PPG Gets Filing Extension
Global coatings company PPG (Pittsburgh) announced nearly two weeks ago that it filed for an extension with the U.S. Securities and Exchange Commisision for its first-quarter financial report for 2018. More recently, the company confirmed it has been granted an additional six months to file.
PPG announced earlier that it filed for the extension because it was unable to submit its report after discovering improper accounting practices stretching back to 2017. It was unable to submit its Form 10-Q, for its Q1 report, by the May 10 deadline.
On Monday (May 22), PPG confirmed that the New York Stock Exchange informed the company that, because of its Q1 filing delay, it was not in compliance with Section 802.01E of the NYSE Listed Company Manual. PPG noted that such notices are routine in this situation.
The NYSE also informed PPG that it now has six months from the original May 10 deadline to file the Form 10-Q with the SEC, at which time the company would regain its compliance.
The company did file a Form 12b-25 filed with the SEC on May 10, disclosing that its audit committee of its board of directors is overseeing an investigation into the recent accounting discrepancies.
“The Company continues to work diligently to complete the investigation but is currently unable to predict the timing or outcome of the investigation,” PPG said in the statement. “Since the Company is not able to complete its Form 10-Q while the investigation is ongoing, it is unable to predict the timing of when it will file its Quarterly Report on Form 10-Q.”
Also in its initial announcement of the improper accounting discovery, PPG revealed that it terminated its former vice president and controller.
PPG did not name the official who was fired in its press release, but said that the controller had been placed on leave on April 25 and was officially terminated May 10. At the time, the company’s website identified Mark C. Kelly as vice president and controller, and reports, including one from the Pittsburgh Post-Gazette, identified Kelly as the terminated employee.
Two other employees who reported to Kelly have been reassigned in the wake of the accounting problems, according to PPG; some employees working under the controller made improper entries at his direction, the company said.
According to PPG’s statement, the initial findings involved a failure to record amortization expenses, understatement of a health insurance accrued liability and failure to record an adjustment increasing the value of inventory during 2018 Q1, which ended March 31.
Beyond the discrepancies in the first quarter of 2018, PPG says its investigation found further issues with accounting in 2017, and as a result, quarterly reports and the company’s annual report for 2017 “should no longer be relied upon.”