BASIS OF PREPARATION AND PRESENTATION (Policies)

6 Months Ended

Jun. 30, 2017

BASIS OF PREPARATION AND PRESENTATION

The Company’s quarterly financial statements for each of the quarters included in its Form 10-Qs for the year ended December 31, 2016 contained an error related to the elimination of intercompany cost of sales. The error was corrected as of December 31, 2016, but since the adjustment was not material to any of the quarters the Form 10-Qs will not be amended. Management has determined the effects to be neither quantitatively or qualitatively material to the financial statements included in any of the Form 10-Qs filed during 2016.

The following table illustrates the correction of the error as shown in the statement of operations in Form 10-Q:

Year 2016	First Quarter		Second Quarter		Third Quarter
Net income as reported	$	2,127	$	2,942	$	2,520
Effect on cost of goods sold	228		251		301

Net income as revised	$	2,355	$	3,193	$	2,821

The following table illustrates the correction of the error as recorded in the Company’s financial statements during the fourth quarter 2016:

Year 2016	Fourth Quarter
Net income as recorded	$	1,489
Effect on cost of goods sold	(780		)

Net income as revised	$	709

The second quarter and year to date 2016 financial statements presented have been revised to reflect the error correction. The impact of the correction on basic and fully diluted earnings per share for the second quarter and year to date 2016 was an increase of $0.03 and $0.05, respectively.

Reclassifications

Certain items in the prior year’s consolidated financial statements and notes to consolidated financial statements have been reclassified to conform to the 2017 presentation.