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,

its consolidated statement of operations for the

three

and

six

months ended

September 30, 2017

and its consolidated statement of cash flows for the

six

months ended

September 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, Three Months Ended September 30, 2017
Cost of goods sold		24,700,540			(123,241	)		24,577,299
Income tax provision		146,981			37,946			184,927
Net earnings		310,039			85,295			395,334

Net earnings per share:
Basic		0.04			0.01			0.05
Diluted		0.04			0.01			0.05

Consolidated Statement of Operations, Six Months Ended September 30, 2017
Cost of goods sold		46,520,386			(403,128	)		46,117,258
Income tax provision		205,765			124,123			329,888
Net earnings		480,659			279,005			759,664

Net earnings per share:
Basic		0.07			0.04			0.11
Diluted		0.07			0.04			0.11

Consolidated Statement of Cash Flows, Six Months Ended September 30, 2017
Net earnings		480,659			279,005			759,664
Change in inventories		(5,224,616	)		(403,128	)		(5,627,744	)
Change in deferred income taxes		205,765			108,483			314,248
Change in income taxes payable		-			15,640			15,640

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

three

and

six

months ended

September 30, 2018:

	As Computed Under LIFO		As Computed Under Average Cost		Effect of Change

Consolidated Statement of Operations, Three Months Ended September 30, 2018
Earnings before income taxes		1,448,925		2,645,625		1,196,700
Income tax provision		353,190		644,709		291,519
Net earnings		1,095,735		2,000,916		905,181

Net earnings per share:
Basic		0.16		0.29		0.13
Diluted		0.16		0.29		0.13

Consolidated Statement of Operations, Six Months Ended September 30, 2018
Earnings before income taxes		3,549,365		7,408,138		3,858,773
Income tax provision		867,318		1,807,329		940,011
Net earnings		2,682,047		5,600,809		2,918,762

Net earnings per share:
Basic		0.38		0.80		0.42
Diluted		0.38		0.80		0.42