Restatement of Financial Statements

click here to download 2001 Annual Report pdf

During fiscal year 2001, FPI initiated a corrective action plan (CAP) to identify the factors that contributed to inventory costing errors in its fiscal year 2000 financial statements. As a result of executing the CAP, FPI became aware that because of inaccurate data within its recently implemented financial accounting system, SAP, as well as inconsistently applied inventory costing procedures, the amount of its reported fiscal year 2000 inventory and cost of sales required revision.

These revisions addressed the costing method of FPI’s finished sub-assembly and work-in-process components of inventory. At September 30, 2000, FPI was aware that costing errors of an undetermined amount existed in its inventory accounts, and initially recorded a provision of approximately $3,878,000 as part of its inventory allowance to account for such errors. However, upon execution of the CAP, FPI determined that an additional provision of $1,011,000 was needed to account for additional errors identified. Accordingly, the net loss previously reported has been adjusted by this amount, and the related financial statements have been restated.

Also, during FPI’s cost of sales analysis, it determined that certain reimbursable revenue accounts were improperly included within cost of sales. Accordingly, FPI has reclassified those revenue accounts for presentation and consistency purposes. The amount of the reclassification was approximately $3,440,000, which decreased cost of sales and decreased other income, net. This reclassification had no effect on total net loss.