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 June 30, 2011 and December 31, 2010 and for the three and six months ended June 30, 2011 and 2010 to correct 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, and a net decrease in accumulated depreciation.

•

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 to 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 June 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 six months ended June 30, 2011 and June 30, 2010 are shown in the following tables (in thousands, except per share data):


				Restatement Adjustments
Three Months Ended June 30, 2011	As Previously Reported			Depreciation			Other			As Restated
Three Months Ended June 30, 2011	As Previously Reported			Depreciation			Other			As Restated
Net sales	$	143,801		$	—		$	—		$	143,801
Cost of sales		125,872			1,424			(166	)		127,130

Gross profit		17,929			(1,424	)		166			16,671
Selling, general and administrative		5,381			(28	)		250			5,603

Operating income		12,548			(1,396	)		(84	)		11,068
Other expense		1,604			(1,320	)		—			284
Interest income		(56	)		—			33			(23	)
Interest expense		2,344			—			231			2,575

Income before income taxes		8,656			(76	)		(348	)		8,232
Provision for income taxes		3,281			(5	)		(21	)		3,255

Net income	$	5,375		$	(71	)	$	(327	)	$	4,977

Basic earnings per share	$	0.58								$	0.53

Diluted earnings per share	$	0.57								$	0.53


				Restatement Adjustments
Three Months Ended June 30, 2010	As Previously Reported			Depreciation			Other			As Restated
Three Months Ended June 30, 2010	As Previously Reported			Depreciation			Other			As Restated
Net sales	$	96,125		$	—		$	—		$	96,125
Cost of sales		90,358			970			(126	)		91,202

Gross profit		5,767			(970	)		126			4,923
Selling, general and administrative		6,621			(21	)		285			6,885

Operating loss		(854	)		(949	)		(159	)		(1,962	)
Other expense		228			—			—			228
Interest income		(235	)		—			22			(213	)
Interest expense		1,934			—			267			2,201

Loss before income taxes		(2,781	)		(949	)		(448	)		(4,178	)
Benefit from income taxes		(1,384	)		234			110			(1,040	)

Net loss	$	(1,397	)	$	(1,183	)	$	(558	)	$	(3,138	)

Basic loss per share	$	(0.15	)							$	(0.34	)

Diluted loss per share	$	(0.15	)							$	(0.34	)


				Restatement Adjustments
Six Months Ended June 30, 2011	As Previously Reported			Depreciation			Other			As Restated
Six Months Ended June 30, 2011	As Previously Reported			Depreciation			Other			As Restated
Net sales	$	255,259		$	—		$	—		$	255,259
Cost of sales		221,746			2,406			(332	)		223,820

Gross profit		33,513			(2,406	)		332			31,439
Selling, general and administrative		12,696			(54	)		250			12,892

Operating income		20,817			(2,352	)		82			18,547
Other expense		1,717			(1,320	)		—			397
Interest income		(89	)		—			66			(23	)
Interest expense		4,718			—			475			5,193

Income before income taxes		14,471			(1,032	)		(459	)		12,980
Provision for income taxes		5,530			(393	)		(66	)		5,071

Net income	$	8,941		$	(639	)	$	(393	)	$	7,909

Basic earnings per share	$	0.96								$	0.85

Diluted earnings per share	$	0.96								$	0.85


				Restatement Adjustments
Six Months Ended June 30, 2010	As Previously Reported			Depreciation			Other			As Restated
Six Months Ended June 30, 2010	As Previously Reported			Depreciation			Other			As Restated
Net sales	$	176,507		$	—		$	—		$	176,507
Cost of sales		161,643			2,004			(252	)		163,395

Gross profit		14,864			(2,004	)		252			13,112
Selling, general and administrative		13,266			(40	)		570			13,796

Operating income (loss)		1,598			(1,964	)		(318	)		(684	)
Other income		(427	)		—			—			(427	)
Interest income		(466	)		—			39			(427	)
Interest expense		3,276			—			495			3,771

Loss before income taxes		(785	)		(1,964	)		(852	)		(3,601	)
Benefit from income taxes		(444	)		(374	)		(133	)		(951	)

