Restatement of the Condensed Consolidated Financial Statements (Tables)

9 Months Ended

Sep. 30, 2013

Text Block [Abstract]

Adjustments to Previously Filed Consolidated Statements of Operations

The results of the adjustments to the Company’s previously filed consolidated statements of operations detailed above for the three and nine months ended September 30, 2012 are summarized in the tables below. The tax effect of the adjustments is estimated based on the Company’s effective tax rate.

	Three Months Ended September 30, 2012
				Adjustments by Category
(U.S. Dollars, in thousands)	Previously Reported			Distributor Revenue			Inventory Reserves			Royalties			Other			Total Adjustments			Restated
Net sales	$	114,752		$	(6,422	)	$	—		$	—		$	(473	)	$	(6,895	)	$	107,857
Cost of sales		22,373			(265	)		123			2,018			135			2,011			24,384
Gross profit		92,379			(6,157	)		(123	)		(2,018	)		(608	)		(8,906	)		83,473
Operating expenses
Sales and marketing		49,298			(4,212	)		—			(2,018	)		(46	)		(6,276	)		43,022
General and administrative		13,850			—			—			—			—			—			13,850
Research and development		6,858			—			—			—			—			—			6,858
Amortization of intangibles assets		515			—			—			—			50			50			565
Charges related to U.S. Government resolutions		325			—			—			—			48			48			373
		70,846			(4,212	)		—			(2,018	)		52			(6,178	)		64,668
Operating income		21,533			(1,945	)		(123	)		—			(660	)		(2,728	)		18,805
Other income and (expense)		(1,485	)		—			—			—			—			—			(1,485	)
Income before income taxes		20,048			(1,945	)		(123	)		—			(660	)		(2,728	)		17,320
Income tax (expense)		(6,930	)		131			8			—			45			184			(6,746	)
Net income from continuing operations, net of tax	$	13,118		$	(1,814	)	$	(115	)	$	—		$	(615	)	$	(2,544	)	$	10,574

	Nine Months Ended September 30, 2012
				Adjustments by Category
(U.S. Dollars, in thousands)	Previously Reported			Distributor Revenue			Inventory Reserves			Royalties			Other			Total Adjustments			Restated
Net sales	$	350,286		$	(19,678	)	$	—		$	—		$	(392	)	$	(20,070	)	$	330,216
Cost of sales		67,989			(3,837	)		2,791			6,223			143			5,320			73,309
Gross profit		282,297			(15,841	)		(2,791	)		(6,223	)		(535	)		(25,390	)		256,907
Operating expenses
Sales and marketing		148,629			(5,156	)		—			(6,223	)		(25	)		(11,404	)		137,225
General and administrative		42,715			—			—			—			—			—			42,715
Research and development		23,160			—			—			—			—			—			23,160
Amortization of intangibles assets		1,575			—			—			—			150			150			1,725
Charges related to U.S. Government resolutions		1,689			—			—			—			(630	)		(630	)		1,059
		217,768			(5,156	)		—			(6,223	)		(505	)		(11,884	)		205,884
Operating income		64,529			(10,685	)		(2,791	)		—			(30	)		(13,506	)		51,023
Other income and (expense)		(4,942	)		—			—			—			—			—			(4,942	)
Income before income taxes		59,587			(10,685	)		(2,791	)		—			(30	)		(13,506	)		46,081
Income tax (expense)		(20,286	)		2,340			1,111			—			(205	)		3,246			(17,040	)
Net income from continuing operations, net of tax	$	39,301		$	(8,345	)	$	(1,680	)	$	—		$	(235	)	$	(10,260	)	$	29,041

Effects of Restatements on Consolidated Balance Sheet

The effects of the restatement on the Company’s condensed consolidated balance sheet as of December 31, 2012 are as follows:

	As of December 31, 2012
(Unaudited, U.S. Dollars, in thousands, except share data)	Previously Reported		Adjustments			Restated
Assets
Current assets:
Cash and cash equivalents	$	31,055	$	—		$	31,055
Restricted cash		21,314		—			21,314
Trade accounts receivable, less allowances of $13,543		150,316		(43,004	)		107,312
Inventories		88,744		(5,371	)		83,373
Deferred income taxes		16,959		16,491			33,450
Prepaid expenses and other current assets		32,056		2,023			34,079
Total current assets		340,444		(29,861	)		310,583
Property, plant and equipment, net		51,362		2,473			53,835
Patents and other intangible assets, net		6,880		410			7,290
Goodwill		74,388		—			74,388
Deferred income taxes		19,904		(1,023	)		18,881
Other long-term assets		11,303		(3,383	)		7,920
Total assets	$	504,281	$	(31,384	)	$	472,897
Liabilities and shareholders’ equity
Current liabilities:
Trade accounts payable	$	21,812		763		$	22,575
Other current liabilities		46,985		(7,375	)		39,610
Total current liabilities		68,797		(6,612	)		62,185
Long-term debt		20,000		—			20,000
Deferred income taxes		11,456		—			11,456
Other long-term liabilities		4,930		6,494			11,424
Total liabilities		105,183		(118	)		105,065
Contingencies (Note 16)
Shareholders’ equity:
Common shares $0.10 par value; 50,000,000 shares authorized; 19,339,329 issued and outstanding		1,934		—			1,934
Additional paid-in capital		246,111		195			246,306
Retained earnings		148,549		(33,702	)		114,847
Accumulated other comprehensive income		2,504		2,241			4,745
Total shareholders’ equity		399,098		(31,266	)		367,832
Total liabilities and shareholders’ equity	$	504,281	$	(31,384	)	$	472,897

