Revision of Prior Period Financial Statements

12 Months Ended

Dec. 31, 2023

Accounting Changes and Error Corrections [Abstract]

Revision of Prior Period Financial Statements

Note 2 — Revision of Prior Period Financial Statements

During the current year-end financial reporting process, the Company identified a prior period accounting error related to the Company’s estimate for accrued payroll, and specifically accrued vacation that was concluded to not be material to the Company’s previously reported consolidated financial statements or unaudited interim condensed consolidated financial statements. The Company assessed the quantitative and qualitative factors associated with the foregoing error in accordance with SEC Staff Accounting Bulletin (“SAB”) No. 99 and 108, Materiality, codified in ASC 250, Presentation of Financial Statements, and concluded that the error was not material to any of the Company’s previously reported annual or interim consolidated financial statements. Notwithstanding this conclusion, the Company corrected the errors by revising the consolidated 2022 and 2021 accompanying consolidated financial statements and related notes to give effect to the correction of these errors.

The identified error related to the accuracy of the Company’s estimate for accrued payroll, and specifically accrued vacation, which US GAAP provides guidance for within ASC 710 - Compensation. Over the past three years the Company had paid vacation hours, either to current employees or for payouts to terminated employees, and such amounts were recorded to expense in the corresponding payroll periods that the vacation was paid.

The effect of the correction of the error noted above on the Company’s Consolidated Balance Sheets as of December 31, 2022 is as follows:


	December 31, 2022
	As reported		Adjustment		Revised
	(in thousands)
Deferred tax asset	$	28,338	$	2,502	$	30,840
Total assets	$	718,334	$	2,502	$	720,836
Accrued payroll and related taxes	$	42,704	$	10,395	$	53,099
Total current liabilities	$	178,619	$	10,395	$	189,014
Retained earnings	$	154,495	$	(7,893)	$	146,602
Total liabilities and stockholders' equity	$	718,334	$	2,502	$	720,836

The effect of the correction of the error noted above on the Company’s Consolidated Statements of Comprehensive Income for the year ended December 31, 2022 is as follows:


	Year ended December 31, 2022
	As reported		Adjustment		Revised
	(in thousands, except per share amounts)
Costs of services provided	$	1,496,336	$	529	$	1,496,865
Income before income taxes	$	45,082	$	(529)	$	44,553
Income tax provision	$	10,452	$	(142)	$	10,310
Net income	$	34,630	$	(387)	$	34,243
Basic earnings per common share	$	0.47	$	(0.01)	$	0.46
Diluted earnings per common share	$	0.47	$	(0.01)	$	0.46

The effect of the correction of the errors noted above on the Company’s Consolidated Statements of Comprehensive Income for the year ended December 31, 2021 is as follows:


	Year ended December 31, 2021
	As reported		Adjustment		Revised
	(in thousands, except per share amounts)
Costs of services provided	$	1,415,082	$	(3,689)	$	1,411,393
Income before income taxes	$	61,823	$	3,689	$	65,512
Income tax provision	$	15,960	$	1,009	$	16,969
Net income	$	45,863	$	2,680	$	48,543
Basic earnings per common share	$	0.61	$	0.04	$	0.65
Diluted earnings per common share	$	0.61	$	0.04	$	0.65

In addition to the effect of the corrections noted above, the errors also reduced retained earnings by $7.5 million and $10.2 million as of December 31, 2021 and December 31, 2020, respectively, as presented in the Consolidated Statements of Stockholders’ Equity. The effect of the correction of the errors noted above had no impact on the Company’s previously reported consolidated statements of cash flows for the years ended December 31, 2022 or 2021, except for adjustments to individual line items as described in the tables above. The effect of the correction of the errors above on income tax provision for the years ended December 31, 2022 and 2021 and related footnotes is reflected in Note 12 — Income Taxes.