Restatement of Previously Issued Consolidated Financial Statements (Tables)

12 Months Ended

Dec. 31, 2017

Accounting Changes and Error Corrections [Abstract]

Schedule of Error Corrections and Prior Period Adjustments

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
	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
	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