Lewisville, Texas-based Orthofix International announced that it has completed the filing of its previously announced financial restatement. As part of the new filing, the company included an amendment to Orthofix’s annual report for the 2012 fiscal year, and another one for the company’s quarterly report ended March 31, 2013.
Last Monday, the global medical device company has also filed its quarterly report for the fiscal year ended June 30, 2013, and expects to release earnings for the year ended December 31, 2013, on March 27. Orthofix’s management indicated that it had prepared the restated financial statements along with the Audit Committee, which has conducted these matters on the previously independent review.
“The Audit Committee has concluded its review and is confident that the Company is appropriately addressing the matters, including the internal control over financial reporting weaknesses that led to the restatement,” said Davey S. Scoon, Chairman of the Audit Committee of the company’s Board of Directors.
The restatement of the company’s previously issued consolidated financial statements resulted in several key changes to the ledger sheet, such as a reduction in net sales of $14.7 million for the year ended December 31, 2012, and another reduction of $28.2 million for the year ended December 31, 2011. For 2010, there was an increase of $1.9 million, and the opening retained earnings and total stockholders’ equity at January 1, 2010 were increased to $8.3 million and $7.6 million, respectively, among other changes.
“Maintain a strong control environment”
As part of its commitment, Orthofix is updating its code of conduct, implementing an internal audit program, and all its employees will be required to annually acknowledge their commitment to adhering to its provisions and will be informed of the availability of a compliance hotline.
“We are committed to achieving and maintaining a strong control environment, high ethical standards and financial reporting integrity. This commitment has been and will continue to be communicated to every Orthofix employee. It is accompanied by renewed management focus on strategies and processes intended to drive long-term shareholder value,” said Brad Mason, President and Chief Executive Officer (CEO).
Orthofix is now planing a remediation of its internal control over financial reporting with several initiatives to control revenue recognition practices relating to the company’s distributors, the computation and recording of the company’s inventory reserves and to control over foreign subsidiary oversight.
“The past year has presented us with a unique set of challenges, but we are confident Orthofix is emerging stronger and with a renewed energy to drive our business forward,” added the CEO.