Welbilt, Inc. (WBT) Restates Consolidated Financial Statements due to Material Weakness Relating to Income Taxes
According to the complaint, on November 5, 2018, the company filed a report with the U.S. Securities and Exchange Commission titled “Non-Reliance on Previously Issued Financial Statements or a Related Audit Report or Completed Interim Review” announcing that previously issued financial statements as of December 31, 2016, could no longer be relied upon to do “prior period errors” primarily related to certain income tax computations. Welbilt disclosed that it discovered errors in the tax basis of a foreign subsidiary and incorrect amortization of intangible assets by the same entity that resulted in an understatement of the U.S. tax liability. Due to these errors, Welbilt would restate its consolidated financial statements for year ended December 31, 2016, and revise the years ended December 31, 2015 and 2017. On this news, the price of Welbilt’s stock fell by 27% over the next two trading sessions, closing at $14.00 on November 8, 2018, and has yet to recover.
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