities, net |  | 54,045 |  |  | 54,168 |  |  | 54,305 |
Other noncurrent liabilities |  | 13,328 |  |  | 12,438 |  |  | 13,312 |
TOTAL LIABILITIES |  | $ | 208,324 |  |  | $ | 205,453 |  |  | $ | 228,967 |
MEZZANINE EQUITY |  |  |  |  |  |
Series B convertible preferred stock, net of issuance costs |  | $ | 24,617 |  |  | $ | 27,807 |  |  | $ | 31,411 |
STOCKHOLDERS’ EQUITY |  |  |  |  |  |
Preferred stock |  | $ | — |  |  | $ | — |  |  | $ | — |
Common stock |  | 14 |  |  | 14 |  |  | 14 |
Additional paid-in capital |  | 100,686 |  |  | 96,543 |  |  | 91,737 |
Accumulated deficit |  | (59,070 | ) |  | (66,817 | ) |  | (76,018 | )
Treasury stock, at cost |  | (11,582 | ) |  | (11,530 | ) |  | (9,604 | )
TOTAL STOCKHOLDERS’ EQUITY |  | 30,048 |  |  | 18,210 |  |  | 6,129 |
TOTAL LIABILITIES, MEZZANINE AND STOCKHOLDERS’ EQUITY |  | $ | 262,990 |  |  | $ | 251,470 |  |  | $ | 266,507 |
POWER SOLUTIONS INTERNATIONAL, INC. CONDENSED CONSOLIDATED BALANCE SHEETS
(in thousands) |  | As of
|  | March 31, 2016 (Restated) |  | June 30, 2016 |  | September 30, 2016
ASSETS |  |  |  |  |  |
Current assets |  |  |  |  |  |
Cash and cash equivalents |  | $ | 1,495 |  |  | $ | 435 |  |  | $ | 1,610 |
Accounts receivable, net |  | 45,384 |  |  | 57,884 |  |  | 53,364 |
Income tax receivable |  | 1,723 |  |  | 3,384 |  |  | 5,737 |
Inventories, net |  | 139,519 |  |  | 115,062 |  |  | 111,133 |
Prepaid expenses and other current assets |  | 4,132 |  |  | 4,026 |  |  | 5,146 |
Total current assets |  | 192,253 |  |  | 180,791 |  |  | 176,990 |
Property, plant and equipment, net |  | 20,662 |  |  | 20,386 |  |  | 20,257 |
Intangible assets, net |  | 30,316 |  |  | 28,888 |  |  | 27,459 |
Goodwill |  | 29,835 |  |  | 29,835 |  |  | 29,835 |
Deferred income taxes |  | 19,285 |  |  | — |  |  | — |
Other noncurrent assets |  | 2,664 |  |  | 2,621 |  |  | 2,821 |
TOTAL ASSETS |  | $ | 295,015 |  |  | $ | 262,521 |  |  | $ | 257,362 |
LIABILITIES AND STOCKHOLDERS’ EQUITY |  |  |  |  |  |
Current liabilities |  |  |  |  |  |
Accounts payable |  | $ | 43,160 |  |  | $ | 49,729 |  |  | $ | 45,764 |
Current maturities of long-term debt |  | — |  |  | — |  |  | 375 |
Contingent consideration |  | 5,481 |  |  | 100 |  |  | 88 |
Revolving line of credit, current |  | — |  |  | 14,038 |  |  | 16,994 |
Other accrued liabilities |  | 17,929 |  |  | 19,182 |  |  | 22,405 |
Total current liabilities |  | 66,570 |  |  | 83,049 |  |  | 85,626 |
Revolving line of credit |  | 80,568 |  |  | — |  |  | — |
Deferred income taxes |  | — |  |  | 372 |  |  | 522 |
Warrants |  | 226 |  |  | — |  |  | — |
Long-term debt, less current maturities, net |  | 53,799 |  |  | 110,929 |  |  | 111,517 |
Other noncurrent liabilities |  | 11,952 |  |  | 12,833 |  |  | 12,730 |
TOTAL LIABILITIES |  | $ | 213,115 |  |  | $ | 207,184 |  |  | $ | 210,395 |
STOCKHOLDERS’ EQUITY |  |  |  |  |  |
Preferred stock |  | $ | — |  |  | $ | — |  |  | $ | — |
Common stock |  | 11 |  |  | 12 |  |  | 12 |
Additional paid-in capital |  | 83,729 |  |  | 86,043 |  |  | 86,408 |
Retained earnings (accumulated deficit) |  | 9,612 |  |  | (19,180 | ) |  | (27,895 | )
Treasury stock, at cost |  | (11,452 | ) |  | (11,537 | ) |  | (11,558 | )
TOTAL STOCKHOLDERS’ EQUITY |  | 81,900 |  |  | 55,337 |  |  | 46,967 |
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY |  | $ | 295,015 |  |  | $ | 262,521 |  |  | $ | 257,362 |
POWER SOLUTIONS INTERNATIONAL, INC. CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands, except per share amounts) |  | For the Quarter Ended
|  | March 31, 2017 |  | June 30, 2017 |  | September 30, 2017 |  | December 31, 2017
Net sales |  | $ | 84,265 |  |  | $ | 100,922 |  |  | $ | 99,953 |  |  | $ | 131,476 |
Cost of sales |  | 74,497 |  |  | 88,443 |  |  | 86,702 |  |  | 115,981 |
Gross profit |  | 9,768 |  |  | 12,479 |  |  | 13,251 |  |  | 15,495 |
Operating expenses: |  |  |  |  |  |  |  |
Research, development and engineering expenses |  | 3,950 |  |  | 3,848 |  |  | 5,687 |  |  | 6,459 |
