Raven to restate certain financial statements
Raven disclosed in a regulatory filing: "On November 17, the audit committee of Raven Industries, in consultation with management and after discussion with PricewaterhouseCoopers, the company's accounting firm, determined that the company's previously issued consolidated financial statements for the three- and nine-month periods ended October 31, 2015, the fiscal year ended January 31, 2016, and the three months ended April 30, 2016 should be restated to reflect the impact of certain errors described below. Accordingly, these financial statements and related reports of PricewaterhouseCoopers should no longer be relied upon... The company has concluded that certain long-lived assets of its Vista reporting unit, including finite-lived intangible assets, were impaired as of October 31, 2015. While the company is still assessing this matter, the range of estimated long-lived asset impairment for the Vista reporting unit is $3.5M-$4M pre-tax, or $2.2M-$2.5 after tax, for the three- and nine- month periods ended October 31, 2015 and the fiscal year ended January 31, 2016... The company has determined there was an error in the amount of goodwill impairment originally recognized at October 31, 2015 and that the goodwill of the Vista reporting unit was fully impaired as of that date, notwithstanding that the company is still evaluating the Vista long-lived assets described above, and therefore the remaining amount of goodwill of $4.1M, or $2.6M after tax, should have been recorded as an additional goodwill impairment... The company has also reassessed the fair value of the acquisition-related contingent consideration and has concluded that the fair value of the liability for this contingent consideration was also incorrect, and therefore there should have been a reduction in the liability and related benefit recognized of $0.8M, or $0.5M after tax... The financial statements will also be corrected for income tax related balance sheet account misclassifications of approximately $0.7M as of October 31, 2015; $1.7M as of January 31, 2016 and April 30, 2016; and a reduction of tax expense of approximately $0.5M for the year ended January 31, 2016... The company has identified... control deficiencies which existed as of October 31, 2015, January 31, 2016, and April 30, 2016, which constitute material weaknesses... The potential impact of all such adjustments that have been identified to date will reduce pre-tax income up to $7.3M for the three- and nine-month periods ended October 31, 2015, and reduce pre-tax income and net income by up to $6.9M and $3.9M for the year ended January 31, 2016."