Tuesday, March 3, 2015

Read the press release? Check the SEC filings

Companies disclose vital information through their press releases, but often regulatory filings contain more details.

Read the press release? Check the SEC filings

We always push for more transparency and disclosure from companies, but let’s not lose sight of how much information is already being disclosed.

You just need to know where to look for it.

Through its Web site, the Securities and Exchange Commission has made it very easy to access the documents you need to learn about any public company. Now the documents may be easy to access, but it’s not so easy to figure out which one contains the information you want.

Like any governmental body, the SEC has its own filing-system language. That’s how a corporate annual report gets filed as a Form 10-K. Press releases about the latest quarterly financials get attached to a Form 8-K.

But most press releases about earnings only scrape the surface of the numbers and information that a company files under a Form 10-Q. So if you read only the press release and ignore the 10-Q or 10-K, you’re missing the full picture.

For example, Healthcare Services Group Inc. released its fourth-quarter and year-end results on Feb. 9. Its press release consisted of five paragraphs, of which only two dealt with sales and net income.

In contrast, the Form 10-K the Bensalem provider of housekeeping services to nursing homes filed five days later was 73 pages long - not very long as such filings go. But in that document is where the company discusses how the economic crisis has affected it.

Another case in point: Armstrong World Industries Inc., of Lancaster, said Feb. 12 that Michael D. Lockhart would step down as chairman, president and CEO as of Feb. 28. The press release included a comment from Lockhart about how proud he was to be Armstrong’s CEO for nearly a decade. The board thanked Lockhart for his “prudent management” and “important contributions.”

But as we all know, departing CEOs don’t walk away empty-handed. So a check of the Form 8-K filed Feb. 12 shows that Lockhart is due a cash payment of about $11 million six months from the date of his “separation,” as well as his bonus earned in 2009 of about $1.5 million and 36 months of benefits coverage and outplacement services.

None of that is in the press release, but remember, the company did disclose it.

Mike Armstrong Inquirer Columnist
About this blog
Mike Armstrong blogs about Philadelphia corporations and business-related topics. Contact him at 215-854-2980. Reach Mike at marmstrong@phillynews.com.

Mike Armstrong Inquirer Columnist
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