Oilgear to Restate Financials: Restatement Expected to Have No Significant Impact on 2005 Earnings or Current Financial Position
January 27 2006 - 5:39PM
Business Wire
The Oilgear Company (NASDAQ:OLGR) today announced that the company
will restate certain of its previously filed consolidated financial
statements. The restatements are not expected to significantly
affect the reported results of operations for 2005 or the company's
current financial position. As previously reported in the company's
Form 10-Q/A for the second quarter of 2005 and its Form 10-Q for
the third quarter of 2005, the company made an error in its
accounting for non-operating income resulting from the sale of
shares received in an insurance company demutualization. The
principal expected effect of this change will be to decrease net
earnings for 2004 by $188,000 and decrease the net loss for 2001 by
that amount. The company will file amendments to the Form 10-K for
the year ended December 31, 2004 and each of the Forms 10-Q for the
fiscal quarters ended March 31, 2005, June 30, 2005 and September
30, 2005, as soon as possible. The company does not expect that the
restatement process will delay the company's announcement of its
2005 results or the filing of its Annual Report on Form 10-K for
the year ended December 31, 2005. The company's decision to restate
its financial statements was made by Oilgear's Audit Committee. The
decision was based upon the recommendation of management, after
consultation with KPMG LLP, its independent registered public
accounting firm, and in connection with a review of the company's
most recent Form 10-K and certain of its 2005 Forms 10-Q filings by
the Division of Corporation Finance of the U.S. Securities and
Exchange Commission. The company also expects to make certain
reclassification adjustments to its historical consolidated
financial statements which will have no impact on the company's
current equity or financial position. In addition, the company will
make certain adjustments in its historical consolidated financial
statements that were not previously recorded because in each case
and in the aggregate the underlying errors were not considered
material to the company's consolidated financial statements.
Accordingly, the company's previously issued financial statements
should no longer be relied upon. In addition, while this news
release describes items for which the company has determined a
restatement is appropriate at this time, there can be no assurance
that further review of the company's financial statements will not
identify additional items that would lead to further changes. "We
will strive to complete our restated financial statements as
quickly as possible and put this unfortunate issue behind us," said
Oilgear President and CEO David Zuege. "The restatement will not
impact the operation of our ongoing business and, with the hard
work and dedication of our employees, we remain cautiously
optimistic about the outlook for 2006." A leader in the fluid power
industry, The Oilgear Company provides advanced technology in the
design and production of unique fluid power components and
electronic controls. The company serves customers in the primary
metals, machine tool, automobile, petroleum, construction
equipment, chemical, plastic, glass, lumber, rubber and food
industries. Its products are sold as individual components or
integrated into high performance applications. Certain matters
discussed in this press release are "forward-looking statements"
intended to qualify for the safe harbors from liability established
by the Private Securities Litigation Reform Act of 1995. These
forward-looking statements can generally be identified as such
because the context of the statement will include words such as the
Company "believes," "anticipates," "expects" or words of similar
import. Similarly, statements that describe the Company's future
plans, objectives or goals are also forward-looking statements.
Such forward-looking statements are subject to certain risks and
uncertainties which could cause actual results to differ materially
from those currently anticipated. In addition to the assumptions
and other factors referenced specifically in connection with such
statements, the following could impact the business and financial
prospects of the Company: factors affecting the economy generally,
including the financial and business conditions of the Company's
customers, the demand for customers' products and services that
utilize the Company's products, and national and international
events; factors affecting the Company's financial performance or
condition, including restrictions or conditions imposed by current
or prospective lenders, tax legislation, and changes in accounting
principles; factors affecting percentage of completion contracts,
including the accuracy of estimates and assumptions regarding the
timing and levels of costs to complete those contracts; factors
affecting the Company's international operations, including
fluctuations in currencies, changes in laws and political or
financial insecurity of foreign governments; factors affecting the
Company's ability to hire and retain competent employees, including
unionization of non-union employees and strikes or work stoppages;
any further decrease in stock price as a result of market
conditions; changes in the law or standards applicable to the
Company, including environmental laws and accounting
pronouncements; availability of raw materials; unanticipated
technological developments that result in competitive disadvantages
and may impair existing assets; and factors set forth in the
Company's periodic reports filed with the SEC in accordance with
the Securities Exchange Act. Shareholders, potential investors and
other readers are urged to consider these factors and those set
forth in the Company's filings with the SEC carefully in evaluating
the forward-looking statements. The forward-looking statements made
herein are only made as of the date of this press release and the
Company undertakes no obligation to publicly update such
forward-looking statements to reflect subsequent events or
circumstances.
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