General Cable Reports Third Quarter Results; Adjusted EPS Of $0.60 Within Management’s Range Of Expectations; Operating Income Of $75.4 Million Exceeded Management’s Range Of Expectations; Announces Agreement To Acquire Prestolite Wire, LLC
On October 26, 2012, the Audit Committee of the Company’s Board of Directors, upon the recommendation of the Company’s executive officers, concluded that due to these inventory related accounting errors within the Company’s ROW segment in two countries as described above, the Company’s previously issued consolidated financial statements for fiscal years 2009 through 2011 and the related reports of its independent registered public accounting firm, the interim periods during those years, and the financial statements as of, and for the periods ended March 30, 2012 and June 29, 2012 should no longer be relied upon.
Based on preliminary information relating to these errors, the Company currently estimates that it understated cost of sales for the years ended December 31, 2011, 2010, 2009, and 2008, and for the three months ended March 30, 2012 and six months ended June 29, 2012, by $17.3 million, $5.7 million, $8.6 million, $6.2 million, $1.2 million, and $3.5 million, respectively. The Company currently estimates that it overstated inventory balances as of December 31, 2011, 2010, 2009 and 2008, March 30, 2012 and June 29, 2012, by $39.0 million, $26.6 million, $19.5 million, $8.0 million, $41.1 million and $39.8 million, respectively. The understated goodwill and overstated inventory associated with the acquisition of PDIC in the fourth quarter of 2007 are each currently estimated at $3.4 million. The Company continues to analyze the impact of these inventory accounting related errors on its prior financial statements. Management’s foregoing estimates are based solely on current preliminary data and are subject to change upon completion of its internal review of the Company’s prior financial statements. During the ongoing process of preparing restated financial statements, if it is determined that there are other adjustments for these periods, the Company will include such corrections in its restated financial statements.
The Company intends to correct the effect of the accounting errors described above on previously issued interim financial statements by restating the three and nine months ended September 30, 2011 that will be presented comparatively in its Quarterly Report on Form 10-Q for the period ended September 28, 2012 and amending previously filed Forms 10-Q for the periods ended June 29, 2012 and March 30, 2012. Contemporaneous with the filing of the above referenced Quarterly Reports, the Company also intends to file an Annual Report on Form 10-K/A to restate previously issued annual financial statements and related financial information contained therein as of December 31, 2011 and 2010 and the three year period then ended.
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