Correction of Accounting Error in Prior Period

6 Months Ended

Jun. 30, 2016

Correction of Accounting Error in Prior Period

Correction of Accounting Error in Prior Period

Note 2.  Correction of Accounting Error in Prior Period

Subsequent to March 31, 2016, but prior to filing this Form 10-Q for the quarter ended June 30, 2016, the Company discovered a cumulative error associated with the elimination of profits on sales of inventory to its subsidiaries.  This error had no impact upon the Company’s consolidated statement of operations or consolidated statement of cash flows subsequent to the year ended December 31, 2010.  The following financial statement line items reported in the Company’s consolidated balance sheets for the years ended December 31, 2015 and 2014 were affected by the correction of this accounting error:

(in thousands)	Previously Reported December 31, 2015			Adjusted December 31, 2015	Effect of Change
Inventory, net	$	115,904	$	109,408	$	(6,496)
Total current assets		236,453		229,957		(6,496)
Total assets		288,280		281,784		(6,496)
Accumulated deficit		(336,209)		(342,705)		(6,496)
Total stockholders' equity		190,260		183,764		(6,496)
Total liabilities and stockholders' equity	$	288,280	$	281,784	$	(6,496)
(in thousands)	Previously Reported December 31, 2014			Adjusted December 31, 2014	Effect of Change
Inventory, net	$	104,063	$	97,567	$	(6,496)
Total current assets		185,135		178,639		(6,496)
Total assets		227,654		221,158		(6,496)
Accumulated deficit		(350,887)		(357,383)		(6,496)
Total stockholders' equity		168,352		161,856		(6,496)
Total liabilities and stockholders' equity	$	227,654	$	221,158	$	(6,496)

This error was associated with transactions occurring prior to September 2010, at which time the Company revised its methodology to compute and eliminate intercompany profits. However, the Company failed to identify and record an entry to eliminate the cumulative error resulting from the prior methodology. This $6.5 million error resulted in an overstatement of inventory and a cumulative understatement of cost of product revenue as of September 2010.  Thereafter, the effect was an overstatement of inventory and understatement of accumulative deficit for each subsequent reporting period.  The consolidated balance sheets as of December 31, 2015 and 2014 have been revised to reflect the correction of the error through a decrease in inventory and an increase in accumulated deficit of $6.5 million.  In the opinion of management, the effect is not material to the consolidated financial position or results of operations for any previously reported period.  However, prior year amounts will be revised, as reflected above, in future filings.