Orthofix CFO bails after 6 months amid deepening financial fix (MassDevice)
Orthofix International CFO Mark Heggestad steps down after just 6 months as a 3-year financial restatement deepens on new evidence of inventory control problems.
Orthofix (NSDQ:OFIX) CFO Mark Heggestad is stepping down just 6 months into his tenure, even as the medical device company’s 3-year financial restatement yesterday deepened on new problems with its inventory controls.
Orthofix promoted its chief accounting officer Doug Rice to replace Heggestad, who took over May 9 from interim CFO David Ziegler. Longtime CFO Emily Buxton had been replaced in April after a decade as Orthofix’s financial chief. Heggestad, who is slated to stay on as an outside consultant, is leaving due to “personal circumstances,” Orthofix said.
The Lewisville, Texas-based firm (which is domiciled in Curacao) is an the middle of a project to restate 3 years worth of financial statements that’s already turned up changes to net sales totaling $20 million and a cumulative decrease in net income of $5 million. Yesterday the company revealed that the audit also found reporting inconsistencies on at least $25 million worth of spinal fixation devices on consignment with hospitals and other customers. More inventory needs to be physically counted, a process that could take several weeks, Orthofix said, meaning yet another delay in restating financial statements for 2011 through the 1st quarter of 2014.
Since cratering to under $20 apiece in October 2013, OFIX shares have rebounded to more than $30 each for much of the spring and summer. Shares closed at $31.06 yesterday before dropping in after-hours trading. The stock opened at $30.93 today and was down 2.0% to $30.43 shortly after the markets opened.
Orthofix also said it will ask for an extension of a credit agreement set to expire at the end of the month and seek a delay on a NASDAQ hearing scheduled for Oct. 2 to address a delisting notice.
Earlier this week, Orthofix added director Luke Faulstick, CEO of the electric transformer manufacturer Power Partners, upon the resignation of Kathleen Regan. She cited her recent appointment as COO of The Commonwealth Fund for the resignation.