Selling, general and administrative expenses |  | 10,209 |  |  | 10,688 |  |  | 12,062 |  |  | 11,297 |
Asset impairment charges |  | — |  |  | — |  |  | — |  |  | 1 |
Amortization of intangible assets |  | 1,209 |  |  | 1,209 |  |  | 1,210 |  |  | 1,210 |
Total operating expenses |  | 15,368 |  |  | 15,745 |  |  | 18,959 |  |  | 18,967 |
Operating loss |  | (5,600 | ) |  | (3,266 | ) |  | (5,708 | ) |  | (3,472 | )
Other expense: |  |  |  |  |  |  |  |
Interest expense |  | 6,080 |  |  | 1,404 |  |  | 1,654 |  |  | 1,703 |
Loss from change in fair value of warrants |  | — |  |  | 800 |  |  | 1,700 |  |  | 1,500 |
Loss on debt extinguishment and modifications |  | 11,921 |  |  | — |  |  | — |  |  | — |
Other expense (income), net |  | 453 |  |  | 2,142 |  |  | (9 | ) |  | (225 | )
Total other expense |  | 18,454 |  |  | 4,346 |  |  | 3,345 |  |  | 2,978 |
Loss before income taxes |  | (24,054 | ) |  | (7,612 | ) |  | (9,053 | ) |  | (6,450 | )
Income tax expense (benefit) |  | 479 |  |  | 135 |  |  | 149 |  |  | (320 | )
Net loss |  | (24,533 | ) |  | (7,747 | ) |  | (9,202 | ) |  | (6,130 | )
Deemed dividend on Series B convertible stock |  | — |  |  | (3,190 | ) |  | (3,603 | ) |  | (31,067 | )
Net loss available to common stockholders |  | $ | (24,533 | ) |  | $ | (10,937 | ) |  | $ | (12,805 | ) |  | $ | (37,197 | )
POWER SOLUTIONS INTERNATIONAL, INC. CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands, except per share amounts) |  | For the Quarter Ended
|  | March 31, 2016 (Restated) |  | June 30, 2016 |  | September 30, 2016 |  | December 31, 2016
Net sales |  | $ | 76,470 |  |  | $ | 85,771 |  |  | $ | 78,944 |  |  | $ | 98,280 |
Cost of sales |  | 69,827 |  |  | 81,253 |  |  | 72,820 |  |  | 86,376 |
Gross profit |  | 6,643 |  |  | 4,518 |  |  | 6,124 |  |  | 11,904 |
Operating expenses: |  |  |  |  |  |  |  |
Research, development and engineering expenses |  | 4,904 |  |  | 4,817 |  |  | 4,498 |  |  | 4,742 |
Selling, general and administrative expenses |  | 6,405 |  |  | 6,699 |  |  | 6,855 |  |  | 8,563 |
Asset impairment charges |  | 345 |  |  | 1,064 |  |  | 38 |  |  | 167 |
Amortization of intangible assets |  | 1,428 |  |  | 1,429 |  |  | 1,429 |  |  | 1,430 |
Contingent consideration |  | — |  |  | (283 | ) |  | — |  |  | — |
Total operating expenses |  | 13,082 |  |  | 13,726 |  |  | 12,820 |  |  | 14,902 |
Operating loss |  | (6,439 | ) |  | (9,208 | ) |  | (6,696 | ) |  | (2,998 | )
Other expense: |  |  |  |  |  |  |  |
Interest expense |  | 1,438 |  |  | 1,649 |  |  | 3,726 |  |  | 4,402 |
Gain from change in fair value of warrants |  | (1,256 | ) |  | (157 | ) |  | — |  |  | — |
Loss on debt extinguishment and modifications |  | — |  |  | — |  |  | 25 |  |  | 332 |
Other expense, net |  | 59 |  |  | 92 |  |  | 62 |  |  | 146 |
Total other expense |  | 241 |  |  | 1,584 |  |  | 3,813 |  |  | 4,880 |
Loss before income taxes |  | (6,680 | ) |  | (10,792 | ) |  | (10,509 | ) |  | (7,878 | )
Income tax (benefit) expense |  | (3,357 | ) |  | 18,000 |  |  | (1,792 | ) |  | (1,238 | )
Net loss |  | $ | (3,323 | ) |  | $ | (28,792 | ) |  | $ | (8,717 | ) |  | $ | (6,640 | )
POWER SOLUTIONS INTERNATIONAL, INC. CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(in thousands) |  | For the Year to Date Period Ended
|  | March 31, 2017 |  | June 30, 2017 |  | September 30, 2017
Cash provided by (used in) operating activities |  |  |  |  |  |
Net loss |  | $ | (24,533 | ) |  | $ | (32,280 | ) |  | $ | (41,482 | )
Adjustments to reconcile net (loss) income to net cash provided by operating activities: |  |  |  |  |  |
Amortization of intangible assets |  | 1,209 |  |  | 2,419 |  |  | 3,628 |
Depreciation |  | 1,172 |  |  | 2,342 |  |  | 3,502 |
Change in valuation of warrants |  | — |  |  | 800 |  |  | 2,500 |
Stock compensation expense |  | (865 | ) |  | (1,028 | ) |  | (297 | )
Amortization of financing fees |  | 3,109 |  |  | 3,441 |  |  | 3,778 |
Deferred income taxes |  | 469 |  |  | 602 |  |  | 746 |
Loss on extinguishment of debt |  | 11,921 |  |  | 11,921 |  |  | 11,921 |
