Basis of Presentation (Policies)

6 Months Ended

Jun. 30, 2016

Basis of Presentation and Significant Accounting Policies [Abstract]

Use of Estimates

Use of Estimates

The preparation of financial statements in conformity with U.S. GAAP  requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Because these estimates and assumptions require significant judgment, actual results could differ from those estimates and could have a significant impact on our results of operations, financial position and cash flows. We reevaluate our estimates and assumptions as needed, but at a minimum on a quarterly basis. The most significant estimates include, but are not limited to, the allowance for doubtful accounts, inventory reserves, warranty accrual, worker's compensation accrual, medical insurance accrual, income taxes and share-based compensation. Actual results could differ materially from those estimates.

Recent Accounting Pronouncements

Recent Accounting Pronouncements

Changes to U.S. GAAP are established by the Financial Accounting Standards Board ("FASB") in the form of Accounting Standards Updates ("ASUs") to the FASB's Accounting Standards Codification.

We consider the applicability and impact of all ASUs. ASUs not listed below were assessed and determined to be either not applicable or are expected to have minimal impact on our consolidated financial statements and notes thereto.

In May 2014, the FASB issued ASU 2014-09, Revenue from Contracts with Customers, which requires an entity to recognize the amount of revenue to which it expects to be entitled for the transfer of promised goods or services to customers. The ASU will replace most existing revenue recognition guidance in U.S. GAAP when it becomes effective. In August 2015, with the issuance of ASU 2015-14, the FASB amended the effective date for us to January 1, 2018. The Company plans to adopt using the retrospective transition method. We are currently assessing how ASU 2014-09 will impact our consolidated financial statements and notes thereto.

In January 2016, the FASB issued ASU 2016-01, Recognition and Measurement of Financial Assets and Financial Liabilities, which will address certain aspects of recognition, measurement, presentation and disclosure of financial instruments. The ASU becomes effective in the annual reporting period beginning after December 31, 2017, including interim reporting periods. We do not expect ASU 2016-01 will have a material effect on our consolidated financial statements and notes thereto.

In March 2016, the FASB issued ASU 2016-09, Improvements to Employee Share-Based Payment Accounting, which makes several modifications to Topic 718. See further discussion in Note 11 of the Notes to the Consolidated Financial Statements.

In March 2016, the FASB issued ASU 2016-08, Principal versus Agent Considerations (Reporting Revenue Gross versus Net), which provides implementation guidance for Topic 606 on principal versus agent considerations. The effective date and transition requirements for the ASU are the same as ASU 2014-09. We are currently assessing how ASU 2016-08 will impact our consolidated financial statements and notes thereto.

In April 2016, the FASB issued ASU 2016-10, Identifying Performance Obligations and Licensing, which provides clarification for two aspects of Topic 606: identifying performance obligations and the licensing implementation guidance. The effective date and transition requirements for the ASU are the same as ASU 2014-09. We are currently assessing how ASU 2016-10 will impact our consolidated financial statements and notes thereto.

In May 2016, the FASB issued ASU 2016-12, Revenue from Contracts with Customers, which further amends Topic 606. The effective date and transition requirements for the ASU are the same as ASU 2014-09. We are currently assessing how ASU 2016-12 will impact our consolidated financial statements and notes thereto.

In March 2016, the FASB issued ASU 2016-09, Improvements to Employee Share-Based Payment Accounting, which makes several modifications to Topic 718 including: accounting for excess tax benefits and deficiencies; classifying excess tax benefits on the statement of cash flows; accounting for forfeitures; classifying awards that permit share repurchases to satisfy statutory tax-withholding requirement; and classifying tax payments on behalf of employees on the statement of cash flows. The ASU becomes effective for interim and annual reporting periods beginning after December 31, 2016. We intend to early adopt the ASU effective July 1, 2016.

The impact of adopting this ASU may be material. The Company cannot predict the impact as it is dependent of the Company’s stock price in the future, the timing of when restricted stock vests and the timing of when employees choose to exercise stock options. The changes for excess tax benefits and tax deficiencies will be applied prospectively. These changes will require the Company to report excess tax benefits and tax deficiencies as an income tax benefit or expense on the income statement rather than as a component of additional paid-in capital as it does now. Excess tax benefits and deficiencies will be treated as discrete items to the tax provision in the reporting period in which they occur.

Additionally, ASU 2016-09 will impact the calculation of diluted weighted average shares under the treasury stock method as the Company will no longer increase or decrease the assumed proceeds from an employee vesting in, or exercising, a share-based payment award by the amount of excess tax benefits or deficiencies taken to additional paid-in capital.

The Company plans to retrospectively apply the guidance for classification of the excess tax benefits in the statement of cash flows. The excess tax benefits are classified currently as both a cash inflow from financing activities and a cash outflow from operating activities in the statement of cash flows. Upon adoption, these will be classified as cash flows in operating activities as part of cash payments for taxes. The Company does not believe this change will have a material impact on the prior periods in the consolidated statement of cash flows.

The Company currently applies a forfeiture rate to its share-based compensation expense and adjusts expense to actual as awards vest and/or are forfeited. Upon adoption of ASU 2016-09, the Company will account for forfeitures as they occur, rather than estimating forfeitures as of an award's grant date. This change in accounting policy election will be adopted using a modified retrospective transition method and the Company will recognize a cumulative-effect adjustment to retained earnings of approximately $150,000.

The Company plans to retrospectively apply the guidance for classification of tax payments on employee’s behalf to classify these payments as cash outflows from financing activities. This is not expected to have a material impact of the consolidated statement of cash flows.