The Company adopted SFAS No. 142 effective January 1, 2002. The required adoption of SFAS No. 142 is considered a change in accounting principle and
the cumulative effect of adopting this standard resulted in a $1.6 million non-cash, after-tax charge in 2002. This charge had no effect on the Company’s
cash position or the balance of its outstanding indebtedness, and it did not have any impact on earnings from continuing operations in 2002. As previously
discussed, the Company recorded a non-cash gain from discontinued operations during 2001 related to the reversal of a reserve established when the
Company disposed of its natural gas operations in 1997. This gain had no effect on the Company’s cash position or the balance of its outstanding
indebtedness, and it did not have any impact on earnings from continuing operations in 2001.
The Company believes that its existing cash and cash equivalents, cash flows from operations and borrowings available under the Company’s Credit Facility,
supplemented, if necessary, with equity or debt financing, which the Company believes would be available, will be sufficient to fund the Company’s cash
requirements for at least the foreseeable future. 
Companies sometimes establish legal entities for a specific business transaction or activity in the form of a Variable Interest Entity (“VIE”). VIEs may be
used to facilitate off-balance sheet financing, acquire financial assets, raise cash from owned assets and similar transactions. The Company has no VIEs, no
off-balance sheet financing arrangements or any derivative financial instruments.
IMPACT OF INFLATION
The Company experiences the effects of inflation primarily in the prices it pays for labor, materials and services. Over the last three years, the Company has
experienced the effects of moderate inflation in these costs. At times, the Company has been able to offset a portion of these increased costs by increasing
the sales prices of its products. However, competitive pressures have not allowed for full recovery of these cost increases.
NEW ACCOUNTING PRONOUNCEMENTS
In December 2003, the Financial Accounting Standards Board (“FASB”) issued a revised SFAS No. 132, “Employers’ Disclosures about Pensions and Other
Postretirement Benefits.” The impact to the Company for this item is described in Note 1 of Notes to the Consolidated Financial Statements.
CRITICAL ACCOUNTING POLICIES
In the ordinary course of business, the Company makes estimates and assumptions relating to the reporting of results of operations and financial condition
in the preparation of its financial statements in conformity with accounting principles generally accepted in the United States of America. The Company
believes the following discussion addresses the Company's most critical accounting policies, which are those that are most important to the portrayal of
the Company's financial condition and results and require management's most difficult, subjective and complex judgments, often as a result of the need to
make estimates about the effect of matters that are inherently uncertain. Actual results could differ significantly from those estimates under different
assumptions and conditions.
The Company assesses the impairment of its long-lived identifiable assets, excluding goodwill which is tested for impairment pursuant to SFAS No. 142 as
explained below, whenever events or changes in circumstances indicate that the carrying value may not be recoverable. This review is based upon projections
of anticipated future cash flows. While the Company believes that its estimates of future cash flows are reasonable, different assumptions regarding such cash
flows or future changes in the Company’s business plan could materially affect its evaluations. No such changes are anticipated at this time.
The Company assesses goodwill for impairment pursuant to SFAS No. 142 which requires that goodwill be assessed whenever events or changes in