Restatement of Previously Issued Financial Statements

6 Months Ended

Feb. 28, 2013

Accounting Changes And Error Corrections [Abstract]

Restatement of Previously Issued Financial Statements

2—RESTATEMENT OF PREVIOUSLY ISSUED FINANCIAL STATEMENTS

The Company had previously recorded the proceeds from the sale of by-products from its Cedar Rapids, Iowa, manufacturing operations as a reduction of cost of sales. The Company believed that this accounting treatment was an acceptable accounting policy under accounting principles generally accepted in the United States. After several months of consultation and review with the Staff of the Securities and Exchange Commission (“SEC”), the Company and the Company’s Audit Committee concluded that the proceeds from the sale of by-products should be classified as sales rather than as a reduction of cost of sales in the Condensed Consolidated Statements of Operations.

As a result of the above, the Company restated the amounts of sales and cost of sales as previously reported.

• Condensed Consolidated Statements of Operations – increased consolidated sales and increased cost of sales for the three- and six-month periods ended February 28, 2013 and February 29, 2012

• Note 11 – Segment Reporting – increased consolidated and Industrial Ingredients segment sales for the three- and six-month periods ended February 28, 2013 and February 29, 2012

The adjustments to sales and cost of sales shown below affect the amounts previously reported for the Company’s consolidated sales and cost of sales and the sales of the Company’s Industrial Ingredients segment as previously reflected in the segment footnote. The following is a reconciliation of sales and cost of sales as previously reported to the restated amounts. The adjustments do not affect the Company’s previously reported gross margin, income (loss) from operations, net income (loss) or earnings (loss) per share in the Condensed Consolidated Statements of Operations for the three- and six-month periods ended February 28, 2013 and February 29, 2012 or to any items reported in the Condensed Consolidated Balance Sheets or the Condensed Consolidated Statements of Comprehensive Income (Loss) or Cash Flows.

	As Previously Reported		Adjustment		As Restated
	(Dollars in thousands)
Quarter Ended February 28, 2013
Consolidated sales	$	89,037	$	21,045	$	110,082
Consolidated cost of sales		78,036		21,045		99,081
Industrial Ingredient sales		62,433		21,045		83,478
Quarter Ended February 29, 2012
Consolidated sales	$	86,188	$	17,289	$	103,477
Consolidated cost of sales		76,787		17,289		94,076
Industrial Ingredient sales		61,284		17,289		78,573
Six Months Ended February 28, 2013
Consolidated sales	$	183,896	$	44,208	$	228,104
Consolidated cost of sales		159,637		44,208		203,845
Industrial Ingredient sales		129,638		44,208		173,846
Six Months Ended February 29, 2012
Consolidated sales	$	176,934	$	34,711	$	211,645
Consolidated cost of sales		155,725		34,711		190,436
Industrial Ingredient sales		126,106		34,711		160,817

In addition to the amounts restated above, the Company has also corrected an error in the consolidated statements of cash flows to properly classify proceeds and payments related to a short term financing arrangement as a financing activity rather than as an operating activity. The net amount of proceeds and repayments previously reflected as a “Change in operating assets and liabilities – accounts payable and accrued liabilities” of $(893,000) and $(253,000) for the six months ended February 28, 2013 and February 29, 2012, respectively, have been corrected within financing activities at their appropriate gross amounts of proceeds and payments for each respective period.