Provision for doubtful accounts |  | 48 |  |  | 131 |  |  | 216 |
Provision for inventory obsolescence |  | 146 |  |  | 539 |  |  | 882 |
Loss on disposal of fixed assets |  | 10 |  |  | 66 |  |  | 115 |
Other sources, net |  | 135 |  |  | 198 |  |  | 189 |
Changes in operating assets and liabilities: |  |  |  |  |  |
Trade accounts receivable, net |  | (4,017 | ) |  | 3,532 |  |  | (691 | )
Inventory, net |  | 3,122 |  |  | (3,326 | ) |  | (13,408 | )
Prepaid expenses and other assets |  | (1,624 | ) |  | 1,238 |  |  | (1,359 | )
Trade accounts payable |  | 15,186 |  |  | 3,244 |  |  | 1,879 |
Income taxes refundable |  | 298 |  |  | 5,135 |  |  | 6,293 |
Accrued expenses |  | 2,432 |  |  | 3,242 |  |  | 8,867 |
Other noncurrent liabilities |  | (121 | ) |  | (894 | ) |  | (821 | )
Net cash provided by (used in) operating activities |  | 8,097 |  |  | 1,322 |  |  | (13,542 | )
Cash (used in) provided by investing activities |  |  |  |  |  |
Capital expenditures |  | (1,896 | ) |  | (2,669 | ) |  | (3,856 | )
Other sources, net |  | — |  |  | 245 |  |  | 245 |
Net cash used in investing activities |  | (1,896 | ) |  | (2,424 | ) |  | (3,611 | )
Cash (used in) provided by financing activities |  |  |  |  |  |
Repayments of issuance of long-term debt |  | (71,400 | ) |  | (71,400 | ) |  | (71,400 | )
Financing fees |  | (253 | ) |  | (928 | ) |  | (928 | )
Net proceeds from stock offering and warrant |  | 59,396 |  |  | 59,396 |  |  | 59,396 |
Proceeds from revolving line of credit |  | 85,945 |  |  | 209,082 |  |  | 324,416 |
Repayments of revolving line of credit |  | (81,833 | ) |  | (196,593 | ) |  | (295,859 | )
Acquisition of businesses contingent consideration payments |  | (6 | ) |  | (9 | ) |  | (19 | )
Other uses, net |  | — |  |  | (738 | ) |  | (745 | )
Net cash (used in) provided by financing activities |  | (8,151 | ) |  | (1,190 | ) |  | 14,861 |
Decrease in cash |  | (1,950 | ) |  | (2,292 | ) |  | (2,292 | )
Cash at beginning of the year |  | 2,292 |  |  | 2,292 |  |  | 2,292 |
Cash at end of the period |  | $ | 342 |  |  | $ | — |  |  | $ | — |
POWER SOLUTIONS INTERNATIONAL, INC. CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(in thousands) |  | For the Year to Date Period Ended
|  | March 31, 2016 (Restated) |  | June 30, 2016 |  | September 30, 2016
Cash provided by (used in) operating activities |  |  |  |  |  |
Net loss |  | $ | (3,323 | ) |  | $ | (32,115 | ) |  | $ | (40,832 | )
Adjustments to reconcile net (loss) income to net cash provided by operating activities: |  |  |  |  |  |
Amortization of intangible assets |  | 1,429 |  |  | 2,857 |  |  | 4,286 |
Depreciation |  | 1,118 |  |  | 2,250 |  |  | 3,412 |
Change in valuation of warrants |  | (1,256 | ) |  | (1,413 | ) |  | (1,413 | )
Stock compensation expense |  | 441 |  |  | 692 |  |  | 1,188 |
Amortization of financing fees |  | 143 |  |  | 445 |  |  | 1,451 |
Deferred income taxes |  | (1,628 | ) |  | 18,029 |  |  | 18,179 |
Loss on extinguishment of debt |  | — |  |  | — |  |  | 25 |
Asset impairment charges |  | 345 |  |  | 1,410 |  |  | 1,447 |
Change in valuation of contingent consideration |  | — |  |  | (283 | ) |  | (283 | )
(Income) provision for doubtful accounts |  | (10 | ) |  | 24 |  |  | 69 |
Provision for inventory obsolescence |  | 288 |  |  | 3,441 |  |  | 3,928 |
Loss (gain) on disposal of fixed assets |  | 236 |  |  | (852 | ) |  | (846 | )
Other sources, net |  | 113 |  |  | 205 |  |  | 266 |
Changes in operating assets and liabilities: |  |  |  |  |  |
Trade accounts receivable, net |  | 25,158 |  |  | 12,624 |  |  | 17,100 |
Inventory, net |  | 22,288 |  |  | 42,947 |  |  | 46,390 |
Prepaid expenses and other assets |  | (207 | ) |  | (1,261 | ) |  | (2,443 | )
Trade accounts payable |  | (36,459 | ) |  | (30,324 | ) |  | (34,056 | )
Income taxes refundable (payable) |  | 3,441 |  |  | 1,783 |  |  | (682 | )
Accrued expenses |  | 1,891 |  |  | 3,041 |  |  | 6,099 |
Other noncurrent liabilities |  | (98 | ) |  | 1,011 |  |  | 1,028 |
