delayed the filing of its quarterly report, which was due Tuesday, as a result of the decision by the board's audit committee to review the accounting for certain transactions.
In a press release, Visteon said that in the preparation of its first-quarter 10-Q filing, management identified errors in accruals for costs mainly associated with freight and material surcharges that relate to prior periods.
During the review, allegations of potential improper conduct by a former senior finance employee were raised. As a result of the allegations, the audit committee plans to engage outside accounting and legal advisers to further investigate, the company said.
Visteon, a supplier of parts to automakers, said it isn't able to determine whether it will need to restate prior periods. Therefore, Visteon can't determine the effects of all potential adjustments to its results for any particular period.
The company has been exploring options regarding its U.S. business that would involve restructuring its agreements with
, Visteon's former parent company.
Without "significant structural changes" to Visteon's U.S. operation, including an agreement with Ford that will allow it "to achieve a sustainable and competitive business model," the company believes that its cash flow from operations won't be sufficient to fund capital spending, debt maturities and other cash obligations in 2005. Visteon said it will need to incur additional debt.
Considering the upcoming expiration of a 364-day revolving credit facility in June, the company said it is studying financing alternatives. Given current market conditions, the company's financial performance and its credit ratings, any financing pact will likely require significantly more restrictive covenants and collateralization, Visteon said.