West Marine, the Watsonville-based boating supply retailer, reported today that the Securities and Exchange Commission approved a final settlement of the federal agency’s investigation into certain of the company’s accounting practices.
The SEC alleged today in a complaint filed in a federal court in San Jose that Read the rest of this entry »
West Marine, the boating supply retailer, received a “Wells Notice” from the Securities and Exchange Commission Monday saying that the federal regulatory agency’s staff intends to recommend that a civil action be brought against the Watsonville company related to an SEC investigation into its accounting for inventory in its 2003 fiscal year.
Those actions sometimes include recommendations that current or former employees Read the rest of this entry »
West Marine, the Watsonville supplier of boating equipment that is under formal investigation by the SEC, said that its chief accounting officer and avid sailor, Peter Van Handel will “leave West Marine effective today.”
Last May, West Marine completed a restatement of financial results for fiscal years 2002 through 2005 and for the first three quarters of fiscal year 2006 related to inventory issues. The SEC initiated an informal review of the matter in August and raised it to a “formal order of investigation” in January.
Last month, a former hourly employee at West Marine filed a lawsuit in California Superior Court in Orange County alleging “among other things, that (West Marine) failed to provide meal and rest periods, correct itemized statements, pay to discharged associates,” along with other allegedly unfair business practices, according to West Marine’s annual financial filing with the SEC.
West Marine, the troubled retailer of boating supplies headquartered in Watsonville, postponed its earnings release scheduled for Monday, according to a press release it sent out Friday afternoon.
The company said the delay was a result of “management’s continuing analysis of
certain current and historical expense accruals.”
As we wrote in a previous post, West Marine was told by the SEC on Jan. 14 that the agency was formalizing its inquiry begun in August into facts surrounding West Marine’s restatement of financial results. Last May, West Marine completed a restatement financial results for fiscal years 2002 through 2005 and for the first three quarters of fiscal year 2006 related to inventory issues.
West Marine received notification from the SEC Jan. 14 that the agency’s informal inquiry begun in August into facts surrounding West Marine’s restatement of financial results “will continue under a formal order of investigation,” according to an 8-K filing Wednesday.
In May, West Marine completed a restatement financial results for fiscal years 2002 through 2005 and for the first three quarters of fiscal year 2006 related to inventory issues.
The SEC’s original informal inquiry began in August, and West Marine provided materials about the restatement to the agency in October, when we first flagged the news. The SEC staff then requested “additional materials relating to our inventory accounting practices from 2001 to 2006, among other things.”
West Marine shares are down 18 percent so far this year after losing nearly half their
value in 2007, as the company struggles with declining year-over-year sales for the past four quarters.
Those pesky regulators are at it again.
This time, their victim is West Marine (ticker:WMAR), the Watsonville-based maker of boating supplies. The company had already disclosed that it was restating several years worth of earnings thanks to some accounting, er, issues.
But in an 8-K filed on Thursday, West Marine said that the U.S. Securities and Exchange Commission began an informal inquiry back in August into that restatement. The company turned over a pile of documents to the SEC in October.
How bad could this be? West Marine admittedly has no idea. But it can say that it will be costly, and a royal pain in the rump:
“We expect the inquiry to affect our results of operations and, in particular, our selling, general and administrative expense line item as we incur significant costs to, among other things, respond to the staff’s requests. Such costs will be incurred on an ongoing basis as the staff conducts its informal inquiry. However, the outcome of this matter cannot be predicted at this time, and consequently, we cannot estimate the impact on subsequent quarters that the costs associated with this SEC informal inquiry will have on our results of operations.”
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