Essex Rental Corp. last week announced that the audit committee of the board of directors, based on the recommendation of its independent registered public accounting firm, concluded that the financial statements for the year ended Dec. 31, 2010, should no longer be relied upon as a result of an error that relates to the understatement of the company’s estimate of net deferred state tax liabilities resulting from the acquisition of Coast Crane and an overstatement of valuation allowances related to state net operating losses.
The anticipated impacts of the restatement for the year ended Dec. 31, are a net $1.8 million increase in the company’s deferred state tax liabilities at Dec. 31, and an increase in tax expense and accordingly, net loss by the same amount for 2010. Also, both basic and diluted loss per share is anticipated to increase from ($0.59), as originally disclosed in the 2010 Annual Report, to ($0.71) per share, as restated.
The restatement has no impact on the company’s cash flows from operations for the year ended Dec. 31, as previously reported in the statement of cash flows in the company’s 2010 Annual Report, or the company’s cash or liquidity as of that date.
A comprehensive description of the error is discussed within a current report on Form 8-K filed with the Securities and Exchange Commission on May 5. A copy of the filing is also available on the company’s investor relations section of its website at www.essexrentalcorp.com.
Essex Crane Rental Corp., Buffalo Grove, Ill., is No. 40 on the RER 100. Seattle-based Coast Crane Co. is No. 34.