Net cash provided by operating activities |  | 13,910 |  |  | 24,511 |  |  | 24,313 |
Cash flows from investing activities |  |  |  |  |  |
Capital expenditures |  | (1,099 | ) |  | (1,977 | ) |  | (3,286 | )
Proceeds from disposal of assets |  | — |  |  | 2,466 |  |  | 2,466 |
Other uses, net |  | — |  |  | — |  |  | (245 | )
Net cash (used in) provided by investing activities |  | (1,099 | ) |  | 489 |  |  | (1,065 | )
Cash flows from financing activities |  |  |  |  |  |
Proceeds from issuance of long-term debt |  | — |  |  | 60,000 |  |  | 60,000 |
Financing fees |  | — |  |  | (3,402 | ) |  | (3,402 | )
Net proceeds from stock offering and warrant |  | — |  |  | 2,001 |  |  | 2,001 |
Proceeds from revolving line of credit |  | 46,902 |  |  | 111,902 |  |  | 196,179 |
Repayments of revolving line of credit |  | (63,634 | ) |  | (195,164 | ) |  | (276,484 | )
Acquisition of businesses contingent consideration payments |  | (3,029 | ) |  | (8,258 | ) |  | (8,279 | )
Other uses, net |  | — |  |  | (89 | ) |  | (98 | )
Net cash used in financing activities |  | (19,761 | ) |  | (33,010 | ) |  | (30,083 | )
Decrease in cash |  | (6,950 | ) |  | (8,010 | ) |  | (6,835 | )
Cash at beginning of the year |  | 8,445 |  |  | 8,445 |  |  | 8,445 |
Cash at end of the period |  | $ | 1,495 |  |  | $ | 435 |  |  | $ | 1,610 |
Effect of Restatement | The following table sets forth the effects of the restatement adjustments on revenue and pretax income (loss) in the Consolidated Statements of Operations for the years ended December 31, 2015 and 2014. Due to the substantial number of restatement adjustments, each of the restatement categories listed in the table below may represent multiple related adjustments that have been aggregated for disclosure purposes.
(in thousands) |  | For the Year Ended December 31,
|  | 2015 |  | 2014
|  | Net Sales |  | Income (Loss) Before Income Taxes |  | Net Sales |  | Income (Loss) Before Income Taxes
Previously reported |  | $ | 389,446 |  |  | $ | 13,890 |  |  | $ | 347,995 |  |  | $ | 34,539 |
Restatement adjustments: |  |  |  |  |  |  |  |
Revenue recognition adjustments |  | (27,059 | ) |  | (9,215 | ) |  | (415 | ) |  | (2,700 | )
Product development cost |  | — |  |  | (1,001 | ) |  | — |  |  | (2,397 | )
Inventory valuation |  | — |  |  | (1,069 | ) |  | — |  |  | 38 |
Impairment of long-lived assets |  | — |  |  | (11,733 | ) |  | — |  |  | (310 | )
Product warranty |  | — |  |  | (2,484 | ) |  | — |  |  | 591 |
Accrued liabilities |  | — |  |  | (1,106 | ) |  | — |  |  | 591 |
Purchase accounting |  | — |  |  | — |  |  | — |  |  | (845 | )
Equity investment |  | — |  |  | 125 |  |  | — |  |  | (286 | )
Net restatement adjustments |  | (27,059 | ) |  | (26,483 | ) |  | (415 | ) |  | (5,318 | )
Restated |  | $ | 362,387 |  |  | $ | (12,593 | ) |  | $ | 347,580 |  |  | $ | 29,221 |
The following table presents the effect of the restatement adjustments and reclassifications on the Consolidated Statement of Operations for 2015:
(in thousands, except for per share data) |  | Year Ended December 31, 2015
|  | Previously Reported |  | Restatement Adjustments and Reclassifications |  | Restated
Net sales |  | $ | 389,446 |  |  | $ | (27,059 | ) |  | $ | 362,387 |
Cost of sales |  | 326,612 |  |  | (15,464 | ) |  | 311,148 |
Gross profit |  | 62,834 |  |  | (11,595 | ) |  | 51,239 |
Operating expenses: |  |  |  |  |  |
Research, development and engineering expenses |  | 21,681 |  |  | 1,893 |  |  | 23,574 |
Selling, general and administrative expenses |  | 27,376 |  |  | 1,461 |  |  | 28,837 |
Asset impairment charge |  | — |  |  | 11,686 |  |  | 11,686 |
Amortization of intangible assets |  | 4,582 |  |  | — |  |  | 4,582 |
Change in fair value of contingent consideration |  | — |  |  | (23 | ) | — |  | (23 | )
Total operating expenses |  | 53,639 |  |  | 15,017 |  |  | 68,656 |
Operating income (loss) |  | 9,195 |  |  | (26,612 | ) |  | (17,417 | )
Other (income) expense: |  |  |  |  |  |
Interest expense |  | 4,327 |  |  | (7 | ) |  | 4,320 |
