Indianapolis-based Calumet Specialty Products Partners L.P. has agreed to pay a $250,000 penalty to settle charges that the company issued an inaccurate financial report.
The U.S. Securities and Exchange Commission announced Monday that the fuel-products refiner violated federal securities laws when it issued an earnings release on March 8, 2018, that portrayed the company’s full-year 2017 financial performance as being better than it actually was.
On March 19, 2018, Calumet disclosed that its 2017 financial results would differ from the earlier report.
When the company issued its 2017 annual financial report on April 2, 2018, the company reported an annual loss of $103.8 million—$18.7 million greater than previously reported. It also reported earnings before interest, taxes, depreciation and amortization (EBITDA) totaling $246.7 million—$18.7 million less than it had reported on March 8.
The issue traces back to September 2017. That’s when Calumet moved to a new enterprise resource planning system, which caused numerous disruptions to the company’s operating and reporting activities.
According to an SEC document, Calumet’s interim controller, internal audit and compliance director and financial planning manager all left the company between September and December 2017.
As a result of these disruptions, Calumet filed its third-quarter 2017 earnings report seven weeks late.
By mid-February, the SEC document says, Calumet had not announced when it expected to issue its next earnings release, prompting investors, analysts and members of the media to question the company about this.
Those pressures led Calumet to issue an earnings release on March 8, even though it was still having challenges with its new enterprise resource planning system and other issues, the SEC said.
On March 19, when Calumet disclosed that it would be revising its previous financial report, Calumet’s stock price declined more than 8% in heavy trading.
“We are pleased that the investigation has concluded regarding the Company’s disclosures and procedures,” Calumet CEO Tim Go said in a prepared statement issued Tuesday. “With this matter now behind us, we can focus all of our efforts on continuing our transformation, growing our core Specialty business and enhancing value for our partners and unitholders.”
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