U.S. Plastic Lumber Corp., in the midst of a major restructuring, has decided to replace its accounting firm for its current fiscal year.
USPL President Mark Alsentzer said the decision to terminate KPMG LLP was made to save money and for the attention it will receive from a smaller firm. KPMG serves many Fortune 500 companies.
According to Alsentzer, the move has nothing to do with accounting issues involving KPMG.
The auditing company wrote, in its report on USPL's 2001 financial statements, that the company's ``ability to continue as a going concern'' was in substantial doubt due to its debt burden and operating losses.
USPL had no disagreement with KPMG over its accounting disclosures, Alsentzer said. The newly hired firm, BDO Seidman LLP of Chicago, has not been consulted regarding accounting principles or an audit opinion, he added.
The Boca Raton, Fla.-based plastic lumber maker will save about $50,000 a year by hiring Seidman to replace KPMG, Alsentzer said. The appointment must be ratified May 24 at the annual meeting of the publicly held company.
USPL has made some other moves to decrease costs and lower debt. Last year, the company began closing nine of its 12 plastics sites and moving out of the merchant recycled resin business.
Between December and March the company shifted about 20 extrusion lines from the closed facilities to its plants in Chicago, Denver and Ocala, Fla. The company also plans to sell off its Clean Earth Inc. soil-cleaning unit to New CEI Inc. for about $45 million. The completion date is pending while New CEI meets financial terms.
USPL plans to sell secondary equipment, including resin-feed systems, at its shuttered plants.
Those moves, plus a good first quarter of 2002, should help the company reduce debt obligations with several banks, Alsentzer said. USPL recorded the best quarter in its history and recorded operating profit for both its plastic lumber and recycling divisions, Alsentzer said. First-quarter figures are due out in mid-May.
``We're working with banks, and they continue to be cooperative,'' Alsentzer said. ``When you have divisions that are profitable, it becomes easier to work things out."