UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C.  20549

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 or 15(d) of
the Securities Exchange Act of 1934

Date of Report (Date of earliest event reported): June 10, 2013

Arabian American Development Company
(Exact name of registrant as specified in its charter)

 
Delaware
(State or jurisdiction of
incorporation or organization)
1-33926
(Commission File Number)
75-1256622
(I.R.S. Employer
Identification No.)
 
1650 Hwy 6 S, Suite 190
Sugar Land, TX  77478
 (Address of principal executive offices)

(409) 385-8300
(Registrant’s telephone number, including area code)
 





 (Former Name or Former Address, if Changes Since Last Report)

Check the appropriate box below if the Form 8-K is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions):

o  Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
 
o  Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
 
o  Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
 
o  Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
 




 
 
 


 
Item 4.02.
Non-Reliance on Previously Issued Financial Statements or a Related Audit Report or Completed Interim Review
 

In June 2013 management received the U.S. GAAP 2012 financial statements of Al Masane Al Kobra Mining Co. (“AMAK”), a Saudi Arabian closed joint stock company, conducted under PCAOB audit standards by an Independent Registered Public Accounting Firm. Certain adjustments were recorded in connection with this audit. On June 10, 2013, we concluded that our 2012 consolidated financial statements require a restatement to reconcile the differences.  In addition we are amending our first quarter 2013 financial statements to incorporate AMAK’s first quarter results.

The Company originally recorded its equity in earnings of AMAK for the year ended December 31, 2012, based upon audited financial statements prepared in accordance with Saudi Arabian GAAP (“SA GAAP”). An analysis was conducted at that time to identify differences between SA GAAP and U.S. GAAP and adjustments were made; however, additional adjustments were discovered in connection with the completion of the PCAOB audit of AMAK as required by Rule 3-09 of Regulation S-X.  These differences relate to accelerated methods of amortization and depreciation required by SA GAAP and reversal of revenue that was earned in 2013 under U.S. GAAP.  There were also shifts between current and deferred income tax balances but there was no net effect to our consolidated financial statements.

Accordingly, the Company is restating its consolidated financial statements and other financial information for the year December 31, 2012, and electing to restate its consolidated financial statements for the quarter ending March 31, 2013.  We are in the process of amending the respective filings.
 
Members of the Audit Committee of the Company have discussed with the Company’s independent registered public accounting firm, BKM Sowan Horan,  LLP, the matters disclosed in this Current Report on Form 8-K pursuant to Item 4.02(a).

The effects of the 2012 restatement are as follows:

   
December 31, 2012
  
   
As Reported
    
As Restated
  
   
(thousands of dollars)
  
Consolidated Balance Sheets
            
Investment in AMAK
   $ 38,971     $ 37,894  
Total Assets
     121,453       120,376  
Retained Earnings
     36,428       35,351  
Total Arabian American Development Company Stockholders’ Equity
     83,020       81,943  
Total Equity
     83,309       82,232  
Total Liabilities and Equity
     121,453       120,376  

Consolidated Statements of Income
            
Equity in earnings (loss) of AMAK
   $ 866     $ (211 )
Income before income tax expense
     17,302       16,226  
Net income
     11,398       10,321  
Net income attributable to Arabian American Development Company
     11,398       10,321  
Net income per common share:
                
Basic earnings per share (dollars)
   $ 0.47     $ 0.43  
Diluted earnings per share (dollars)
   $ 0.46     $ 0.42  

             
Consolidated Statements of Comprehensive Income
            
Net Income
   $ 11,398     $ 10,321  
Comprehensive Income
     11,566       10,489  


 
 
 
 


   
December 31, 2012
  
   
As Reported
    
As Restated
  
   
(thousands of dollars)
  
Consolidated Statement of Stockholders’ Equity
            
Net Income
   $ 11,398     $ 10,321  
Retained Earnings
     36,428       35,351  
Total
     83,020       81,943  
Total Equity
     83,309       82,232  

Consolidated Statements of Cash Flows
            
Operating Activities
            
Net income attributable to Arabian American
  Development Company
   $ 11,398     $ 10,321  
Equity in (income) loss of AMAK
     (866 )     211  

 The effects of the first quarter 2013 restatement are as follows:

   
March 31, 2013
  
   
(unaudited)
  
   
As Reported
    
As Restated
  
   
(thousands of dollars)
  
Consolidated Balance Sheets
            
Investment in AMAK
   $ 46,769     $ 48,358  
Total Assets
     129,199       130,788  
Retained Earnings
     38,548       40,137  
Total Arabian American Development
   Company Stockholders’ Equity
     85,462       87,051  
Total Equity
     85,751       87,340  
Total Liabilities and Equity
     129,199       130,788  

Consolidated Statements of Income
            
Equity in earnings (loss) of AMAK
   $ 298     $ 2,964  
Total other income (expense)
     86       2,752  
Income before income taxes
     3,131       5,797  
Net income
     2,120       4,786  
Net income attributable to Arabian American
   Development Company
     2,120       4,786  
                 
Basic earnings per common share (dollars)
   $ 0.09     $ 0.20  
Diluted earnings per common share (dollars)
   $ 0.09     $ 0.19  

             
Consolidated Statements of Comprehensive Income
            
Net Income
   $ 2,120     $ 4,786  
Comprehensive Income
     2,175       4,841  

Consolidated Statement of Stockholders’ Equity
            
Net Income
   $ 2,120     $ 4,786  
Retained Earnings
     38,548       40,137  
Total
     85,462       87,051  
Total Equity
     85,571       87,340  

Consolidated Statements of Cash Flows
            
Operating Activities
            
Net income
   $ 2,120     $ 4,786  
Equity in (earnings) loss of AMAK
     (298 )     (2,964 )

 

 
 
 


 SIGNATURE
 
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
 
ARABIAN AMERICAN DEVELOPMENT COMPANY
 

Date:  June 10, 2013                                                                By: /s/ Connie Cook
                       Connie Cook
                                                                                      Chief Financial Officer