Net loss	$	(341	)	$	(1,590	)	$	(719	)	$	(2,650	)

Basic loss per share	$	(0.04	)							$	(0.29	)

Diluted loss per share	$	(0.04	)							$	(0.29	)

The following tables present the impact of the restatement adjustments on the Company's previously reported consolidated balance sheet at June 30, 2011 and December 31, 2010 (in thousands):


				Restatement Adjustments
As of June 30, 2011	As Previously Reported			Depreciation			Other			As Restated
As of June 30, 2011	As Previously Reported			Depreciation			Other			As Restated
Assets
Current assets:
Cash and cash equivalents	$	43		$	—		$	—		$	43
Trade and other receivables, net		93,753			—			—			93,753
Costs and estimated earnings in excess of billings on uncompleted contracts		59,811			—			—			59,811
Inventories		74,178			—			—			74,178
Deferred income taxes		6,442			—			—			6,442
Prepaid expenses and other		1,566			—			—			1,566

Total current assets		235,793			—			—			235,793
Property and equipment, net		171,661			(25,277	)		5,595			151,979
Goodwill		20,478			—			—			20,478
Other assets		20,205			(212	)		(2,780	)		17,213

Total assets	$	448,137		$	(25,489	)	$	2,815		$	425,463

Liabilities and Stockholders' Equity
Current liabilities:
Current portion of long-term debt	$	5,714		$	—		$	—		$	5,714
Note payable to financial institution		72,819			—			—			72,819
Current portion of capital lease obligations		1,118			—			2,275			3,393
Accounts payable		19,478			—			—			19,478
Accrued liabilities		18,388			—			200			18,588
Billings in excess of costs and estimated earnings on uncompleted contracts		18,884			—			—			18,884

Total current liabilities		136,401			—			2,475			138,876
Long-term debt, less current portion		13,500			—			—			13,500
Capital lease obligations, less current portion		7,164			—			6,810			13,974
Deferred income taxes		26,958			(9,724	)		(1,849	)		15,385
Pension and other long-term liabilities		8,827			—			—			8,827

Total liabilities		192,850			(9,724	)		7,436			190,562
Commitments and contingencies
Stockholders' equity:
Preferred stock		—			—			—			—
Common stock		93			—			—			93
Additional paid-in-capital		108,066			—			—			108,066
Retained earnings		149,435			(15,765	)		(5,284	)		128,386
Accumulated other comprehensive loss		(2,307	)		—			663			(1,644	)

Total stockholders' equity		255,287			(15,765	)		(4,621	)		234,901

Total liabilities and stockholders' equity	$	448,137		$	(25,489	)	$	2,815		$	425,463


				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 six months ended June 30, 2011 and June 30, 2010. Unrealized gain on foreign currency forward contracts in the amount of $0.3 million and $0.9 million, respectively, has been reclassified within net cash used in operating activities to conform to the current period presentation. This reclassification is presented in the Restatement Adjustments column and had no impact on cash flows from operations, income from operations, net income, or total assets.


	Six Months Ended June 30, 2011
	As Previously Reported			Restatement Adjustments			As Restated
Cash flows from operating activities:
Net income	$	8,941		$	(1,032	)	$	7,909
Adjustments to reconcile net income to net cash used in operating activities:
Depreciation and amortization		3,465			3,582			7,047
Amortization of intangible assets		50			—			50
Allowance on notes receivable		3,171			—			3,171
Provision for doubtful accounts		(909	)		—			(909	)
Equity in earnings of unconsolidated subsidiary, net of dividends received		394			—			394
Amortization of debt issuance costs		1,021			—			1,021
Deferred income taxes		1,115			(461	)		654
Loss on disposal of property and equipment		364			(72	)		292
Gain on sale of business		(1,567	)		(1,320	)		(2,887	)
Stock-based compensation expense		449			—			449
Unrealized loss on foreign currency forward contracts		—			290			290
Changes in operating assets and liabilities:
Trade and other receivables, net		(29,164	)		—			(29,164	)
Costs and estimated earnings in excess of billings on uncompleted contracts, net		(10,202	)		—			(10,202	)
Inventories		3,072			—			3,072
Refundable income taxes		15,299			(200	)		15,099
Prepaid expenses and other		792			112			904
Accounts payable		(9,045	)		—			(9,045	)
Accrued and other liabilities		7,151			(90	)		7,061

