Capital Markets

Late Filers Face Delisting

Nearly 300 companies recently asked for a 15-day extension for filing their 10-K, but dozens of them reportedly failed to meet even the extended de...
Dave Cook and Stephen TaubApril 5, 2005

The New York Stock Exchange and the Nasdaq Stock Market have notified at least four companies that they may be delisted for not filing their year-end report after being granted an extension.

Most companies that report their results on a calendar-year basis were required to submit their annual report by March 16. Nearly 300 companies, including about 60 in the final days leading up to that date, asked for and received an additional 15 days, according to shareholder-advisory firm Glass, Lewis.

Dozens of companies, however, failed to meet even the extended deadline, including American International Group, which is embroiled in a growing accounting scandal. Most of the late filers stated either that they were in the midst of restating results for prior periods or were unable to complete their assessment of their internal controls as required under Section 404 of Sarbanes-Oxley.

Navigant International announced Tuesday that it had been notified by the Nasdaq that due to the company’s late filing, it may be delisted from the stock market, according to wire-service reports. The provider of corporate travel management, which has a market capitalization of $221 million, had previously announced that its 10-K was delayed due to a possible restatement back going as far as fiscal 2000. The company added that it would appeal the delisting decision by the Nasdaq staff.

Key Energy Services announced that it was informed by the New York Stock Exchange that its common stock will be suspended prior to the opening of trading on April 8, when it will begin trading on the pink sheets.

The onshore oil-well service company, which has a market cap of $1.5 billion, added that it does not intend to appeal but that it plans to reapply for an NYSE listing as soon as it is current with its filings. Key Energy also asserted that it does not expect the suspension to have a material impact on its operations.

The Cheesecake Factory, which has a $2.7 billion market cap, announced that it faces a potential delisting from the Nasdaq on April 12 due to a late filing of its 10-K. Yesterday, the restaurant operator restated results for the first three quarters of 2004, according to wire-service reports, but it remains unclear whether this filing will help the company avert delisting.

Red Robin Gourmet Burgers also announced that the Nasdaq is threatening to delist the company as of April 8, due to the its failure to timely file its annual report. The restaurant chain, which has a $798 million market cap, also noted that it has been reviewing its lease accounting policies in light of recent interpretations issued by the Securities and Exchange Commission.

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