KV Pharmaceutical Company Completes Unaudited Fiscal 2007 Results; Receives Trading Extension...() - (211) Le...),Health

Less: Treasury stock (53,904) - (53,904)

Total shareholders' equity 309,275 (6,276) 302,999

Total liabilities and

shareholders' equity $618,013 $1,300 $619,313

(a) Adjustment for accrued interest associated with certain expected tax

refunds.

(b) Adjustment for stock-based compensation expense pursuant to APB 25

($15,632) and income tax impact associated with stock-based

compensation expense pursuant to APB 25 ($1,658), partially offset by

net effect of tax benefit realized in accrued taxes ($2,432) and

excess tax benefit reflected in paid-in capital ($2,094).

(c) Adjustment for payroll taxes, interest and penalties associated with

stock-based compensation expense ($3,278) and the related income tax

benefit ($909).

(d) Adjustment for exercise deposits received by the Company for stock

options in the two-year forfeiture period ($1,916).

(e) Adjustment for additional liabilities associated with tax positions

claimed, partially offset by certain expected tax refunds ($5,407).

(f) Adjustment to record revenue and cost of sales when product is

received by the customer instead of shipping date for certain

customers (decrease in receivables of $1,175; increase in inventories

of $388; decrease in deferred tax assets of $125; decrease in accrued

liabilities of $414; and, decrease in retained earnings of $498).

(g) Adjustment for reduction in estimated liability associated with

employee medical claims incurred but not reported (decrease in

deferred tax assets of $66; decrease in accrued liabilities of $179;

and, increase in retained earnings of $113).

(3) The following table reconciles the Company's previously reported

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