AZZ Inc. Shareholder Alert – AZZ to Review Accounting Methodology
AZZ Inc. “Notification of Late Filing” – Inability to File Third Quarter 10-Q
Kehoe Law Firm, P.C. is investigating claims on behalf of AZZ shareholders (NYSE:AZZ) to determine whether AZZ Inc. and certain AZZ officers or directors violated federal securities laws or engaged in other unlawful business practices.
On January 9, 2018, AZZ Inc. filed SEC Form 12b-25, “Notification of Late Filing,” regarding AZZ’s inability to file its Form 10-Q for the quarter ended November 30, 2017 without unreasonable effort or expense for the following reasons:
As previously disclosed in a Form 8-K filed with the Commission on January 9, 2018, [AZZ Inc.], upon the recommendation of [AZZ’s] management and in consultation with [AZZ’s] Audit Committee and the [AZZ’s] independent registered public accounting firm, BDO USA, LLP, determined that [AZZ] historically should have accounted differently for certain contracts within its Energy Segment. As part of the review, [AZZ] is currently evaluating if there are any significant impacts to [AZZ’s] audited consolidated financial statements for the fiscal years ended February 28, 2015 and 2017, and the fiscal year ended February 29, 2016, as contained in its 2017 Annual Report on Form 10-K and the previously issued unaudited financial statements contained in its Quarterly Reports on Form 10-Q for the quarters ended May 31, 2017 and August 31, 2017. The analysis is ongoing, and [AZZ Inc.] cannot yet estimate when it will be completed. [Emphasis added]
[AZZ Inc.] is working diligently and expeditiously towards completion of the review. However, due to the time and effort involved and the potential carryover effects of the review on future periods, [AZZ] is unable file its Quarterly Report on Form 10-Q for the quarter ended November 30, 2017 until such review is completed. [Emphasis added]
AZZ’s Accounting Methodology – AZZ “Historically Should Have Accounted Differently for Certain Contracts in Its Energy Segment”
On January 9, 2018, AZZ filed SEC Form 8-K with an accompanying press release, “AZZ Inc. to Review Accounting Methodology Resulting in a Delay of the Issuance of its Fiscal Year 2018 Third Quarter Form 10-Q. AZZ Inc. Updates Guidance for Fiscal 2018 Revenue and Earnings per Share,” which stated:
AZZ , . . . a global provider of metal coating services, welding solutions, specialty electrical equipment and highly engineered services, today announced upon the recommendation of the [AZZ’s] management and in consultation with [AZZ’s] Audit Committee and [AZZ’s] independent registered public accounting firm, BDO USA, LLP, on January 4, 2018 determined that [AZZ] historically should have accounted differently for certain contracts within its Energy Segment. As disclosed in [AZZ’s] 2017 Annual Report on Form 10-K, revenue was historically recognized for the Energy Segment upon transfer of title and risk to customers or based upon the percentage of completion method of accounting for electrical products built to customer specifications. [AZZ] has determined that, in the case of contracts for which revenue was recorded upon contract completion and transfer of title, [AZZ] instead should have applied the percentage of completion method. [Emphasis added]
Consequently, according to the press release:
. . . [AZZ] is currently reviewing whether its historical accounting for these contracts differs materially from the percentage-of-completion method and if there are any significant impacts to [AZZ’s] audited consolidated financial statements for the fiscal years ended February 28, 2015 and 2017, and the fiscal year ended February 29, 2016, as contained in its 2017 Annual Report on Form 10-K and the previously issued unaudited financial statements contained in its Quarterly Reports on Form 10-Q for the quarters ended May 31, 2017 and August 31, 2017. The analysis is ongoing, and [AZZ] cannot yet estimate when it will be completed. However, [AZZ] is working diligently and expeditiously to complete the review and will provide any updates when and if they become available. Accordingly, [AZZ] cannot yet conclude upon the materiality of any potential adjustments. As the review is ongoing, [AZZ] is currently unable to file its Quarterly Report on Form 10-Q for the quarter ended November 30, 2017. [Emphasis added]
AZZ Inc. Stock Share Price Falls Sharply
On the news pertaining to AZZ’s late filing, AZZ’s share price fell sharply $3.14, or 6.20%, to close at $47.50 on January 9, 2018.
AZZ Inc. Shareholders
If you purchased, or otherwise acquired, AZZ securities and have questions or concerns about Kehoe Law Firm’s investigation, please contact John Kehoe, Esq, (215) 792-6676, Ext. 801, [email protected], complete the form above on the right or e-mail [email protected].
Kehoe Law Firm, P.C.