Net cash used in operating activities		(5,603	)		809			(4,794	)

Cash flows from investing activities:
Additions to property and equipment		(8,580	)		—			(8,580	)
Proceeds from sale of business		13,727			—			13,727
Proceeds from sale of property and equipment		95			—			95
Issuance of note receivable		(250	)		250			—
Other investing activities		567			—			567

Net cash provided by investing activities		5,559			250			5,809

Cash flows from financing activities:
Proceeds from issuance of common stock		90			—			90
Tax withholdings related to net share settlements of restricted share awards and performance shares		(51	)		—			(51	)
Payments on long-term debt		(4,286	)		—			(4,286	)
Borrowings under note payable to financial institutions		88,050			—			88,050
Payments on note payable to financial institutions		(83,231	)		—			(83,231	)
Payments on capital lease obligations		(536	)		(1,059	)		(1,595	)

Net cash (used in) provided by financing activities		36			(1,059	)		(1,023	)

Change in cash and cash equivalents		(8	)		—			(8	)
Cash and cash equivalents, beginning of period		51			—			51

Cash and cash equivalents, end of period	$	43		$	—		$	43

Non-cash investing and financing activities:
Escrow account related to capital lease financing	$	2,726		$	—		$	2,726
Accrued property and equipment purchases		1,028			—			1,028


	Six Months Ended June 30, 2010
	As Previously Reported			Restatement Adjustments			As Restated
Cash flows from operating activities:
Net loss	$	(341	)	$	(2,309	)	$	(2,650	)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation and amortization		3,448			3,207			6,655
Amortization of intangible assets		60			66			126
Provision for doubtful accounts		(60	)		—			(60	)
Equity in earnings of unconsolidated subsidiary, net of dividends received		(506	)		—			(506	)
Amortization of debt issuance costs		519			—			519
Deferred income taxes		193			(507	)		(314	)
Loss on disposal of property and equipment		515			(167	)		348
Stock-based compensation expense		546			—			546
Tax benefit from stock option plans		(123	)		—			(123	)
Unrealized gain on foreign currency forward contracts		—			(924	)		(924	)
Changes in operating assets and liabilities:
Trade and other receivables, net		(16,169	)		—			(16,169	)
Costs and estimated earnings in excess of billings on uncompleted contracts, net		(7,082	)		—			(7,082	)
Inventories		(7,067	)		—			(7,067	)
Refundable income taxes		1,372			—			1,372
Prepaid expenses and other		484			244			728
Accounts payable		(2,937	)		—			(2,937	)
Accrued and other liabilities		(314	)		796			482

Net cash used in operating activities		(27,462	)		406			(27,056	)

Cash flows from investing activities:
Additions to property and equipment		(11,320	)		—			(11,320	)
Proceeds from sale of property and equipment		18			—			18
Issuance of note receivable		(870	)		570			(300	)
Other investing activities		320			—			320

Net cash used in investing activities		(11,852	)		570			(11,282	)

Cash flows from financing activities:
Tax withholdings related to net share settlements of restricted share awards and performance shares		(83	)		—			(83	)
Payments on long-term debt		(4,287	)		—			(4,287	)
Borrowings under note payable to financial institutions		105,536			—			105,536
Payments on note payable to financial institutions		(62,109	)		—			(62,109	)
Borrowings from capital lease obligation		2,146			—			2,146
Payments on capital lease obligations		(201	)		(976	)		(1,177	)
Payments of debt amendment costs		(1,675	)		—			(1,675	)

Net cash provided by financing activities		39,327			(976	)		38,351

Change in cash and cash equivalents		13			—			13
Cash and cash equivalents, beginning of period		31			—			31

Cash and cash equivalents, end of period	$	44		$	—			44

Non-cash investing and financing activities:
Escrow account related to capital lease financing	$	3,445		$	—		$	3,445
Accrued property and equipment purchases		1,660			—			1,660