Contingent consideration |  | 48 |  |  | (48 | ) |  | — |
Gain from change in fair value of warrants |  | (9,299 | ) |  | (1 | ) |  | (9,300 | )
Loss on debt extinguishment and modifications |  | — |  |  | 12 |  |  | 12 |
Other expense, net |  | 229 |  |  | (85 | ) |  | 144 |
Total other income |  | (4,695 | ) |  | (129 | ) |  | (4,824 | )
Income (loss) before income taxes |  | 13,890 |  |  | (26,483 | ) |  | (12,593 | )
Income tax benefit |  | (388 | ) |  | (9,314 | ) |  | (9,702 | )
Net income (loss) |  | $ | 14,278 |  |  | $ | (17,169 | ) |  | $ | (2,891 | )
Weighted-average common shares outstanding: |  |  |  |  |  |
Basic |  | 10,808 |  |  | — |  |  | 10,808 |
Diluted |  | 11,074 |  |  | (83 | ) |  | 10,991 |
Earnings (loss) per common share: |  |  |  |  |  |
Basic |  | $ | 1.32 |  |  | $ | (1.59 | ) |  | $ | (0.27 | )
Diluted |  | $ | 0.45 |  |  | $ | (1.56 | ) |  | $ | (1.11 | )
The following table presents the effect of the restatement adjustments and reclassifications on the Consolidated Statement of Operations for 2014:
(in thousands, except for per share data) |  | Year Ended December 31, 2014
|  | Previously Reported |  | Restatement Adjustments and Reclassifications |  | Restated
Net sales |  | $ | 347,995 |  |  | $ | (415 | ) |  | $ | 347,580 |
Cost of sales |  | 280,950 |  |  | 2,590 |  |  | 283,540 |
Gross profit |  | 67,045 |  |  | (3,005 | ) |  | 64,040 |
Operating expenses: |  |  |  |  |  |
Research, development and engineering expenses |  | 16,900 |  |  | 2,405 |  |  | 19,305 |
Selling, general and administrative expenses |  | 23,088 |  |  | 54 |  |  | 23,142 |
Asset impairment charge |  | — |  |  | 310 |  |  | 310 |
Amortization of intangible assets |  | 1,013 |  |  | — |  |  | 1,013 |
Change in fair value of contingent consideration |  | — |  |  | (3,840 | ) |  | (3,840 | )
Total operating expenses |  | 41,001 |  |  | (1,071 | ) |  | 39,930 |
Operating income |  | 26,044 |  |  | (1,934 | ) |  | 24,110 |
Other expense (income): |  |  |  |  |  |
Interest expense |  | 1,331 |  |  | 11 |  |  | 1,342 |
Contingent consideration |  | (3,840 | ) |  | 3,840 |  |  | — |
Gain from change in fair value of warrants |  | (6,169 | ) |  | (1 | ) |  | (6,170 | )
Other expense (income), net |  | 183 |  |  | (466 | ) |  | (283 | )
Total other income |  | (8,495 | ) |  | 3,384 |  |  | (5,111 | )
Income before income taxes |  | 34,539 |  |  | (5,318 | ) |  | 29,221 |
Income tax expense |  | 10,813 |  |  | (3,069 | ) |  | 7,744 |
Net income |  | $ | 23,726 |  |  | $ | (2,249 | ) |  | $ | 21,477 |
Weighted-average common shares outstanding: |  |  |  |  |  |
Basic |  | 10,707 |  |  | (2 | ) |  | 10,705 |
Diluted |  | 11,132 |  |  | (1 | ) |  | 11,131 |
Earnings (loss) per common share: |  |  |  |  |  |
Basic |  | $ | 2.22 |  |  | $ | (0.21 | ) |  | $ | 2.01 |
Diluted |  | $ | 2.13 |  |  | $ | (0.75 | ) |  | $ | 1.38 |
The following table sets forth the effects of the restatement adjustments and reclassifications adjustments on the Company's Consolidated Balance Sheet as of December 31, 2015:
(in thousands) |  | As of December 31, 2015
|  | Previously Reported |  | Restatement Adjustments and Reclassifications |  | Restated
ASSETS |  |  |  |  |  |
Current assets |  |  |  |  |  |
Cash and cash equivalents |  | $ | 8,445 |  |  | $ | — |  |  | $ | 8,445 |
Accounts receivable, net |  | 104,365 |  |  | (33,833 | ) |  | 70,532 |
Income tax receivable |  | 5,230 |  |  | 35 |  |  | 5,265 |
Inventories, net |  | 130,347 |  |  | 31,748 |  |  | 162,095 |
Prepaid expenses and other current assets |  | 4,288 |  |  | (1,585 | ) |  | 2,703 |
Total current assets |  | 252,675 |  |  | (3,635 | ) |  | 249,040 |
Property, plant and equipment, net |  | 26,001 |  |  | (3,192 | ) |  | 22,809 |
Intangible assets, net |  | 31,745 |  |  | — |  |  | 31,745 |
Goodwill |  | 41,466 |  |  | (11,631 | ) |  | 29,835 |
Deferred income taxes |  | 819 |  |  | 16,838 |  |  | 17,657 |
Other noncurrent assets |  | 7,230 |  |  | (4,479 | ) |  | 2,751 |
TOTAL ASSETS |  | $ | 359,936 |  |  | $ | (6,099 | ) |  | $ | 353,837 |
