Hanger Inc. has announced it will restate a number of previously issued statements containing unaudited interim financial information due to errors identified in the statements.
Restatements will be released for the quarterly periods ended March 31, 2014, March 31, 2013, Sept. 30, 2013, Dec. 31, 2013 and March 31, 2013, as well as the year-to-date periods ended June 30, 2014, June 30, 2013, Sept. 30, 2013 and June 30, 2012. Investors should no longer rely on Hanger’s previously released financial information for these periods or any of the press releases or shareholder communications related to that information, according to a company press release.
A list of identified errors including their estimated impact on pre-tax income is included in the company’s current report on Form 8-K, filed Feb. 17 and available on Hanger’s website.
The errors fall into the following general categories, according to the release: cost of materials; education fair; depreciation; lease accounting; and other recurring and non-recurring errors.
Additionally, the company’s board of directors has concluded that Hanger’s internal control over financial reporting contained material weaknesses in addition to those that have been previously reported, relating to the design and operation of effective controls over leases, billing data and invoice controls and accounts receivable allowances. These weaknesses show “that the company did not have appropriate accounting resources to meet its financial reporting requirements,” according to the release.
Hanger has hired and appointed a new chief financial offer, a new chief accounting officer and a new corporate controller as well as adding “significant additional accounting resources and professionals,” according to the release, and is in the process of remediating its material weaknesses.
The company will be unable to file its quarterly report for the quarter ended Sept. 30, 2014 or its annual report for 2014 until it finalizes its lease accounting for the third quarter and prior periods, as well as completed and filed amendments to prior reports.