14.

Restatement of Previously Issued Financial Statements

Subsequent to the issuance of our unaudited condensed consolidated financial statements for the quarter ended June 30, 2011, the Company determined that there were errors included in the previously issued condensed consolidated financial statements as described below. As a result, we have restated our condensed consolidated financial statements as of December 31, 2010 and for the three and nine months ended September 30, 2010 to correct the errors described below.

The restatement corrects the following errors:

Depreciation

•

The Company's historical method of systematically and rationally allocating equipment depreciation using the units of production depreciation methodology (the "Units of Production Method") requires an estimate of future tons of production over the remaining useful lives of equipment. The estimates of future tons of production over the remaining useful lives of equipment were not properly re-evaluated subsequent to the initial assumptions utilized in the adoption, in 2006, of the Units of Production Method. To appropriately apply the Units of Production Method, the Company should have periodically re-evaluated the assumptions underlying its application of the Units of Production Method and changed the assumptions underlying the accounting estimate beginning January 1, 2009. The effects of correcting this error are a net increase in depreciation expense and a net decrease in loss on disposal, both of which are included in cost of sales, and a net increase in accumulated depreciation.

•

The Company also corrected its estimate of the remaining lives of non-operating equipment depreciated using the straight-line method of depreciation. The effects of correcting this error are a net decrease in depreciation expense, which is reflected in selling, general and administrative expense.

•

Historical salvage value estimates used to systematically and rationally allocate property and equipment depreciation were incorrect as they did not sufficiently consider the estimated disposal value at the end of the property and equipment's useful life. The effects of correcting this error are an increase in depreciation expense, which is reflected in cost of sales and selling, general and administrative expense, and an increase in accumulated depreciation.

Other Errors

•

A contractual arrangement entered into with Lucid Energy LLC ("Lucid Energy") during 2008 was incorrectly accounted for as notes receivable within Other Assets. The contractual arrangement with Lucid Energy represented an interest in a variable interest entity which should have resulted in the entity being consolidated during 2009 and subsequently deconsolidated following the retrospective adoption of the FASB authoritative guidance which changed the method of identifying the primary beneficiary. The adoption of this guidance did not have a material impact on the Company's consolidated financial statements. Upon deconsolidation, the Company's investment in the entity should have been recorded as research and development expense within selling, general and administrative expense. The adjustments required to correct these errors have resulted in an increase in selling, general, and administrative expense, a decrease in interest income, and a decrease in other assets.

•

Certain equipment leases historically accounted for as operating leases should have been recorded as capital leases. The correction of this error increases depreciation expense and decreases rental expense, both of which are included in cost of sales, and increases interest expense in each period. The correction of this error also increased property and equipment, net, and capital lease obligations.

•

Certain costs capitalized upon the relocation of machinery and equipment to our Bossier City facility in 2008 and 2009 should have been expensed. The effects of correcting these errors were a reduction in machinery and equipment of $2.8 million as of September 30, 2011, and the related tax effects.

•

Certain previously identified immaterial errors were corrected as part of the restatement.

The impact on the Company's previously reported condensed consolidated statement of operations for the three and nine months ended September 30, 2010 are shown in the following tables (in thousands, except per share data):


				Restatement Adjustments
	As Previously Reported			Depreciation			Other			As Restated
Three Months Ended September 30, 2010
Net sales	$	112,770		$	—		$	—		$	112,770
Cost of sales		101,302			1,147			(160	)		102,289

Gross profit		11,468			(1,147	)		160			10,481
Selling, general and administrative		7,988			2			285			8,275

Operating income		3,480			(1,149	)		(125	)		2,206
Other expense		138			—			—			138
Interest income		(243	)		—			27			(216	)
Interest expense		2,206			—			257			2,463

Income (loss) before income taxes		1,379			(1,149	)		(409	)		(179	)
Provision for (benefit from) income taxes		686			(540	)		(191	)		(45	)

Net income (loss)	$	693		$	(609	)	$	(218	)	$	(134	)

Basic income (loss) per share	$	0.07								$	(0.01	)

Diluted income (loss) per share	$	0.07								$	(0.01	)


				Restatement Adjustments
	As Previously Reported			Depreciation			Other			As Restated
Nine Months Ended September 30, 2010
Net sales	$	289,277		$	—		$	—		$	289,277
Cost of sales		262,945			3,151			(412	)		265,684

Gross profit		26,332			(3,151	)		412			23,593
Selling, general and administrative		21,254			(38	)		855			22,071

Operating income		5,078			(3,113	)		(443	)		1,522
Other income		(289	)		—			—			(289	)
Interest income		(709	)		—			66			(643	)
Interest expense		5,482			—			752			6,234

Income (loss) before income taxes		594			(3,113	)		(1,261	)		(3,780	)
Provision for (benefit from) income taxes		242			(914	)		(324	)		(996	)

Net income (loss)	$	352		$	(2,199	)	$	(937	)	$	(2,784	)

Basic income (loss) per share	$	0.04								$	(0.30	)

Diluted income (loss) per share	$	0.04								$	(0.30	)

The following table presents the impact of the restatement adjustments on the Company's previously reported consolidated balance sheet at December 31, 2010 (in thousands):