LIABILITIES AND STOCKHOLDERS’ EQUITY |  |  |  |  |  |
Current liabilities |  |  |  |  |  |
Accounts payable |  | $ | 76,078 |  |  | $ | 3,745 |  |  | $ | 79,823 |
Contingent consideration |  | 8,788 |  |  | (513 | ) |  | 8,275 |
Other accrued liabilities |  | 14,396 |  |  | 3,450 |  |  | 17,846 |
Total current liabilities |  | 99,262 |  |  | 6,682 |  |  | 105,944 |
Revolving line of credit |  | 97,299 |  |  | — |  |  | 97,299 |
Warrants |  | 1,482 |  |  | — |  |  | 1,482 |
Long-term debt, less current maturities, net |  | 53,820 |  |  | (15 | ) |  | 53,805 |
Other noncurrent liabilities |  | 1,776 |  |  | 8,658 |  |  | 10,434 |
TOTAL LIABILITIES |  | $ | 253,639 |  |  | $ | 15,325 |  |  | $ | 268,964 |
STOCKHOLDERS’ EQUITY |  |  |  |  |  |
Preferred stock |  | $ | — |  |  | $ | — |  |  | $ | — |
Common stock |  | 12 |  |  | (1 | ) |  | 11 |
Additional paid-in capital |  | 75,179 |  |  | 8,198 |  |  | 83,377 |
Retained earnings |  | 35,356 |  |  | (22,419 | ) |  | 12,937 |
Treasury stock, at cost |  | (4,250 | ) |  | (7,202 | ) |  | (11,452 | )
TOTAL STOCKHOLDERS’ EQUITY |  | 106,297 |  |  | (21,424 | ) |  | 84,873 |
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY |  | $ | 359,936 |  |  | $ | (6,099 | ) |  | $ | 353,837 |
The following table sets forth the effects of the restatement adjustments and reclassifications on the Company's Consolidated Balance Sheet as of December 31, 2014:
(in thousands) |  | As of December 31, 2014
|  | Previously Reported |  | Restatement Adjustments and Reclassifications |  | Restated
ASSETS |  |  |  |  |  |
Current assets |  |  |  |  |  |
Cash and cash equivalents |  | $ | 6,561 |  |  | $ | — |  |  | $ | 6,561 |
Accounts receivable, net |  | 81,740 |  |  | (5,474 | ) |  | 76,266 |
Inventories, net |  | 93,903 |  |  | 12,347 |  |  | 106,250 |
Prepaid expenses and other current assets |  | 4,801 |  |  | 39 |  |  | 4,840 |
Deferred income taxes |  | 3,998 |  |  | 4,554 |  |  | 8,552 |
Total current assets |  | 191,003 |  |  | 11,466 |  |  | 202,469 |
Property, plant and equipment, net |  | 20,892 |  |  | (2,938 | ) |  | 17,954 |
Intangible assets, net |  | 21,392 |  |  | (200 | ) |  | 21,192 |
Goodwill |  | 23,546 |  |  | (132 | ) |  | 23,414 |
Deferred income tax asset |  | — |  |  | 13 |  |  | 13 |
Other noncurrent assets |  | 5,804 |  |  | (3,901 | ) |  | 1,903 |
TOTAL ASSETS |  | $ | 262,637 |  |  | $ | 4,308 |  |  | $ | 266,945 |
LIABILITIES AND STOCKHOLDERS’ EQUITY |  |  |  |  |  |
Current liabilities |  |  |  |  |  |
Accounts payable |  | $ | 60,877 |  |  | $ | 6,836 |  |  | $ | 67,713 |
Current maturities of long-term debt |  | 1,667 |  |  | — |  |  | 1,667 |
Other accrued liabilities |  | 13,504 |  |  | 4,678 |  |  | 18,182 |
Total current liabilities |  | 76,048 |  |  | 11,514 |  |  | 87,562 |
Revolving line of credit |  | 78,030 |  |  | — |  |  | 78,030 |
Deferred income taxes |  | 3,241 |  |  | (3,241 | ) |  | — |
Warrants |  | 11,036 |  |  | — |  |  | 11,036 |
Long-term debt, less current maturities, net |  | 2,361 |  |  | — |  |  | 2,361 |
Other noncurrent liabilities |  | 1,122 |  |  | 351 |  |  | 1,473 |
TOTAL LIABILITIES |  | $ | 171,838 |  |  | $ | 8,624 |  |  | $ | 180,462 |
STOCKHOLDERS’ EQUITY |  |  |  |  |  |
Preferred stock |  | $ | — |  |  | $ | — |  |  | $ | — |
Common stock |  | 12 |  |  | (1 | ) |  | 11 |
Additional paid-in capital |  | 73,959 |  |  | 7,787 |  |  | 81,746 |
Retained earnings |  | 21,078 |  |  | (5,250 | ) |  | 15,828 |
Treasury stock, at cost |  | (4,250 | ) |  | (6,852 | ) |  | (11,102 | )
TOTAL STOCKHOLDERS’ EQUITY |  | 90,799 |  |  | (4,316 | ) |  | 86,483 |
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY |  | $ | 262,637 |  |  | $ | 4,308 |  |  | $ | 266,945 |
The following table sets forth the effect of the restatement adjustments on the components of total stockholders, equity as of December 31, 2013:
(in thousands) |  | As of December 31, 2013
|  | Previously Reported |  | Restatement Adjustments |  | Restated
