Risk & Compliance

Navistar Gets Current on Financials, Relists

The company is fighting to shed the memory of years worth of accounting errors and restatements.
Stephen TaubJune 27, 2008

Navistar International has filed its quarterly reports for the first and second quarters of 2008, bringing it up-to-date after years of restatements and delinquencies. As a result, on Monday the truck and engine maker will be reinstated on the New York Stock Exchange under its original ticker symbol, NAV.

“We’re happy to be caught up with our financial reporting. We will keep our focus on delivering on our commitments to shareholders,” says chairman and CEO Daniel Ustian.

Navistar’s stock surged more than 8 percent on the news. “Relisting and potentially becoming an index component could serve as a near-term catalyst for shares,” UBS analyst Henry Kim said in a research note, according to Reuters.

Last week Navistar moved CFO Bill Caton to the newly established role of chief risk officer. Terry Endsley, formerly senior vice president and treasurer, succeeds Caton and assumes his seat on the board of directors.

In April 2006, Navistar said it would restate its results for 2002 through 2004 and for the first nine months of fiscal 2005 as a result of accounting irregularities that prevented it from filing its 2005 annual report and first-quarter 2006 report. In addition, the company fired its longtime auditor, Deloitte & Touche, replacing it with KPMG. Deloitte had served as Navistar’s auditor for 98 years.

A law firm conducting an independent investigation of the issues causing the restatements was very critical of Navistar’s finance department. The assessment, written last October, said the company needed a stronger awareness of ethical standards, the importance of internal controls, and strict adherence to generally accepted accounting principles.

To address these issues, Navistar hired more than 50 accounting employees; strengthened its finance and accounting leadership; realigned its finance and accounting reporting structure; and hired a new vice president of internal audit, a new chief accounting officer, and a new chief information officer.