CUDAHY, Wis., Aug. 27 /PRNewswire-FirstCall/ --
Ladish Co., Inc. (Nasdaq: LDSH) (http://www.ladishco.com) filed a Form 8-K
with the SEC at the close of business Monday announcing the decision of the
Company and its auditors, Deloitte & Touche LLP ("D&T") to terminate their
relationship. As disclosed in the Company's Form 10-Q for the second quarter
of 2002, dated August 24, 2002, the Company, the Audit Committee of its Board
of Directors and D&T have been unable to agree on the preferred accounting
treatment for net operating loss carryforwards.
At issue is the Company's practice of not recognizing as an asset the
deferred tax benefit resulting from net operating losses incurred in the early
1990's. The value of such a benefit would depend on the Company's ability to
generate offsetting taxable income before the operating losses expire under
the Internal Revenue Code. "Because our business is cyclical, we have felt
that leaving this asset off our balance sheet and recognizing the tax benefits
as utilized on an annual basis was the conservative approach," said Wayne E.
Larsen, Ladish CFO. "Our prior auditors felt that management's judgment as to
the likelihood of using all our NOLs in a given period was sufficient to
determine the proper accounting treatment."
Larsen said the effect of restatement would be to increase earnings for
certain past periods and reduce earnings in the same amount for current and
certain future periods. The actual amount of earnings shifted from period to
period would depend on the periods restated, and this, Larsen said, was what
D&T had not determined at the date the Company filed its second quarter 10-Q
report. As stated in that report, restatement for 2001 would result in an
increase in net earnings of $0.15 per share in 2001 and a decrease of $0.02
per share in the first six months of 2002. "Of course, none of this affects
our actual tax liability or, for that matter, any part of our cash flow," he
said. "We will have better information once our new auditors have looked at
the issue and determined, with the Audit Committee of the Board of Directors,
what if any restatements are necessary." He said he expected the Audit
Committee would follow the recommendation of the new auditing firm.
The Company is meeting with prospective new auditors and expects its Audit
Committee will chose the new auditing firm in the near term.
Ladish Co., Inc. is a leading producer of highly engineered, technically
advanced components for the jet engine, aerospace and general industrial
markets. Ladish is headquartered in Cudahy, Wisconsin with operations in
Wisconsin, Oregon and Connecticut. Ladish common stock trades on Nasdaq under
the symbol LDSH.
This release includes forward-looking statements that are made pursuant to
the safe harbor provisions of the Securities Litigation Reform Act of 1995.
Such forward-looking statements are subject to certain risks and uncertainties
that could cause actual results to differ materially from those projected in
them. These risks and uncertainties include, but are not limited to,
anticipated slowdowns in the company's major markets, the impact of
competition, the effectiveness of operational changes expected to increase
efficiency and productivity, worldwide economic and political conditions and
the effect of foreign currency fluctuations.
SOURCE Ladish Co., Inc.
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Related links:
http://www.ladishco.com
CONTACT:
Wayne E. Larsen of Ladish Co., Inc.,
+1-414-747-2935, or fax - +1-414-747-2890; or William J. Libby of
Libby Communications, +1-203-431-8480, or fax - +1-203-431-6132,
for Ladish Co., Inc.
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