Apollo Group disclosed that accounting revisions, including adjustments for non-cash equity-based compensation charges, will have “a material adverse impact” on its previously reported financial results.
Other potential adjustments may reflect revisions to bad debt reserves, accruals for Title IV lender refund reimbursements, completion of the company’s its annual goodwill impairment review as of August 31, 2006, and other accounting policy changes or refinements.
An education company best known for operating the University of Phoenix, Apollo added that its interim chief financial officer and newly named chief accounting officer would be completing these changes.
Last November, Apollo disclosed that an internal investigation had “discovered various deficiencies” in its process of granting and documenting stock options, and added that it would restate prior results.
In that same press release, the company announced that chief financial officer and treasurer Kenda B. Gonzales had resigned “for personal reasons”; Joseph D’Amico, senior managing director of interim management company FTI Palladium Partners, now holds the CFO title. Apollo also placed chief accounting officer Dan Bachus on administrative leave; earlier this week the company appointed Brian L. Swartz as vice president, corporate controller, and chief accounting officer.
In December, Apollo disclosed that a seven-month investigation by a special committee of outside directors found that certain former officers took steps that may have been intended to mask failures in the approval process for stock-option grants. The company added that the potential cover-up involved the Apollo’s financial reporting and payment of taxes.
Apollo stressed that none of these findings apply to any member of its current executive team.
In a conference call with investors on Wednesday, president Brian Mueller said the company would submit its late filings to the Securities and Exchange Commission by April 30.