Ace restates financials for fiscal years 2004-2006
Ace Hardware restated previously issued income and equity for fiscal years 2006, 2005 and 2004. The restatement was primarily the result of the discovery of a $152 million shortfall due to an inventory accounting error, which the company announced in September 2007.
Net income for 2006 was restated as $94.5 million, previously reported as $107.4 million. The 2005 figures were adjusted to $79.5 million, down from $100.4 million. The 2004 net income was adjusted to $65.0 million, down from $101.9 million.
The inventory accounting error by itself reduced net earnings by $18.9 million in 2006, by $19.3 million in 2005 and by $33.5 million in 2004. These reductions combined with other relatively minor out-of-period adjustments and reclassifications in the restatements.
The Oak Brook, Ill.-based company restated equity for the same three years. Equity was restated as $174.0 million in 2006, $182.0 million in 2005 and 191.0 million in 2004. Those figures were downwardly revised from $319.9 million, $314.9 million and $303.0 million, respectively.
Ace said that additional measures are also being taken to restore company equity to the $320 million level, including the establishment of variance allocation accounts for co-op members.
“We anticipate having Ace’s equity restored to previously reported levels within the next two years,” said Ace president and CEO Ray Griffith. “The fact that we identified the discrepancy, conducted a full, third-party investigation that found no fraud, no missing money and no missing inventory, and have issued audited restated financials within a six-month time frame is a testament to our resolve for fixing the issue and moving the company forward.”
IKEA store set for Charlotte, N.C.
Swedish home goods retailer IKEA has announced plans for its first location in the Charlotte, N.C., area.
The store is slated to open in spring 2009, and will be the 36th IKEA store in the United States.
“Construction crews have begun preliminary site work such as clearing and grading, and we look forward to breaking ground officially in several months,” said Michael Maier, IKEA real estate manager, in a statement.
The 356,000-square-foot store will include 50 model room settings, three complete model home interiors and a 300-seat restaurant.
Further upcoming IKEA stores in the United States are planned for Brooklyn, N.Y.; Somerville, Mass.; Tampa, Fla.; and West Chester, Ohio.
Sears Canada acquires duct cleaning business
Toronto-based Sears Canada has announced the purchase of Excell Duct Cleaning, a privately held network of air duct cleaning licensees for Sears in 24 regions of Canada.
Excell provides duct cleaning services, HVAC service and repair and the sale of some clean air products under the “Sears Indoor Clean Air Services” name, according to the retailer.
Terms of the deal were not disclosed. Current employees of Excell will remain and continue to work out of their Burlington, Ontario, office, the company said.
“Having Excell under the Sears Home Services umbrella will position Sears to expand the products and services offered through the licensee network, including those relating to heating, ventilation and air conditioning,” explained Ajit Khanna, senior vp-home services, travel and contact centers for Sears Canada.
“Our aim is to become more important in the management of our customers’ homes, and today’s announcement is an important step in accomplishing this,” Khanna added.