Reddy Ice Revises Presentation of Historical Financial Statements

Mar 31, 2005, 00:00 ET from Reddy Ice

    DALLAS, March 31 /PRNewswire/ -- Reddy Ice today announced that, after a
 review of the Company's presentation of its operating results, management and
 the Audit Committee of the Company's Board of Directors, have decided to
 reclassify depreciation expense in the Company's historical financial
 statements, which will have the effect of reducing gross profit, but which
 will not have any effect on income from operations or net income.
     In the process of preparing its consolidated financial statements for the
 year ended December 31, 2004 and in responding to comments from the Securities
 and Exchange Commission ("SEC") on the Company's Registration Statement on
 Form S-1 relating to the Company's contemplated initial public offering of
 common stock, the Company determined that its presentation of "cost of sales"
 and "gross profit" as previously reported was not consistent with GAAP.
     Historically, the Company has not included depreciation expense related to
 cost of sales as a component of cost of sales and therefore had excluded it
 from gross profit calculations.  The exclusion of such depreciation from the
 calculation of gross profit is inconsistent with the Securities & Exchange
 Commission Staff Accounting Bulletin Topic 11:B, "Depreciation and Depletion
 Excluded from Cost of Sales".  Consistent with presentations of other
 companies in related industries, the Company is adding the caption
 "depreciation expense related to cost of sales" above "gross profit" in its
 consolidated statements of operations.  The Company will restate its
 historical consolidated statements of operations to reclassify amounts from
 "depreciation and amortization expense" to "depreciation expense related to
 cost of sales", which will have the effect of reducing gross profit, but will
 not have any effect on income from operations or net income.  In addition, the
 Company is renaming the caption "cost of sales" to "cost of sales (excluding
 depreciation)" to clarify that depreciation expense attributable to cost of
 sales is not included in that caption.
     The Company will restate its historical financial statements to reflect
 the revised presentation.  This change in presentation does not affect
 historical consolidated balance sheets or consolidated statements of cash
 flows.
     As a result of the restatement, the Company's previously issued annual and
 quarterly financial statements should no longer be relied upon.  The Company
 intends to file the corrections to its annual financial statements in its 2004
 Annual Report on Form 10-K no later than March 31, 2005.
     The Company's management and Audit Committee of the Board of Directors
 have discussed the matters disclosed in this press release with Deloitte &
 Touche LLP, the Company's independent registered public accounting firm.
     Reddy Ice manufactures and distributes packaged ice, serving approximately
 82,000 customer locations in 31 states and the District of Columbia under the
 Reddy Ice brand name.
 
      Contact:  Steven J. Janusek
                Executive Vice President & CFO
                sjanusek@reddyice.com
                800-683-4423
 
 

SOURCE Reddy Ice
    DALLAS, March 31 /PRNewswire/ -- Reddy Ice today announced that, after a
 review of the Company's presentation of its operating results, management and
 the Audit Committee of the Company's Board of Directors, have decided to
 reclassify depreciation expense in the Company's historical financial
 statements, which will have the effect of reducing gross profit, but which
 will not have any effect on income from operations or net income.
     In the process of preparing its consolidated financial statements for the
 year ended December 31, 2004 and in responding to comments from the Securities
 and Exchange Commission ("SEC") on the Company's Registration Statement on
 Form S-1 relating to the Company's contemplated initial public offering of
 common stock, the Company determined that its presentation of "cost of sales"
 and "gross profit" as previously reported was not consistent with GAAP.
     Historically, the Company has not included depreciation expense related to
 cost of sales as a component of cost of sales and therefore had excluded it
 from gross profit calculations.  The exclusion of such depreciation from the
 calculation of gross profit is inconsistent with the Securities & Exchange
 Commission Staff Accounting Bulletin Topic 11:B, "Depreciation and Depletion
 Excluded from Cost of Sales".  Consistent with presentations of other
 companies in related industries, the Company is adding the caption
 "depreciation expense related to cost of sales" above "gross profit" in its
 consolidated statements of operations.  The Company will restate its
 historical consolidated statements of operations to reclassify amounts from
 "depreciation and amortization expense" to "depreciation expense related to
 cost of sales", which will have the effect of reducing gross profit, but will
 not have any effect on income from operations or net income.  In addition, the
 Company is renaming the caption "cost of sales" to "cost of sales (excluding
 depreciation)" to clarify that depreciation expense attributable to cost of
 sales is not included in that caption.
     The Company will restate its historical financial statements to reflect
 the revised presentation.  This change in presentation does not affect
 historical consolidated balance sheets or consolidated statements of cash
 flows.
     As a result of the restatement, the Company's previously issued annual and
 quarterly financial statements should no longer be relied upon.  The Company
 intends to file the corrections to its annual financial statements in its 2004
 Annual Report on Form 10-K no later than March 31, 2005.
     The Company's management and Audit Committee of the Board of Directors
 have discussed the matters disclosed in this press release with Deloitte &
 Touche LLP, the Company's independent registered public accounting firm.
     Reddy Ice manufactures and distributes packaged ice, serving approximately
 82,000 customer locations in 31 states and the District of Columbia under the
 Reddy Ice brand name.
 
      Contact:  Steven J. Janusek
                Executive Vice President & CFO
                sjanusek@reddyice.com
                800-683-4423
 
 SOURCE  Reddy Ice