Deltic Timber 8-K 2005
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Current Report Pursuant to Section 13 or 15(d) of
The Securities Act of 1934
August 3, 2005
Date of Report (date of earliest event reported)
Deltic Timber Corporation
(Exact name of registrant as specified in its charter)
Registrants telephone number, including area code (870) 881-9400
(Former name or former address, if changed since last report)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2.below):
Item 4.02(a) Non-Reliance on Previously Issued Financial Statements or a Related Audit Report or Completed Interim Review
Restatement and non-reliance
On August 3, 2005, the Audit Committee of the Board of Directors of Deltic Timber Corporation (Deltic or the Company) approved a recommendation by Deltics executive management that the Company should file an amendment to its Annual Report on Form 10-K for the year ended December 31, 2004, to amend and restate its financial statements for the years 2002 through 2004, for the third quarter of 2002, and for each quarter in 2003 and 2004. The Audit Committee further determined that in light of the restatement, Deltics previously filed financial statements and other financial information for these periods should no longer be relied upon. The restatement will be filed to correct misstatements that have been recently discovered with respect to the carrying value of the Companys inventory of third-party purchases of standing timber used to supply its Ola sawmill. The cumulative effect of these corrections is expected to be a reduction in after-tax earnings of approximately $1.3 million ($0.2 million in 2002, $0.5 million in 2003, and $0.6 million in 2004) and a reduction in third-party purchased standing timber inventory as of December 31, 2004, of approximately $2 million. The correction of the misstatements has no effect on either the Companys individual-year or cumulative cash flows.
In mid-July 2005, the Companys log supply procurement manager for its Ola sawmill disclosed to two of Deltics senior officers that the volume of certain tracts of third-party purchased standing timber inventory recorded on Deltics books was overstated. The overstatement arose from his failure to report to accounting personnel, and his having concealed from accounting personnel, the differences between actual harvest volumes on these tracts and the original estimates of their timber volume, determined when the tracts were acquired. As a result, the correct dollar amount of log costs was not reflected in the mills manufacturing expense. Upon learning this information, the Company immediately terminated the employment of the procurement manager.
In response to these discoveries, the Company undertook an internal review of the matter and has concluded as of the date of this report: (a) the overstatement of purchased standing timber inventory for the Ola Mill is approximately 70 thousand tons; (b) no employee other than the procurement manager was aware of the overstatement on the Companys books and records; and (c) the purchased standing inventory for the Companys other, larger sawmill (Waldo Mill) is correct and properly reflected on the Companys books and records. In addition, analyses of the overstated inventory were conducted to make corrections to the respective periods impacted. From these analyses and due to the impact on the reported financial results for the Companys Mills segment in certain quarters, the Company has determined it is appropriate to amend and restate its previously filed financial statements.
From the date this matter was discovered through the date of this report, authorized officers of the Company, as well as its Audit Committee have discussed this matter regularly with representatives of KPMG LLP, the Companys independent registered public accounting firm.
Item 2.02 Results of Operations and Financial Condition
The following information is furnished pursuant to Item 2.02, Results of Operations and Financial Condition.
On August 5, 2005, Deltic issued a press release announcing that it will be filing an amendment to its 2004 Annual Report on Form 10-K to amend and restate Deltics financial statements and other financial information for the years 2002 through 2004, and certain quarters in 2002, 2003 and 2004. A copy of Deltics press release is attached hereto as Exhibit 99 and hereby incorporated by reference.
Item 9.01 Financial Statements and Exhibits
# 99 Press release, dated: August 5, 2005, issued by Deltic Timber Corporation
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
Date: August 8, 2005