Core Molding Technologies Inc. is investigating alleged ``misstatements'' by a former employee about inventory at one of its factories that had taken place for at least a year.
The sheet molding compound compression molder and compounder said Jan. 26 that it will take a $400,000 after-tax charge linked to ``operational inefficiencies that were concealed by intentional inventory misstatements by a former employee,'' involving the company's Gaffney, S.C., plant. Executives did not identify the employee.
The Columbus, Ohio-based firm launched the probe after discovering problems with material and labor during its annual physical inventory review.
The investigation involves external auditors, the board of directors' audit committee, private investigators and an independent accounting firm, with preliminary reports indicating problems occurred for at least 12 months before they were discovered.
``We are severely disappointed that this former employee deliberately violated well-defined policies and procedures,'' James Simonton, president and chief executive officer, said in a news release.
Core, founded in 1996, molds composites for commercial trucks, recreational boats and the auto industry.
The public company posted $94 million in sales in 2002, up from $73 million in 2001. It reported $70 million for the first nine months of 2003, with profit of $1.7 million.
The investigation may affect those 2003 results already reported and potentially the last quarter of fiscal 2002, the company said.
