Business Context and Reporting Period
Company: Comstock Resources, Inc.
Filing Type: Form 8-K (Current Report)
Date of Report: January 26, 2005
Subject: Announcement of a restatement of financial statements for the three and nine months ended September 30, 2004.
Key Financial Metrics
This filing does not provide specific revenue, profit, cash flow, margin, debt, or liquidity figures. The document serves as a notice of accounting correction rather than a report of operational results.
Material Changes and Restatement Details
- Reason for Restatement: The Company incorrectly consolidated its ownership interest in Bois d'Arc Energy, LLC ("Bois d'Arc Energy") starting July 16, 2004.
- Accounting Correction: The Company determined it could not control Bois d'Arc Energy due to joint management provisions in the operating agreement. Consequently, the Company must switch from full consolidation to the proportionate consolidation method for its 59.9% interest.
- Impact on Financials: The restatement has no impact on the Company's consolidated stockholders' equity, net income, or earnings per share for the periods presented.
- Scope: Only the three and nine-month periods ended September 30, 2004 are affected. No other periods require restatement.
Guidance, Outlook, and Risks
- Management Action: The Audit Committee discussed the issue with Ernst & Young, LLP. The Company will file an amendment to its Form 10-Q (Form 10-Q/A) containing the restated financial statements.
- Non-Reliance: Investors are advised that previously issued financial statements for the periods ended September 30, 2004, should no longer be relied upon.
- Outlook: The filing contains no forward-looking guidance or updated operational outlook beyond the accounting correction.
Investor Verification Checklist
- Verify the upcoming Form 10-Q/A filing for the quarter ended September 30, 2004, to review the restated financial statements.
- Confirm that the switch to proportionate consolidation for Bois d'Arc Energy does not alter the reported net income or EPS as stated in this 8-K.
- Review the attached Press Release (Exhibit 99.1) for additional context on the restatement announcement.