Hanger, Austin, Texas, announced that it will restate certain previously issued financial information. The restatement is due to errors identified in connection with the company’s previously disclosed implementation of new inventory valuation estimation methods, processes, and controls, and other previously disclosed errors. The restated financial periods will include the fiscal years ended December 31 of 2009, 2010, 2011, 2012, and 2013; all interim periods for 2012 and 2013; and the interim periods ended March 31 and June 30, 2014.
As previously disclosed in its Current Report on Form 8-K filed on March 23, the company implemented new inventory valuation estimation methods, processes, and controls in the fourth quarter of 2014 that resulted in a material difference in the carrying value of its inventories. Hanger said it has now preliminarily established the estimated impact of the inventory valuation adjustments on these prior periods, and due to the size of these adjustments, has determined them to be material errors requiring restatements. Additionally, the restatements will include other corrections of lease accounting errors and other errors previously disclosed in the company’s press release and Current Report on Form 8-K filed on February 17.
“Given the complexity of the inventory accounting issues and magnitude of the amounts involved, this has been one of the more demanding areas the company has had to address,” President and CEO Vinit Asar said. “While we recognize how difficult this period has been for our investors, we believe we are making significant progress in resolving the company’s financial reporting and accounting challenges.”
The decision to restate these prior periods was made by Hanger’s Audit Committee in consultation with management. Hanger said investors should no longer rely upon the company’s previously issued financial information for these periods and any press releases or other shareholder communications that relate to that information. Hanger further said it intends to file restated financial information as soon as practicable.
For additional detail regarding the inventory valuation, lease accounting, and other adjustments, visit the Hanger website news page to read the June 9 press release.
