Common use of Change in Accounting Principle Clause in Contracts

Change in Accounting Principle. Effective October 1, 1995, the Company changed its method of accounting for its equity interest in Envirodyne. Since Envirodyne's financial statements are not available to the Company on a basis that would permit concurrent reporting, the Company began reporting its equity in Envirodyne's results of operations on a three-month delayed basis. The Company's financial statements for the quarter ended December 31, 1995 did not include the Company's equity interest in Envirodyne for the corresponding period. The change reduced previously reported income from continuing operations by $467,000 ($719,000 before tax), or $.02 per share, with a corresponding cumulative effect for the change in accounting principle of $467,000 in the quarter ended December 31, 1995. ▇▇▇▇▇▇ CORPORATION NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED) NOTE 2. CHANGE IN ACCOUNTING PRINCIPLE -- (CONTINUED) The following table reflects on a pro forma basis the effect of retroactively applying the new accounting principle (amounts in thousands, except per share amounts): YEARS ENDED SEPTEMBER 30, Net income......................................................... $6,555 $4,671 Net income per share............................................... $ 0.22 $ 0.15 Envirodyne's net loss reported in their Form 10-Q for the quarter ended September 26, 1996 but not yet recorded in ▇▇▇▇▇▇'▇ financial statements is $3,924,000, of which ▇▇▇▇▇▇'▇ interest is approximately $1,593,000. This loss, net of amortization of $310,000, will be recorded by the Company in its results of operations for the quarter ending December 31, 1996. NOTE 3. DISCONTINUED MARINE PROTEIN OPERATIONS SUBSEQUENTLY RETAINED In July 1994, ▇▇▇▇▇▇ announced that it intended to separate its marine protein operations from its energy-related businesses. In September 1994, the Board of Directors determined that the interests of ▇▇▇▇▇▇'▇ stockholders would best be served by a sale of the marine protein operations. This determination resulted in the restatement of the 1993 and 1992 consolidated financial statements to present the net assets and operating results of the marine protein operations as a discontinued operation. Additionally, based on preliminary offers received in 1994 to purchase the marine protein operations, the Company recorded an $8.9 million after-tax book loss in fiscal 1994 to reflect the estimated loss on disposition of the marine protein operations. On May 5, 1995, the Board of Directors decided to retain the marine protein operations. ▇▇▇▇▇▇ had previously announced that an agreement to sell its marine protein operations had been reached. However, the acquisition group failed to close the transaction and as a result, the marine protein net assets and results of operations and cash flows for all periods were reclassified from discontinued operations to continuing operations. Additionally, the $8.9 million after-tax book loss that was recorded in fiscal 1994 was reversed in fiscal 1995.