Preferred stock |  | $ | — |  |  | $ | — |  |  | $ | — |
Common Stock |  | 11 |  |  | — |  |  | 11 |
Additional paid-in capital |  | 57,308 |  |  | 4,622 |  |  | 61,930 |
Accumulated deficit |  | (2,649 | ) |  | (3,079 | ) |  | (5,728 | )
Treasury stock, at cost |  | (4,250 | ) |  | (4,435 | ) |  | (8,685 | )
Total stockholders' equity |  | $ | 50,421 |  |  | $ | (2,891 | ) |  | $ | 47,530 |
The following table summarizes the effects of the restatement on the Company's Consolidated Statements of Changes in Stockholders’ Equity as of December 31, 2015 and 2014:
(in thousands) |  | Year Ended December 31,
|  | 2015 |  | 2014
Stockholders' equity, as previously reported |  | $ | 106,297 |  |  | $ | 90,799 |
Effect of restatement adjustments on net income/retained earnings |  | (21,424 | ) |  | (4,316 | )
Stockholders' equity, restated |  | $ | 84,873 |  |  | $ | 86,483 |
The following table includes comparison of selected previously reported and restated information from the Company's Consolidated Statements of Cash Flows for 2015 and 2014:
(in thousands) |  | For the Year Ended December 31,
|  | 2015 |  | 2014
|  | Previously Reported |  | Restated |  | Previously Reported |  | Restated
Net cash used in operating activities |  | $ | (23,049 | ) |  | $ | (22,815 | ) |  | $ | (15,685 | ) |  | $ | (15,094 | )
Net cash used in investing activities |  | (43,570 | ) |  | (43,805 | ) |  | (51,713 | ) |  | (52,322 | )
Net cash provided by financing activities |  | 68,503 |  |  | 68,504 |  |  | 67,653 |  |  | 67,671 |
Increase in cash |  | 1,884 |  |  | 1,884 |  |  | 255 |  |  | 255 |
Cash at beginning of year |  | 6,561 |  |  | 6,561 |  |  | 6,306 |  |  | 6,306 |
Cash at end of year |  | $ | 8,445 |  |  | $ | 8,445 |  |  | $ | 6,561 |  |  | $ | 6,561 |
The following table sets forth the effect of the restatement adjustments on the components of total stockholders' equity as of December 31, 2013:
(in thousands) |  | As of December 31, 2013
Stockholders' Equity |  | Previously Reported |  | Restatement Adjustments |  | Restated
Common stock |  | $ | 11 |  |  | $ | — |  |  | $ | 11 |
Additional paid-in capital |  | 57,308 |  |  | 4,622 |  |  | 61,930 |
Accumulated deficit |  | (2,648 | ) |  | (3,079 | ) |  | (5,649 | )
Treasury stock, at cost |  | (4,250 | ) |  | (4,435 | ) |  | (8,685 | )
Total |  | $ | 50,421 |  |  | $ | (2,891 | ) |  | $ | 47,607 |
The Company identified the following categories that required restatement or reclassification and were comprised of a number of related adjustments that have been aggregated for disclosure purposes:
(in thousands) |  | Three Months Ended March 31, 2016
|  | Net Sales |  | (Loss) Income Before Income Taxes
Previously Reported |  | $ | 61,814 |  |  | $ | (8,931 | )
Restatement adjustments: |  |  |  |
Revenue recognition adjustments |  | $ | 14,656 |  |  | $ | 3,111 |
Product development cost |  | — |  |  | 123 |
Inventory valuation |  | — |  |  | (404 | )
Impairment of long-lived assets |  | — |  |  | (557 | )
Product warranty |  | — |  |  | (319 | )
Accrued liabilities |  | — |  |  | 422 |
Equity investment |  | — |  |  | (125 | )
Net restatement adjustments |  | 14,656 |  |  | 2,251 |
Restated |  | $ | 76,470 |  |  | $ | (6,680 | )
The following table presents the effect of the restatement adjustments and reclassifications on the Consolidated Statement of Operations for three months ended March 31, 2016:
(in thousands, except for per share data) |  | Three Months Ended March 31, 2016
|  | Previously Reported |  | Restatement Adjustments and Reclassifications |  | Restated
Net sales |  | $ | 61,814 |  |  | $ | 14,656 |  |  | $ | 76,470 |
Cost of sales |  | 57,758 |  |  | 12,069 |  |  | 69,827 |
Gross profit |  | 4,056 |  |  | 2,587 |  |  | 6,643 |
Operating expenses: |  |  |  |  |  |
Research, development and engineering expenses |  | 5,250 |  |  | (346 | ) |  | 4,904 |
Selling, general and administrative expenses |  | 6,058 |  |  | 347 |  |  | 6,405 |
Asset impairment charge |  | — |  |  | 345 |  |  | 345 |
Amortization of intangible assets |  | 1,429 |  |  | (1 | ) |  | 1,428 |
