v3.8.0.1
Summary of Significant Accounting Policies (Tables)
 3 Months Ended
Mar. 31, 2018
Accounting Policies [Abstract]  
Schedule of New Accounting Pronouncements and Changes in Accounting Principles
The adoption of Topic 606 had the following impact on the Company’s consolidated statement of operations for the three months ended March 31, 2018 (in thousands):

 
As
Reported
 
Adjustments
 
Balances
Without Adoption of Topic 606
Net revenue
$
208,743

 
$
(846
)
 
$
207,897

Cost of goods sold
137,502

 
(485
)
 
$
137,017

 
 
 
 
 
 
Operating costs and expenses:
 
 
 
 
 
Advertising and marketing
8,870

 
(4
)
 
8,866

Selling expense
7,387

 
(15
)
 
7,372

Income tax expense
6,519

 
(72
)
 
6,447


The adoption of Topic 606 had the following impact on the Company’s consolidated balance sheet as of March 31, 2018 (in thousands):

 
As
Reported
 
Adjustments
 
Balances
without Adoption of Topic 606
Current assets:
 
 
 
 
 
Accounts receivable, net
$
113,450

 
$
(846
)
 
$
112,604

Inventories
39,970

 
446

 
40,416

 
 
 
 
 
 
Current liabilities:
 
 
 
 
 
Accounts payable
65,753

 
(58
)
 
65,695

Accrued expenses and other current liabilities
8,714

 
(72
)
 
8,642


The adjustments shown above are primarily attributed to a change in the criteria used to determine when the Company’s performance obligation is satisfied. Prior to the adoption of Topic 606, the Company’s performance obligation was satisfied when risk of loss related to the product transferred to the customer. After implementing Topic 606, the Company’s performance obligation is satisfied based on a set of criteria including the customer’s obligation to pay, physical possession, transfer of legal title, transfer of risk and rewards of ownership and the customer’s acceptance of the product. Depending on the arrangement with the customer, the application of this new criteria changed the timing of revenue recognition for certain contracts.

The cumulative effect of the changes made to the Company’s consolidated January 1, 2018 balance sheet for the adoption of Topic 606 was as follows (in thousands):

 
 
Balance at
December 31, 2017
 
Adjustments
Due to Topic 606
 
Balance at
January 1, 2018
Current assets:
 
 
 
 
 
 
Accounts receivable, net
 
$
101,012

 
$
1,000

 
$
102,012

Inventories
 
34,345

 
(531
)
 
33,814

 
 
 
 
 
 
 
Current liabilities:
 
 
 
 
 
 
Accounts payable
 
49,992

 
103

 
50,095

 
 
 
 
 
 
 
Long-term liabilities:
 
 
 
 
 
 
Deferred tax liability
 
267,771

 
83

 
267,854

 
 
 
 
 
 
 
Stockholders’ equity:
 
 
 
 
 
 
Retained earnings
 
208,279

 
198

 
208,477

Accumulated other comprehensive income
 
1,318

 
—

 
1,318

Non-controlling interest
 
342,240

 
85

 
342,325
Components of Inventories
The components of inventories are as follows:
(In thousands)
March 31,
2018
 
December 31, 2017
 

 

Ingredients and packaging
$
18,522

 
$
14,826

Finished goods
18,642

 
15,471

Inventory in transit to customers
2,806

 
4,048

 
$
39,970

 
$
34,345
Customer Concentration Risk
The Company has one customer that accounted for 10% or more of the Company’s total net revenue. The percentage of total net revenues for this customer is presented below by segment:
 
Three Months Ended
(% of Consolidated Net Revenues) 
March 31,
2018
 
 
March 31,
2017
 

 
 

Sweet Baked Goods
21.3
%
 
 
18.3
%
In-Store Bakery
0.6
%
 
 
0.7
%
Total
21.9
%
 
 
19.0
%