Replies to post #8848 on Value Microcaps Motherboard

[DonsHub]

thanks, SSkills and Bobwins. I hope they file this week... biting my nails now.

[cavan]

Sarbanes-Oxley Act makes annual reports better late than sorry
List of delinquent filers includes some of New Jersey's biggest companies
Sunday, April 10, 2005
BY DAVID SCHWAB
Star-Ledger Staff
There was a time when big companies wouldn't dare be late filing their annual report with the Securities and Exchange Commission.

As the heavy season for these filings comes to a close, lateness has become almost commonplace.

"It's not the exception any more," Jonathan Schiff, a professor of accounting in the graduate school of business at Fairleigh Dickinson University in Teaneck. "Four years ago, if a company missed the filing, all sorts of red flags go up."

Already this year, 1,769 companies have formally asked the SEC for an extension in filing their annual reports, according to John Heine, an SEC spokesman.

For all of 2004, the number of companies that sought extensions was 2,064. Most of these filings occur before the end of March, the deadline for companies whose fiscal years end Dec. 31.

In some cases, the delay may stem from sizable and previously announced problems, such as the case of American International Group, which is being investigated by the New York attorney general's office, or at Fairfield-based Bradley Pharmaceuticals, which is facing an SEC probe of its accounting procedures.

But in other cases, it may signal something else.

A number of companies have asked for extensions in order to comply with provisions of the 2002 Sarbanes-Oxley Act that kicked in this year.

Section 404 of the law requires companies and their auditors to conduct detailed reviews of the effectiveness of their internal financial controls and disclose the results in their annual reports.

A recent study by Glass Lewis & Co., a research firm based in San Francisco, found more than 280 companies with a market value of more than $100 million had filed extensions.

Leah Townsend, a Glass Lewis analyst, estimated that "at least half" of the those requesting extensions attributed the delays to Sarbanes-Oxley.

The list of delinquent filers includes a sampling from among New Jersey's biggest companies: Cambrex, Hooper Holmes, Savient Pharmaceuticals, Ventiv Health, Celegene and Sealed Air.

Each of these companies filed its annual report by the end of March, within 15 days of the extension request, as allowed by the SEC.

"It allowed us the additional time to complete the documentation process," said Eric Burrell, a spokesman for Sealed Air, the Saddle Brook-based company best known for making Bubble Wrap. He said complying with the regulations takes a bit longer the first time around.

"In future years, we expect the process would become more streamlined," he said.

Gregory Mark, a law professor at Rutgers Law School in Newark and an expert on corporate governance matters, said delays can be costly for companies. And companies are having to adjust the way they do business in response to greater scrutiny from regulators.

These days, senior managers can't just worry about running the business. They must also keep the SEC informed, he said.

"The balance in the last few years has certainly been tipping much more in favor of the reporting of information, and that is something companies are not used to," he said.



David Schwab can be reached at [e-mail] or [phone].