				Restatement Adjustments
	As Previously Reported			Depreciation			Other			As Restated
As of December 31, 2010
Assets
Current assets:
Cash and cash equivalents	$	51		$	—		$	—		$	51
Trade and other receivables, net		66,474			—			—			66,474
Costs and estimated earnings in excess of billings on uncompleted contracts		45,533			—			—			45,533
Inventories		80,887			—			—			80,887
Refundable income taxes		15,299			—			(200	)		15,099
Deferred income taxes		6,293			—			—			6,293
Prepaid expenses and other		2,163			—			—			2,163

Total current assets		216,700			—			(200	)		216,500
Property and equipment, net		171,766			(24,214	)		6,722			154,274
Goodwill		21,451			—			—			21,451
Other assets		25,288			(243	)		(2,387	)		22,658

Total assets	$	435,205		$	(24,457	)	$	4,135		$	414,883

Liabilities and Stockholders' Equity
Current liabilities:
Current portion of long-term debt	$	5,714		$	—		$	—		$	5,714
Current portion of capital lease obligations		1,087			—			2,170			3,257
Accounts payable		28,463			—			—			28,463
Accrued liabilities		11,448			—			—			11,448
Billings in excess of costs and estimated earnings on uncompleted contracts		14,808			—			—			14,808

Total current liabilities		61,520			—			2,170			63,690
Note payable to financial institution		68,000			—			—			68,000
Long-term debt, less current portion		17,786			—			—			17,786
Capital lease obligations, less current portion		7,731			—			7,974			15,705
Deferred income taxes		25,694			(9,331	)		(1,781	)		14,582
Pension and other long-term liabilities		8,828			—			—			8,828

Total liabilities		189,559			(9,331	)		8,363			188,591
Stockholders' equity:
Preferred stock		—			—			—			—
Common stock		93			—			—			93
Additional paid-in-capital		107,578			—			—			107,578
Retained earnings		140,494			(15,126	)		(4,891	)		120,477
Accumulated other comprehensive loss		(2,519	)		—			663			(1,856	)

Total stockholders' equity		245,646			(15,126	)		(4,228	)		226,292

Total liabilities and stockholders' equity	$	435,205		$	(24,457	)	$	4,135		$	414,883

The following tables present the impact of the restatement adjustments on the Company's previously reported condensed consolidated statement of cash flows for the nine months ended September 30, 2010. Unrealized gain on foreign currency forward contracts in the amount of $0.7 million and equity in earnings of an unconsolidated subsidiary, net of dividends in the amount of $0.2 million have been reclassified within net cash used in operating activities to conform to the current period presentation. In addition, issuance of notes receivable in the amount of $0.5 million and insurance proceeds in the amount of $0.3 million have been reclassified within net cash used in investing activities to conform to current period presentation in the condensed consolidated statements of cash flows. These reclassifications are presented in the Restatement Adjustments column and had no impact on cash flows from operations, income from operations, cash flows from investing activities, net income, or total assets.


	Nine Months Ended September 30, 2010
	As Previously Reported			Restatement Adjustments			As Restated
Cash flows from operating activities:
Net income (loss)	$	352		$	(3,136	)	$	(2,784	)
Adjustments to reconcile net income (loss) to net cash used in operating activities:
Depreciation and amortization		5,186			5,035			10,221
Amortization of intangible assets		90			66			156
Provision for doubtful accounts		(124	)		—			(124	)
Equity in earnings of unconsolidated subsidiary, net of dividends received		—			192			192
Amortization of debt issuance costs		905			—			905
Deferred income taxes		5,389			(1,238	)		4,151
Loss on disposal of property and equipment		528			(300	)		228
Stock-based compensation expense		594			—			594
Tax benefit from stock option plans		31			—			31
Unrealized gain on foreign currency forward contracts		—			(687	)		(687	)
Changes in operating assets and liabilities:
Trade and other receivables, net		(36,866	)		—			(36,866	)
Costs and estimated earnings in excess of billings on uncompleted contracts, net		(8,482	)		—			(8,482	)
Inventories		(6,419	)		—			(6,419	)
Refundable income taxes		(3,255	)		—			(3,255	)
Prepaid expenses and other		1,620			(4	)		1,616
Accounts payable		3,308			—			3,308
Accrued and other liabilities		1,668			673			2,341

Net cash used in operating activities		(35,475	)		601			(34,874	)

Cash flows from investing activities:
Additions to property and equipment		(15,537	)		—			(15,537	)
Proceeds from sale of property and equipment		18			—			18
Issuance of notes receivable		—			(450	)		(450	)
Insurance proceeds		—			321			321
Other investing activities		(984	)		984			—

Net cash used in investing activities		(16,503	)		855			(15,648	)

Cash flows from financing activities:
Tax witholdings related to net share settlements of restricted share awards and performance shares		(87	)		—			(87	)
Payments on long-term debt		(4,286	)		—			(4,286	)
Borrowings under note payable to financial institutions		159,977			—			159,977
Payments on note payable to financial institutions		(102,867	)		—			(102,867	)
Borrowings from capital lease obligation		2,865			—			2,865
Payments on capital lease obligations		(303	)		(1,456	)		(1,759	)
Payments of debt issuance costs		(3,315	)		—			(3,315	)

Net cash provided by financing activities		51,984			(1,456	)		50,528

Change in cash and cash equivalents		6			—			6
Cash and cash equivalents, beginning of period		31			—			31

Cash and cash equivalents, end of period	$	37		$	—		$	37

Non-cash investing and financing activities:
Escrow account related to capital lease financing	$	2,726			—		$	2,726
Accrued property and equipment purchases		1,725			—			1,725