Total operating expenses |  | 12,737 |  |  | 345 |  |  | 13,082 |
Operating loss |  | (8,681 | ) |  | 2,242 |  |  | (6,439 | )
Other expense (income): |  |  |  |  |  |
Interest expense |  | 1,421 |  |  | 17 |  |  | 1,438 |
Private placement warrants income |  | (1,256 | ) |  | — |  |  | (1,256 | )
Other expense, net |  | 85 |  |  | (26 | ) |  | 59 |
Total other expense |  | 250 |  |  | (9 | ) |  | 241 |
Loss before income taxes |  | (8,931 | ) |  | 2,251 |  |  | (6,680 | )
Income tax benefit |  | (3,680 | ) |  | 323 |  |  | (3,357 | )
Net loss |  | $ | (5,251 | ) |  | $ | 1,928 |  |  | $ | (3,323 | )
Weighted-average common shares outstanding: |  |  |  |  |  |
Basic |  | 10,819 |  |  | — |  |  | 10,819 |
Diluted |  | 10,819 |  |  | — |  |  | 10,819 |
(Loss) earnings per common share: |  |  |  |  |  |
Basic |  | $ | (0.49 | ) |  | $ | 0.07 |  |  | $ | (0.42 | )
Diluted |  | $ | (0.49 | ) |  | $ | 0.07 |  |  | $ | (0.42 | )
as of March 31, 2016:
(in thousands) |  | As of March 31, 2016
|  | Previously Reported |  | Restatement Adjustments and Reclassifications |  | Restated
ASSETS |  |  |  |  |  |
Current assets |  |  |  |  |  |
Cash and cash equivalents |  | $ | 1,495 |  |  | $ | — |  |  | $ | 1,495 |
Accounts receivable, net |  | 63,163 |  |  | (17,779 | ) |  | 45,384 |
Income tax receivable |  | — |  |  | 1,723 |  |  | 1,723 |
Inventories, net |  | 120,735 |  |  | 18,784 |  |  | 139,519 |
Prepaid expenses and other current assets |  | 9,496 |  |  | (5,364 | ) |  | 4,132 |
Total current assets |  | 194,889 |  |  | (2,636 | ) |  | 192,253 |
Property, plant and equipment, net |  | 24,289 |  |  | (3,627 | ) |  | 20,662 |
Intangible assets, net |  | 30,316 |  |  | — |  |  | 30,316 |
Goodwill |  | 41,466 |  |  | (11,631 | ) |  | 29,835 |
Deferred income taxes |  | 819 |  |  | 18,466 |  |  | 19,285 |
Other noncurrent assets |  | 7,181 |  |  | (4,517 | ) |  | 2,664 |
TOTAL ASSETS |  | $ | 298,960 |  |  | $ | (3,945 | ) |  | $ | 295,015 |
LIABILITIES AND STOCKHOLDERS’ EQUITY |  |  |  |  |  |
Current liabilities |  |  |  |  |  |
Accounts payable |  | $ | 41,491 |  |  | $ | 1,669 |  |  | $ | 43,160 |
Contingent consideration |  | — |  |  | 5,481 |  |  | 5,481 |
Other accrued liabilities |  | 19,692 |  |  | (1,763 | ) |  | 17,929 |
Total current liabilities |  | 61,183 |  |  | 5,387 |  |  | 66,570 |
Revolving line of credit |  | 80,568 |  |  | — |  |  | 80,568 |
Warrants |  | 226 |  |  | — |  |  | 226 |
Long-term debt, less current maturities, net |  | 53,946 |  |  | (147 | ) |  | 53,799 |
Other noncurrent liabilities |  | 1,670 |  |  | 10,282 |  |  | 11,952 |
TOTAL LIABILITIES |  | $ | 197,593 |  |  | $ | 15,522 |  |  | $ | 213,115 |
STOCKHOLDERS’ EQUITY |  |  |  |  |  |
Preferred stock |  | $ | — |  |  | $ | — |  |  | $ | — |
Common stock |  | 12 |  |  | (1 | ) |  | 11 |
Additional paid-in capital |  | 75,500 |  |  | 8,229 |  |  | 83,729 |
Retained earnings |  | 30,105 |  |  | (20,493 | ) |  | 9,612 |
Treasury stock, at cost |  | (4,250 | ) |  | (7,202 | ) |  | (11,452 | )
TOTAL STOCKHOLDERS’ EQUITY |  | 101,367 |  |  | (19,467 | ) |  | 81,900 |
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY |  | $ | 298,960 |  |  | $ | (3,945 | ) |  | $ | 295,015 |
The restatement effect on the previously issued condensed Consolidated Statement of Cash Flow for the three months ended March 31, 2016 is as follows:
(in thousands) |  | Three Months Ended March 31, 2016
|  | Previously Reported |  | Restatement and Reclassification |  | Reclassified
Net cash provided by operating activities |  | $ | 9,995 |  |  | $ | 3,915 |  |  | $ | 13,910 |
Net cash used in investing activities |  | (214 | ) |  | (885 | ) |  | (1,099 | )
Net cash used in financing activities |  | (16,731 | ) |  | (3,030 | ) |  | (19,761 | )
Decrease in cash |  | (6,950 | ) |  | — |  |  | (6,950 | )
Cash at beginning of year |  | 8,445 |  |  | — |  |  | 8,445 |
Cash at end of period |  | $ | 1,495 |  |  | $ | — |  |  | $ | 1,495 |

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