RE:March 31st Financialsbrandinvestor wrote: Seeing as this company went from a 30 million to 500+ million dollar company in less than 3 years, with more than 400 million of that coming in the last year, It's much more difficult to gather the numbers and release the reports they need on time, with this level of growth.
I'm not surprised they are waiting until the last minute to make sure everything has been checked over at least 2-3 times to make sure it's correct.
For anyone that is curious, here is high level snapshot of the year end process:
- management prepares annual financial statements that are much more detailed than quarterly financials
- auditors come in and "test" the financials to ensure that they are accurate and in accordance with accounting standards. They will do many things, including: (i) check the bank balances; (ii) test the quality of working capital; (iii) check if payables are correctly cutoff at year end; (iv) perform valuation analysis of intangibles and goodwill; (v) ensure that all acquisitions have been accounted for correctly; (vi) ensure that the revenue recognition criteria are in accordance with standards and properly applied etc.
- the audit process can be long. Given that most of the growth is by acquisition, the financial statements are inherently "riskier" so that auditors require high levels of testing and review (note that this comment is not specific to WELL, but to any company that grows by acquisition)
- once the auditors are satisfied and management corrects any mistakes (this is a whole other conversation) then an audit committee meeting is scheduled
- at the meeting, the audit committee receives the auditors report, discusses any disagreements with management, grills management on the financials, and discusses the overall reporting environment, control environment. Management leaves and then the audit committee and the auditors do a private meting
- assuming all goes well, then the management team activates the IR team to get press releases and conference call notes together.
My guess is that the auditor / management discussions focused on balance sheet and acquisition related issues. It isn't actually that hard to consolidate financials assuming you have a competent team and decent system. If they don't, then you can bet the audit committee will hear about it.
The above is a public service message for anyone that is unfamiliar with the basic mechanics of year end public company reporting.