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    The Pantry Adjusts Financial Statements

    North Carolina chain says it inadvertently overstated accounts payable by $8 million in two different quarters.

    SANFORD, N.C. -- As corporate financial statements continue to be scrutinized ahead of today's deadline for CEOs to personally certify their financial statements, The Pantry Inc. yesterday said it found errors in its quarterly reports for quarters ending in December 2001 and March 2002.

    "During its review of the Exchange Act reports for fiscal year 2002, the company discovered an inadvertent error in its quarterly reports for the first and second quarter ending December 2001 and March 2002, respectively," the company said in a statement. "The effect of this error was an overstatement of accounts payable of approximately $8 million in each quarter."

    Accordingly, The Pantry filed amendments to these quarterly reports to reflect appropriate adjustments to its consolidated balance sheets. These adjustments did not affect its consolidated statements of operations, earnings or working capital. The company is taking steps to avoid this type of problem in the future, said Pete Sodini, president and CEO of the Sanford, N.C.-based chain.

    "The Pantry is pleased to comply with the SEC Order and new legal requirements of the Sarbanes-Oxley Act of 2002. We support current legislative and NASDAQ initiatives regarding corporate governance and accountability. We believe these new standards and proposed initiatives are important steps in regaining the public's trust in our capital markets and enhancing transparency in financial reporting."

    The company, which operates more than 1,300 convenience stores under 17 brands in 10 states, said has taken steps to avoid this type of problem in the future, adding its senior executives certified the company's financial statements with the Securities and Exchange Commission (SEC) yesterday.

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