Symmetry Medical Discloses Accounting Issues In U.K.
July 28, 2016 at 4:25 p.m.
By Jen [email protected]
Symmetry Medical Inc. is an independent provider of products to the orthopedic device industry and other medical markets worldwide. The company announced the investigation Friday.
The company's Sheffield U.K. facility reportedly is the only portion of the company affected by the audit.
An independent firm will review irregularities in the company's accounting practices. The firm reportedly overstated revenue of the English plant in 1999 and before Symmetry acquired the business in 2003.
From its initial review, management estimates that the overstatement of revenue and income before taxes for the 9-year period is about $12 million to $16 million. The impact to the financial statements of the company for the period subsequent to its acquisition of the Sheffield unit in June 2003 through 2007 has not been determined.
The employees at the Sheffield company, who are believed to be the primary players in the questionable activity, including the senior vice president for Europe, have either been suspended until the review is complete or are no longer with the company.
Based on the information reported by management to date, it may be necessary for the company to restate its financial statements for the periods leading up to the Sheffield, U.K., acquisition. Therefore, the company's historic financial statements for those periods are not considered reliable at this time.
As a result of the investigation, a default has occurred under the company's credit agreement. The bank has various ways to deal with the situation, and the company currently is working with the bank to remedy the situation.
"The audit committee has retained special legal counsel to advise it and to investigate these matters thoroughly," said Francis T. Nusspickel, chairman of the audit committee. "Our principal concern is to move quickly to determine what occurred and how it occurred and to ensure the integrity of our financial reporting and controls throughout the Symmetry organization."
Brian Moore, president and chief executive officer, said, "We are treating this matter with the utmost importance. I do want to stress that, based upon available information, we believe that this matter affects only the Sheffield, U.K., operating unit. Changes have been made to the Sheffield site management by the company, and I will assume interim responsibility for the Sheffield facility. We expect a new chief operating officer for Europe to be in place by the end of the year who will be based at Sheffield and take over responsibility for this unit. While the situation is concerning, we expect to continue serving the needs of our customers with continuing operations from all of our worldwide units including Sheffield."[[In-content Ad]]
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Symmetry Medical Inc. is an independent provider of products to the orthopedic device industry and other medical markets worldwide. The company announced the investigation Friday.
The company's Sheffield U.K. facility reportedly is the only portion of the company affected by the audit.
An independent firm will review irregularities in the company's accounting practices. The firm reportedly overstated revenue of the English plant in 1999 and before Symmetry acquired the business in 2003.
From its initial review, management estimates that the overstatement of revenue and income before taxes for the 9-year period is about $12 million to $16 million. The impact to the financial statements of the company for the period subsequent to its acquisition of the Sheffield unit in June 2003 through 2007 has not been determined.
The employees at the Sheffield company, who are believed to be the primary players in the questionable activity, including the senior vice president for Europe, have either been suspended until the review is complete or are no longer with the company.
Based on the information reported by management to date, it may be necessary for the company to restate its financial statements for the periods leading up to the Sheffield, U.K., acquisition. Therefore, the company's historic financial statements for those periods are not considered reliable at this time.
As a result of the investigation, a default has occurred under the company's credit agreement. The bank has various ways to deal with the situation, and the company currently is working with the bank to remedy the situation.
"The audit committee has retained special legal counsel to advise it and to investigate these matters thoroughly," said Francis T. Nusspickel, chairman of the audit committee. "Our principal concern is to move quickly to determine what occurred and how it occurred and to ensure the integrity of our financial reporting and controls throughout the Symmetry organization."
Brian Moore, president and chief executive officer, said, "We are treating this matter with the utmost importance. I do want to stress that, based upon available information, we believe that this matter affects only the Sheffield, U.K., operating unit. Changes have been made to the Sheffield site management by the company, and I will assume interim responsibility for the Sheffield facility. We expect a new chief operating officer for Europe to be in place by the end of the year who will be based at Sheffield and take over responsibility for this unit. While the situation is concerning, we expect to continue serving the needs of our customers with continuing operations from all of our worldwide units including Sheffield."[[In-content Ad]]
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