Swisher Hygiene to take charge of up to $101 million
02/25/2014 11:22 AM
02/25/2014 6:29 PM
Charlotte-based Swisher Hygiene said Tuesday that it will take a noncash charge of up to $101 million in its most recent quarter, which will erase much of the assets on the company’s balance sheet.
The charge stems from the reduction of Swisher’s “goodwill,” an accounting term for intangible assets such as brand name and a customer base. Companies typically take a “goodwill impairment charge” when the fair market value of such intangible assets is reduced substantially.
Swisher warned investors that it expects to reduce the amount of goodwill on its balance sheet sharply.
“Swisher is in the process of quantifying and finalizing the expected impairment, but it is anticipated to include all or a substantial amount of the goodwill on Swisher’s consolidated balance sheet,” the company said in a news release.
Goodwill is the largest single item on Swisher’s balance sheet, accounting for $101 million out of $279 million worth of total assets at the end of the third quarter.
The company said the charge will not affect its business.
“The expected impairment will neither affect Swisher’s liquidity or cash flows, nor impact Swisher’s future operations,” the company said.
Swisher has struggled in recent years after improper accounting forced it to restate several quarters worth of financial results. The problems sent Swisher’s stock plunging, and led to several major executive changes, including two new CEOs.
Earlier this month, the company reached a $5.5 million settlement with shareholders who alleged the company inflated its share price with misleading financial results. The company continues to deny the shareholders’ allegations.
Swisher’s stock closed down 7 percent, at 50 cents a share, on Tuesday.
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