Restatement of Previously Issued Financial Statements

As previously disclosed, the Company determined that for certain contracts within its Energy Segment for which revenue was historically recognized upon contract completion and transfer of title, the Company instead should have applied the percentage-of-completion method in accordance with the FASB’s Accounting Standards Codification No. 605-35, Construction-Type and Production-Type Contracts. In general, the percentage-of-completion method results in a revenue recognition pattern over time as a project progresses as opposed to deferring revenues until contract completion.

The Company concluded that the impact of applying the percentage-of-completion method to its revenue contracts was materially different from its previously reported results under its historical practice. As a result, the Company is restating its condensed consolidated financial statements for the periods impacted. The following financial tables reconcile the previously reported amounts to the restated amounts for each condensed consolidated financial statement.

The table below sets forth the condensed consolidated balance sheet, including the balances originally reported, corrections and the as restated balances for each restated period (in thousands):



	May 31, 2017
	As Reported		Correction			As Restated
Assets
Inventories - net	$	131,187	$	(30,161	)	$	101,026
Costs and estimated earnings in excess of billings on uncompleted contracts	27,295		29,903			57,198
Total current assets	325,744		(258		)	325,486
Total assets	$	1,004,998	$	(258	)	$	1,004,740
Liabilities and Shareholders’ Equity
Other accrued liabilities	$	22,067	$	3,308		$	25,375
Customer deposits	23,629		(21,918		)	1,711
Billings in excess of costs and estimated earnings on uncompleted contracts	7,898		14,641			22,539
Total current liabilities	130,699		(3,969		)	126,730
Deferred income tax liabilities	52,431		1,392			53,823
Total liabilities	468,608		(2,577		)	466,031
Shareholders’ equity:
Retained earnings	503,847		2,319			506,166
Total shareholders’ equity	536,390		2,319			538,709
Total liabilities and shareholders' equity	$	1,004,998	$	(258	)	$	1,004,740

The table below sets forth the condensed consolidated statements of income, including the balances originally reported, corrections and the as restated balances for each restated period (in thousands, except per share data):



	Three Months Ended May 31,
	2017							2016
	As Reported		Correction			As Restated		As Reported		Correction		As Restated
Net Sales	$	208,551	$	(3,268	)	$	205,283	$	242,667	$	7,699	$	250,366
Cost of Sales	159,285		(1,384		)	157,901		179,340		5,898		185,238
Gross Profit	49,266		(1,884		)	47,382		63,327		1,801		65,128

Operating Income	21,907		(1,884		)	20,023		34,508		1,801		36,309

Income Before Income Taxes	18,732		(1,884		)	16,848		30,815		1,801		32,616
Income Tax Expense	5,492		(706		)	4,786		9,752		675		10,427
Net Income	$	13,240	$	(1,178	)	$	12,062	$	21,063	$	1,126	$	22,189
Earnings Per Common Share
Basic Earnings Per Share	$	0.51	$	(0.05	)	$	0.46	$	0.81	$	0.05	$	0.86
Diluted Earnings Per Share	$	0.51	$	(0.05	)	$	0.46	$	0.81	$	0.04	$	0.85

The table below sets forth the condensed consolidated statements of comprehensive income, including the balances originally reported, corrections and the as restated balances for each restated period (in thousands):



	Three Months Ended May 31,
	2017							2016
	As Reported		Correction			As Restated		As Reported		Correction		As Restated
Net Income	$	13,240	$	(1,178	)	$	12,062	$	21,063	$	1,126	$	22,189
Comprehensive Income	12,229		(1,178		)	11,051		23,528		1,126		24,654

The table below sets forth the condensed consolidated statements of cash flows from operating activities, including the balances originally reported, corrections and the as restated balances for each restated period (in thousands):



	Three Months Ended May 31,
	2017									2016
	As Reported			Correction			As Restated			As Reported			Correction			As Restated
Cash flows from operating activities:
Net income	$	13,240		$	(1,178	)	$	12,062		$	21,063		$	1,126		$	22,189
Deferred income taxes	967			(706		)	261			2,155			675			2,830
Inventories	(7,936		)	960			(6,976		)	(5,547		)	6,678			1,131
Net change in billings related to costs and estimated earnings on uncompleted contracts	(10,725		)	5,785			(4,940		)	5,447			(5,376		)	71
Other accrued liabilities and income taxes payable	(1,927		)	(4,861		)	(6,788		)	(9,134		)	(3,103		)	(12,237		)
Net cash (used in) provided by operating activities:	$	(15,804	)	$	—		$	(15,804	)	$	9,868		$	—		$	9,868

The restatement had no impact on cash flows from investing activities or financing activities.

The table below sets forth the condensed consolidated statement of shareholders' equity, including the balances originally reported, corrections and the as restated balances for each restated period (in thousands):



	Retained Earnings		Total Stockholders' Equity
Balance at May 31, 2017, as reported	$	503,847	$	536,390
Correction	2,319		2,319
Balance at May 31, 2017, as restated	$	506,166	$	538,709

In addition to the restated consolidated financial statements, the information contained in Notes 3 and 5 has been restated.