Note 3—RESTATEMENTS AND REVISIONS:

As disclosed in the Company’s Quarterly Report on Form 10-Q for the quarterly period ended September 30, 2013 as filed with the SEC on November 12, 2013, the Company revised its Condensed Consolidated Financial Statements for the three months ended March 31, 2013 for computational errors in the calculation of revenues and cost of sales on contracts requiring the application of the percentage-of-completion revenue recognition methodology under ASC 605-35 and opening balance sheet corrections related to deferred taxes and goodwill associated with its acquisition of RTI Remmele Engineering. In the Annual Report, the Company subsequently restated its Condensed Consolidated Financial Statements for the three months ended March 31, 2013 to establish a full valuation allowance against its Canadian net deferred tax asset, and correct the related provision for income taxes. The following tables set forth the impact of the revision and restatement, as well as adjustments for the presentation of RTI Connecticut as a discontinued operation, on the Condensed Consolidated Statement of Operations and the Condensed Consolidated Statement of Cash Flows as filed in the Company’s Amended Quarterly Report on Form 10-Q/A for the period ended March 31, 2013 as filed with the SEC on September 24, 2013.

Condensed Consolidated Statement of Operations:


	Three Months Ended March 31, 2013
	Previously Reported (1)			Revision Adjustment (2)			As Revised			Restatement Adjustment			As Corrected			Discontinued Operations			Currently Reported
Net sales	$	191,900		$	(662	)	$	191,238		$	—		$	191,238		$	(2,036	)	$	189,202
Cost and expenses:
Cost of sales		151,986			(26	)		151,960			—			151,960			(2,011	)		149,949
Selling, general, and administrative expenses		24,908			—			24,908			—			24,908			(303	)		24,605
Research, technical, and product development expenses		1,001			—			1,001			—			1,001			—			1,001

Operating income		14,005			(636	)		13,369			—			13,369			278			13,647
Other income, net		559			—			559			—			559			—			559
Interest income		31			—			31			—			31			—			31
Interest expense		(4,796	)		—			(4,796	)		—			(4,796	)		—			(4,796	)

Income before income taxes		9,799			(636	)		9,163			—			9,163			278			9,441
Provision for income taxes		2,982			(178	)		2,804			1,625			4,429			44			4,473

Net income attributable to continuing operations		6,817			(458	)		6,359			(1,625	)		4,734			234			4,968
Net income (loss) attributable to discontinued operations, net of tax		151			—			151			—			151			(234	)		(83	)

Net income	$	6,968		$	(458	)	$	6,510		$	(1,625	)	$	4,885		$	—		$	4,885

Earnings per share attributable to continuing operations:
Basic	$	0.22		$	(0.02	)	$	0.21		$	(0.05	)	$	0.16		$	0.01		$	0.16
Diluted	$	0.22		$	(0.02	)	$	0.21		$	(0.05	)	$	0.15		$	0.01		$	0.16
Earnings per share attributable to discontinued operations:
Basic	$	—		$	—		$	—		$	—		$	—		$	(0.01	)	$	—
Diluted	$	—		$	—		$	—		$	—		$	—		$	(0.01	)	$	—

(1):	Previously reported balances represent the amounts reported in the Condensed Consolidated Statement of Operations in the Company’s Amended Quarterly Report on Form 10-Q/A for the quarterly period ended March 31, 2013 as filed with the SEC on September 24, 2013.

(2):	Amounts presented as Revision Adjustment represent revisions for revenue recognition errors related to certain long-term projects as disclosed in the Company’s Quarterly Report on Form 10-Q for the quarterly period ended September 30, 2013 as filed with the SEC on November 12, 2013.

Condensed Consolidated Statement of Cash Flows:


	March 31, 2013
	Previously Reported (1)			Revision Adjustment (2)			Restatement Adjustment			Currently Reported
OPERATING ACTIVITIES:
Net income	$	6,968		$	(458	)	$	(1,625	)	$	4,885
Adjustment for non-cash items included in net income:
Depreciation and amortization		11,000			—			—			11,000
Asset and asset-related charges (income)		—			—			—			—
Goodwill impairments		484			—			—			484
Deferred income taxes		3,350			(178	)		1,625			4,797
Stock-based compensation		1,708			—			—			1,708
Excess tax benefits from stock-based compensation activity		(236	)		—			—			(236	)
(Gain) loss on sale of property, plant and equipment		—			—			—			—
Amortization of discount on long-term debt		2,562			—			—			2,562
Amortization of deferred financing costs		325			—			—			325
Other		(41	)		—			—			(41	)
Changes in assets and liabilities:
Receivables		(9,994	)		—			—			(9,994	)
Inventories		(26,091	)		111			—			(25,980	)
Accounts payable		(6,583	)		—			—			(6,583	)
Income taxes payable		416			—			—			416
Unearned revenue		(5,194	)		532			—			(4,662	)
Cost in excess of billings		(12	)		(7	)		—			(19	)
Liability for pension benefits		—			—			—			—
Other current assets and liabilities		(10,520	)		—			104			(10,416	)
Other assets and liabilities		1,135			—			(104	)		1,031

Cash provided by (used in) operating activities		(30,723	)		—			—			(30,723	)
INVESTING ACTIVITIES:
Acquisitions, net of cash required		—			—			—			—
Maturity/sale of investments		—			—			—			—
Capital expenditures		(9,160	)		—			—			(9,160	)
Purchase of investments		—			—			—			—
Proceeds from disposal of property, plant, and equipment		—			—			—			—

Cash provided by (used in) investing activities		(9,160	)		—			—			(9,160	)
FINANCING ACTIVITIES:
Proceeds from exercise of employee stock options		1,239			—			—			1,239
Excess tax benefits from stock-based compensation activity		236			—			—			236
Purchase of common stock held in treasury		(399	)		—			—			(399	)
Repayments on long-term debt		(220	)		—			—			(220	)

Cash provided by (used in) financing activities		856			—			—			856
Effect of exchange rate changes on cash and cash equivalents		(148	)		—			—			(148	)

Decrease in cash and cash equivalents		(39,175	)		—			—			(39,175	)
Cash and cash equivalents at beginning of period		97,190			—			—			97,190

Cash and cash equivalents at end of period	$	58,015		$	—		$	—		$	58,015

(1):

Previously reported balances represent the amounts reported in the Condensed Consolidated Statement of Cash Flows in the Company’s Amended Quarterly Report on Form 10-Q/A for the quarterly period ended March 31, 2013 as filed with the SEC on September 24, 2013. The previously reported changes in inventory, cost in excess of billings, and deferred revenue have been adjusted by $1,040, $(174), and $(866) to correct the prior presentation.

(2):

Amounts presented as Revision Adjustment represent revisions related to revenue recognition errors related to certain long-term projects, as well as adjustments to goodwill and deferred taxes related to the acquisition of Remmele in 2012, as disclosed in the Company’s Quarterly Report on Form 10-Q for the quarterly period ended September 30, 2013 as filed with the SEC on November 12, 2013.