Newspaper article Pittsburgh Post-Gazette (Pittsburgh, PA)

PPG Says Ex-Controller Inflated Profit Reports Sec Probe Continues

Newspaper article Pittsburgh Post-Gazette (Pittsburgh, PA)

PPG Says Ex-Controller Inflated Profit Reports Sec Probe Continues

Article excerpt

PPG's former controller told employees to bypass internal controls and inflate profits before quarterly reports were finalized, the paints and coatings giant said in documents filed with the Securities and Exchange Commission.

The SEC is investigating Downtown-based PPG for improper accounting practices that led to the company firing the controller, Mark C. Kelly, and restating its results for the first quarter of this year and all of 2017 and 2016.

In its restated results for the first quarter that ended March 31, PPG said net income from continuing operations was $19 million less than originally reported.

Net income totaled $328 million, or $1.31 per share, compared with $347 million, or $1.38 per share as reported initially.

Adjusted net income for the quarter was $342 million, or $1.36 per share, down $8 million, or 3 cents per share from PPG's original first-quarter report.

For 2017, net income from continuing operations was $2 million less than the $1.4 billion originally reported; and for 2016, it was $4 million less than the $547 million the company originally reported for that year.

Problems with PPG's accounting practices first surfaced April 19 when the company announced its first-quarter results.

At the time, PPG said an internal reporting system found $1.4 million in expenses including legal fees and taxes that should have been accrued in the first quarter and that possibly another $5 million had not been accrued.

The audit committee of PPG's board of directors investigated the discrepancies and concluded its probe Wednesday.

PPG said it is cooperating with the SEC on the federal agency's investigation. "We self-reported these issues to the SEC," the company said in its filing.

In a statement, Michael McGarry, PPG's chairman and chief executive, said, "We have already begun to implement a remedial plan to address the issues identified by the internal report and the investigation as more fully described in our filings today. …

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