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Basis of Presentation (Policies)
9 Months Ended
Sep. 30, 2015
Lower of Cost or Market Inventory Adjustments

Lower of Cost or Market and Other Inventory Adjustments

During the three-month period ended March 31, 2015, the Company reviewed the carrying values of all inventories and concluded that certain inventories in China had been impacted by changes in market conditions. Current market prices had fallen below carrying costs for certain inventories. Consequently, the Company recognized a $3,887 loss in cost of sales, to adjust finished goods and raw materials carrying values to the lower market prices on inventories inside China. The adjustments were based on current market prices for these or similar products, as determined by actual sales, bids, and/or quotes from third parties. The Company again reviewed the carrying values of all inventories as of June 30, 2015 and September 30, 2015 and concluded that no further adjustments were warranted as of those times. In addition, during the three month period ended March 31, 2015, the Company recognized a $485 loss in cost of sales as a result of other inventory adjustments unrelated to lower of cost or market issues.

Production Levels Below Normal Capacity

Production Levels Below Normal Capacity

As a result of the Company substantially reducing manufacturing production levels, including by idling and mothballing certain facilities, the component of the Company’s accounting policy for inventory relating to operating at production levels below normal capacity was triggered and resulted in certain production costs being expensed instead of being capitalized into inventory. Under this policy, the Company expenses fixed production overhead amounts in excess of amounts that would have been allocated to each unit of production at normal production levels. The Company expensed $25,157 in production costs during the nine month period ended September 30, 2015. There were no such costs in the prior year period.

Long-lived assets impairment considerations

Long-lived assets impairment considerations

As noted, the Company plans to idle production at the Millen, Georgia manufacturing facility during the fourth quarter of 2015. The Company does not necessarily assess temporarily idled assets for impairment unless events or circumstances indicate their carrying amounts might not be recoverable. Short-term stoppages of production for less than one year do not necessarily significantly impact the long-term expected cash flows of the idled facility. As of September 30, 2015, the Company did not assess the Millen plant for impairment. However, the Company continues to monitor market conditions closely and, during the fourth quarter of 2015, expects to collect additional information regarding customers’ 2016 drilling plans and budgets that could affect future production plans for the Company’s Millen, Georgia and other manufacturing facilities. Further deterioration of market conditions could result in impairment charges being taken on these and/or other long-lived assets, including the Company’s manufacturing plants, goodwill and intangible assets. The Company will evaluate long-lived assets for impairment at such time that events or circumstances indicate that carrying amounts might be impaired.