NOTE B — CHANGE IN ACCOUNTING PRINCIPLE

Effective

April 1, 2018,

the Company changed its method for valuing prime coil inventory of the coil segment from the last-in,

first

-out (“LIFO”) method to the average cost method. The effects of the change in accounting principle from LIFO to average cost have been retrospectively applied to all prior periods presented in all sections of this quarterly report on Form

-Q. The Company believes the average cost method is preferable as it more closely resembles the physical flow of our inventory, it better matches revenues with expenses and it aligns with how we internally manage our business. As a result of the retrospective application of the change in accounting principle, certain financial statement line items in the Company’s consolidated balance sheet as of

March 31, 2018

and its consolidated statement of operations and consolidated statement of cash flows for the quarter ended

June 30, 2017

were adjusted as presented in the table below. In addition, retained earnings as of

April 1, 2017

increased

$4,418,318

as a result of the change in accounting principle.

	As Originally Reported			Effect of Change			As Adjusted
Consolidated Statement of Operations, Quarter Ended June 30, 2017
Cost of goods sold		21,819,846			(279,887	)		21,539,959
Income tax provision		58,784			86,177			144,961
Net earnings		170,620			193,710			364,330

Net earnings per share:
Basic		0.02			0.03			0.05
Diluted		0.02			0.03			0.05

Consolidated Statement of Cash Flows, Quarter Ended June 30, 2017
Net earnings		170,620			193,710			364,330
Change in inventories		(4,497,191	)		(279,887	)		(4,777,078	)
Change in deferred income taxes		58,784			86,177			144,961

Consolidated Balance Sheet, as of March 31, 2018
Inventories		38,039,332			7,290,102			45,329,434
Deferred income tax liability		103,198			1,768,968			1,872,166
Retained earnings		31,190,246			5,521,134			36,711,380

The following table shows the effect of the change in accounting principle from LIFO to average cost on the quarter ended

June 30, 2018:

	As Computed Under LIFO		As Computed Under Average Cost		Effect of Change
Consolidated Statement of Operations, Quarter Ended June 30, 2018
Earnings before income taxes		2,100,440		4,762,513		2,662,073
Income tax provision		514,128		1,162,620		648,492
Net earnings		1,586,312		3,599,893		2,013,581

Net earnings per share:
Basic		0.23		0.51		0.28
Diluted		0.23		0.51		0.28