Charlotte-based Swisher Hygiene said recurring losses raise doubt about the company’s ability to continue as a going concern and that it may have to take actions that include selling assets, raising additional capital and taking on more debt.
If the company cannot improve results or raise additional funds, it could have to reduce its operations or may default on loans, the company said in its annual report filing Tuesday.
The latest news from Swisher, a provider of sanitizing services and cleaning chemicals, comes just over two weeks after the company delayed the release of its 2014 financial results. The company had said it needed more time to complete the audit of its financial statements to assess the effectiveness of its own control over financial reporting.
In the report, Swisher’s auditor, BDO USA, also expressed doubt about the company’s ability to continue as a going concern and said the company did not maintain effective internal controls over its financial reporting as of Dec. 31.
Digital Access for only $0.99
For the most comprehensive local coverage, subscribe today.
This isn’t the first time Swisher has encountered issues with its accounting practices. Last year the company reached a $5.5 million settlement agreement with shareholders who said Swisher inflated its share price with misleading financial results.
The company had said in 2012 that its previous financial statements could no longer be relied upon and that its accounting had been inadequate to deal with its recent flood of acquisitions. Swisher restated its financial results, resulting in $4.8 million more in losses for 2011 and sending its stock plummeting to below $1 a share.
For the fourth quarter that ended Dec. 31, 2014, Swisher reported a net loss of 56 cents a share, compared with a loss of $5.94 a share during the same period in 2013. For the full year, Swisher posted a loss of $2.64 a share, compared with a loss of $8.55 a share in 2013.
Total revenue for the fourth quarter was $45.9 million, down 9 percent compared with the same period in 2013.
“Our success is contingent upon improved customer retention, profitable organic revenue growth and continued improvement in cost efficiencies in 2015,” Bill Pierce, Swisher’s president and CEO, said in an earnings call Wednesday.
“Failure to execute the plan successfully or unforecasted shortfalls in available cash may require us to alter its plan, sell other non-core or non-essential assets, or raise additional equity or additional financing.”