Scottsdale-based Rural/Metro Corp. is out of compliance with creditors and
Nasdaq because it was unable to file its latest 10-K annual report.
During the company’s year-end fiscal review, it identified accounting misstatements related to financial reporting for income taxes, deferred rent and other items.
On a preliminary basis, the company estimates the aggregate cumulative effect of the adjustments to be $2 million to $4.5 million on an after-tax basis.
In addition to filing the 10-K for its fiscal year ended June 30, the company will restate:
• Consolidated financial statements for each of the fiscal years ended June 30, 2005 and 2006.
• Selected consolidated financial data for each of the fiscal years ended June 30, 2003 through 2006.
• Interim consolidated financial information for each of the first three quarters and the related interim periods in the fiscal years ended June 30, 2006 and 2007.
Until Rural/Metro completes the review of its accounting processes, it is unable to finalize its financial statements for the latest 10-K.
The company plans to file all required filings with the U.S. Securities and Exchange Commission, including the 10-K, once it has completed the restated financial information.
In the meantime, Rural/Metro is in default under its senior credit facility and is seeking a waiver.
If a waiver is not obtained, it could have an adverse effect on the company’s
financial condition and liquidity, according to a news release issued by the company.
Rural/Metro also is not in compliance with Nasdaq’s filing requirement in order for its stock to be listed on its exchange.
The company expects to restore compliance with listing requirements when it
files the 10-K and other required reports with the commission.