Business Context and Reporting Period
Company: Broadwind Energy, Inc.
Filing Type: Form 8-K (Current Report)
Date of Report: January 31, 2014
Subject: Non-reliance on previously issued financial statements for the quarters ended March 31, 2013, June 30, 2013, and September 30, 2013.
Key Financial Metrics and Material Changes
The filing does not provide current revenue, profit, cash flow, or debt figures. Instead, it discloses a material restatement of prior periods:
- Financial Error: Understatement of gross profits and income totaling approximately $800,000.
- Affected Segment: Towers and Weldments segment.
- Cause: Accounting personnel created reserves in a manner inconsistent with GAAP and company policies.
- Discovery: The inappropriate practice was discovered and discontinued in the fourth quarter of 2013.
- Additional Corrections: Minor unrecorded errors previously deemed insignificant will also be corrected.
Guidance, Outlook, and Management Commentary
Management Actions:
- The Audit Committee has initiated an independent investigation into the inappropriate accounting practices.
- A review is underway to determine additional steps to ensure future compliance with accounting policies.
- Discussions have been held with Grant Thornton LLP (former auditor) and KPMG LLP (current auditor).
Future Filings: The Company intends to file corrected results for the impacted periods in Forms 10-Q/A prior to the filing of the Annual Report on Form 10-K for the fiscal year ended December 31, 2013.
Investor Verification Checklist
- Verify the specific impact of the $800,000 understatement on the restated earnings per share for the 2013 quarters.
- Monitor the upcoming Form 10-Q/A filings for the corrected financial statements.
- Review the findings of the independent investigation regarding the scope of the accounting errors.
- Assess the implications of the change in independent registered public accounting firms (from Grant Thornton LLP to KPMG LLP).