Unaudited Quarterly Consolidated Financial Information

The following table presents our operating results for each of the quarters in the years ended December 31, 2017 and 2016. The information for each of these quarters is unaudited, but has been prepared on the same basis as our audited consolidated financial statements appearing elsewhere in this Annual Report on Form 10-K. In the opinion of management, all necessary adjustments (consisting of normal recurring adjustments and retroactive adjustments in the fourth quarter of 2016) have been included that are required to state fairly our unaudited quarterly results when read in conjunction with our audited consolidated financial statements and the notes thereto appearing in this Annual Report on Form 10-K. These operating results are not necessarily indicative of the results for any future period.


	2017
(in thousands except per share data)	Q1		Q2		Q3		Q4
Revenue	$	228,691	$	247,047	$	248,359	$	269,163
Gross profit		123,530		127,252		127,458		128,216
Income from operations		8,143		7,991		7,397		4,016
Net income (loss)		4,787		2,759		3,454		(26,345	)
Net income (loss) per basic common share	$	0.10	$	0.06	$	0.07	$	(0.58	)
Net income (loss) per diluted common share	$	0.10	$	0.06	$	0.07	$	(0.58	)

	2016
(in thousands except per share data)	Q1		Q2		Q3		Q4
Revenue	$	234,133	$	245,650	$	245,575	$	266,707
Gross profit		118,397		125,047		125,194		139,527
Income from operations		6,969		11,709		9,410		27,731
Net income		2,103		5,235		17,662		19,949
Net income per basic common share	$	0.04	$	0.11	$	0.38	$	0.43
Net income per diluted common share	$	0.04	$	0.11	$	0.37	$	0.42

Income from operations decreased by $3.4 million during the quarter ended December 31, 2017, primarily because the estimated probability of achieving the Optitex earnout performance targets was increased, resulting in a $2.0 million increase in the related accrual during the quarter. Net loss during the quarter ended December 31, 2017, was further impacted by the $27.5 million tax charge related to the provisional estimate of the impact of the 2017 Tax Act as more fully explained in Note 11—Income Taxes.

We identified certain errors at our Italian manufacturing subsidiary attributable to the valuation and classification of certain finished goods inventory during the year ended December 31, 2017. These errors resulted in an understatement of operating expenses during the quarter ended December 31, 2016, due to failure to properly impair and expense certain items, properly classify certain amounts included in inventories on the balance sheet, and appropriately depreciate those amounts. As a result, we corrected the accompanying unaudited quarterly consolidated financial information for the fourth quarter of 2016. The impact to gross margin, income from operations, and net income for the three months ended December 31, 2016 for this correction is a decrease of $0.5, $0.7, and $0.6 million, respectively, from amounts previously reported of $140.0, $28.5, and $20.5 million, respectively. Net income per diluted common share decreased by $0.01 per share.