Correction Of Immaterial Errors

3 Months Ended

Mar. 31, 2012

Correction Of Immaterial Errors [Abstract]

Correction Of Immaterial Errors

(2) CORRECTION OF IMMATERIAL ERRORS

In the second quarter of 2011, management discovered that the Company's customs broker used an incorrect duty rate for its detection products. Subsequently, the Company confirmed that the duty rates for its other products were correct. A Prior Disclosure document was filed with the U.S. Customs Service to correct the underpayment error. The cumulative adjustment for the incorrect duty rate, covering July 1, 2006 to June 30, 2011, approximated $1.5 million. The adjustment applicable to the three-month period ended March 31, 2011 was $36,000.

Pursuant to the guidance of Staff Accounting Bulletin ("SAB") No. 99, Materiality, the Company concluded that the errors were not material to any of its prior period financial statements. Although the errors were immaterial to prior periods, the prior period financial statements were revised, in accordance with SAB No. 108, Considering the Effects of Prior Year Misstatements when Quantifying Misstatements in Current Year Financial Statements, due to the significance of the out-of-period correction in the second quarter of 2011.

A reconciliation of the effects of the adjustments to the previously reported statement of operations for the three months ending March 31, 2011 follows:

	As Reported			Adjustment			As Adjusted
	(In Thousands, Except Per Share Amounts)
Cost of sales	$	16,567		$	36		$	16,603
Gross profit		5,872			(36	)		5,836
Loss from operations		(786	)		(36	)		(822	)
Net loss		(783	)		(36	)		(819	)
Net loss per share		(0.12	)		(0.01	)		(0.13	)

A reconciliation of the effects of the adjustments to the previously reported statement of cash flows for the three months ending March 31, 2011 follows:

	As Reported			Adjustment			As Adjusted
	(In Thousands)
Net loss	$	(783	)	$	(36	)	$	(819	)
Accounts payable		723			36			759