Effects of Restatement of Consolidated Statement of Operations and Comprehensive Income (Loss)

The effects of the restatements on the Company’s condensed consolidated statement of operations and comprehensive income for the three months ended September 30, 2012 are as follows:

(Unaudited, U.S. Dollars, in thousands, except share and per share data)	Three Months Ended September 30, 2012
	Previously Reported			Adjustments			Restated
Product sales	$	103,111		$	(6,559	)	$	96,552
Marketing service fees		11,641			(336	)		11,305
Net sales		114,752			(6,895	)		107,857
Cost of sales		22,373			2,011			24,384
Gross profit		92,379			(8,906	)		83,473
Operating expenses
Sales and marketing		49,298			(6,276	)		43,022
General and administrative		13,850			—			13,850
Research and development		6,858			—			6,858
Amortization of intangible assets		515			50			565
Impairment of goodwill		—			—			—
Charges related to U.S. Government resolutions		325			48			373
		70,846			(6,178	)		64,668
Operating income		21,533			(2,728	)		18,805
Other income and expense
Interest expense, net		(464	)		—			(464	)
Other expense		(1,021	)		—			(1,021	)
		(1,485	)		—			(1,485	)
Income before income taxes		20,048			(2,728	)		17,320
Income tax expense		(6,930	)		184			(6,746	)
Net income from continuing operations, net of tax		13,118			(2,544	)		10,574
Discontinued operations (Note 15)
Gain on sale of Breg, Inc., net of tax		221			—			221
Loss from discontinued operations		(9,046	)		(2	)		(9,048	)
Income tax benefit		3,267			2			3,269
Net loss from discontinued operations, net of tax		(5,558	)		—			(5,558	)
Net income	$	7,560		$	(2,544	)	$	5,016
Net income (loss) per common share-basic:
Net income from continuing operations, net of tax	$	0.69		$	(0.14	)	$	0.55
Net loss from discontinued operations, net of tax		(0.29	)		—			(0.29	)
Net income per common share-basic	$	0.40		$	(0.14	)	$	0.26
Net income (loss) per common share-diluted:
Net income from continuing operations, net of tax	$	0.67		$	(0.13	)	$	0.54
Net loss from discontinued operations, net of tax		(0.28	)		(0.01	)		(0.29	)
Net income per common share-diluted	$	0.39		$	(0.14	)	$	0.25
Weighted average number of common shares:
Basic		19,078,590			—			19,078,590
Diluted		19,533,021			—			19,533,021
Comprehensive income	$	9,067		$	(2,627	)	$	6,440

The effects of the restatements on the Company’s condensed consolidated statement of operations and comprehensive income for the nine months ended September 30, 2012 are as follows:

(Unaudited, U.S. Dollars, in thousands, except share and per share data)	Nine Months Ended September 30, 2012
	Previously Reported			Adjustments			Restated
Product sales	$	315,837		$	(19,775	)	$	296,062
Marketing service fees		34,449			(295	)		34,154
Net sales		350,286			(20,070	)		330,216
Cost of sales		67,989			5,320			73,309
Gross profit		282,297			(25,390	)		256,907
Operating expenses
Sales and marketing		148,629			(11,404	)		137,225
General and administrative		42,715			—			42,715
Research and development		23,160			—			23,160
Amortization of intangible assets		1,575			150			1,725
Impairment of goodwill		—			—			—
Charges related to U.S. Government resolutions		1,689			(630	)		1,059
		217,768			(11,884	)		205,884
Operating income		64,529			(13,506	)		51,023
Other income and expense
Interest expense, net		(3,950	)		—			(3,950	)
Other expense		(992	)		—			(992	)
		(4,942	)		—			(4,942	)
Income before income taxes		59,587			(13,506	)		46,081
Income tax expense		(20,286	)		3,246			(17,040	)
Net income from continuing operations, net of tax		39,301			(10,260	)		29,041
Discontinued operations (Note 15)
Gain on sale of Breg, Inc., net of tax		1,261			—			1,261
Loss from discontinued operations		(15,398	)		1,024			(14,374	)
Income tax benefit		5,617			132			5,749
Net loss from discontinued operations, net of tax		(8,520	)		1,156			(7,364	)
Net income	$	30,781		$	(9,104	)	$	21,677
Net income (loss) per common share-basic:
Net income from continuing operations, net of tax	$	2.08		$	(0.54	)	$	1.54
Net loss from discontinued operations, net of tax		(0.45	)		0.06			(0.39	)
Net income per common share-basic	$	1.63		$	(0.48	)	$	1.15
Net income (loss) per common share-diluted:
Net income from continuing operations, net of tax	$	2.04		$	(0.53	)	$	1.51
Net loss from discontinued operations, net of tax		(0.45	)		0.07			(0.38	)
Net income per common share-diluted	$	1.59		$	(0.46	)	$	1.13
Weighted average number of common shares:
Basic		18,861,374			—			18,861,374
Diluted		19,300,263			—			19,300,263
Comprehensive income	$	30,615		$	(8,657	)	$	20,751