Facebook Twitter

Accounting irregularities cited by Safety-Kleen Corp.

SHARE Accounting irregularities cited by Safety-Kleen Corp.

COLUMBIA, S.C. — Citing accounting irregularities, Safety-Kleen Corp. on Monday reduced reported earnings for fiscal years 1997 through 1999, wiping out about $534 million in reported earnings, and posted a fiscal 2000 loss of approximately $833 million.

The company started an investigation in March 2000 of accounting practices that resulted in the dismissal of three top officers and led to the withdrawal of its former independent public accountant, PricewaterhouseCoopers LLP.

Former chief executive Kenneth W. Winger, chief operating officer Michael J. Bragagnolo and chief financial officer Paul R. Humphreys were relieved of their duties on March 6 and resigned May 12, 2000.

Safety-Kleen filed for bankruptcy protection the following month.

Safety-Kleen spokesman John Kyte would not comment on who was responsible for the accounting irregularities, citing Justice Department and Securities and Exchange Commission investigations.

The restated financial results come after an extensive review by the company and accounting firm Arthur Anderson LLP.

Under the review, the company's 1997 revenues of $678 million have been restated as $642 million. The company's loss for the year was restated as $301.5 million, or $8.74 per share, wider than the $183.4 million, or $5.32 per share, loss previously reported.

The 1998 revenues of $1.185 billion were restated as $1.172 billion, with the net earnings of $11.5 million, or 18 cents per share, reversed to a net loss of $84.4 million, or $1.35 per share.

Previously stated earnings of $103.9, or $1.03 per share, for fiscal 1999 were wiped out, with the company now reporting losses of $223.2 million, or $2.52 per share. Revenues for the year were restated as $1.624 billion compared with a reported $1.685 billion.

The company also reported a loss of $833 million, or $8.27 per share, in fiscal year 2000. Revenue totaled $1.6 billion.

"It is unfortunate that the accounting irregularities occurred, and we deeply regret the negative impact this has had on so many people," chief executive David E. Thomas Jr. said. "Our new management team has worked hard during the past year to re-establish the confidence of our customers, vendors, regulators and employees."