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ATHEY PRODUCTS CORPORATION REPORTS OVERSTATEMENTS OF INVENTORY RECORDS AT KOLMAN DIVISION

 ATHEY PRODUCTS CORPORATION REPORTS OVERSTATEMENTS
 OF INVENTORY RECORDS AT KOLMAN DIVISION
 RALEIGH, N.C., March 11 /PRNewswire/ -- Athey Products Corporation (NASDAQ-NMS: APTC) (the "Company"), located in Raleigh, North Carolina and engaged in the business of manufacturing street sweepers and related equipment, issued the following announcement on this date:
 The Company announced that it recently determined that there had been overstatements of inventory records at the Company's Kolman Division located in Sioux Falls, South Dakota, based upon compilation of the final results of the Sept. 30, 1991 physical inventory and completion of an investigation precipitated by matterS which came to light during review of the compilation of the physical inventory.
 The total inventory values as reflected by the accounting records were overstated by approximately $822,000 due to inappropriate costing methods used in arriving at the inventory balance for financial reporting purposes. The $822,000 adjustment is believed by Management to have resulted from accounting errors and write downs, and not theft. An additional adjustment for $100,000 was recorded to increase the Company's reserves for obsolescence and excess quantities.
 At the Athey Division, accounts receivable were decreaseD by approximately $642,000 because of accounts determined to be uncollectible in its annual review of accounts receivable.
 Other fourth quarter adjustments at the Kolman and Athey Divisions increased the pre-tax loss by approximately $498,000, representing inventory obsolescence reserves, warranty reserves, and other miscellaneous adjustments.
 The effect of the foregoing adjustments increased the Company's loss for the year ending Dec. 31, 1991 by approximately $2,062,000 to approximately $3,333,000 before the provision for income taxes. After taking into consideration the related tax credit of approximately $1,063,000, the Company's net loss for the year is expected to be approximately $2,270,000 after taxes. This will result in an estimated tax refund of approximately $1,050,000.
 -0- 3/11/92 R
 /CONTACT: James D. Cloonan, President and C.E.O., or Archie Spencer, Vice President and Secretary-Treasurer, Athey Products Corporation, 919-556-5171/
 (ATPC) CO: Athey Products Corporation ST: North Carolina IN: MAC SU:


KD-DF -- CH007 -- 7433 03/11/92 16:05 EST
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Publication:PR Newswire
Date:Mar 11, 1992
Words:354
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