Moore Wallace Announces Suspension of CFO
February 09 2004 - 7:30AM
PR Newswire (US)
Moore Wallace Announces Suspension of CFO James R. Sulat Named
Interim Chief Financial Officer MISSISSAUGA, Ontario and NEW YORK,
Feb. 9 /PRNewswire-FirstCall/ -- Moore Wallace Incorporated (TSX:
MWI) announced today that Mark Hiltwein, its Executive Vice
President and Chief Financial Officer, has been suspended with pay.
This suspension results from actions Mr. Hiltwein took late last
week in providing a misdated document to PricewaterhouseCoopers LLP
in connection with an investigation they were conducting. That
investigation focused on allegations in an anonymous letter
received by the Company in late December 2003 alleging misuse of
acquisition-related restructuring charges, together with vague
assertions of other accounting actions. At the direction of the
Audit Committee of the Company's Board of Directors,
PricewaterhouseCoopers immediately began an independent review of
the allegations of misconduct in the letter. PricewaterhouseCoopers
had largely completed their work and found noevidence to support
these allegations. As described below, based on information
available to the Company to date, it does not appear that this
matter will have any financial statement impact. Mr. Hiltwein, 40,
has been replaced as Chief Financial Officer on an interim basis by
James R. Sulat, Senior Executive Vice President of Moore Wallace.
Mr. Sulat, 53, who joined Moore Wallace in April of 2003, brings
extensive experience in corporate governance to the role of chief
financial officer. Prior to joining Moore Wallace, Mr. Sulat served
as Chief Financial Officer of Chiron Corporation. Prior to joining
Chiron, Mr. Sulat served as Chief Financial Officer of Stanford
Health Services. He was educated at Yale College and Stanford
University Graduate School of Business. He currently serves as
Chairman of the Audit Committee of each of Vans, Inc. and Maxygen,
Inc. As described above, PricewaterhouseCoopers had largely
completed their work and found no evidence to support the
allegations of misconduct in the anonymous letter. Although the
Company and the Company's outside auditors were satisfied with the
level of documentation supporting the restructuring charges,
PricewaterhouseCoopers asked the Company's accounting staff,
including Mr. Hiltwein, for any additional materials they had
supporting these restructuring charges. On Thursday of last week
Mr. Hiltwein directed another member of the accounting staff to
send to PricewaterhouseCoopers a memorandum about the Company's
restructuring processes and plans. This memorandum's dateline was
"May 2003" but was created by Mr. Hiltwein last week and appears to
be documentation of the kind PricewaterhouseCoopers was requesting.
PricewaterhouseCoopers detected that the document had been created
later than the dateline of the memorandum. The other member of the
accounting staff has also been suspended with pay pending
completion of the investigation of the misdated document. Although
the absence of clearly organized summary restructuring plan
documents at corporate headquarters was the subject of a
recommendation by PricewaterhouseCoopers for improvement and the
Audit Committee had directed Mr. Hiltwein to seek to improve this
area of corporate record keeping prospectively, it did not appear
to be a major shortcoming. The Company does not believe that the
non-existence of the memorandum created by Mr. Hiltwein would have
any effect on the Company's accounting for its restructuring
charges. The Company has spoken to Mr. Hiltwein and hehas stated
that the dating of this document was a mistake and poor judgment on
his part but that it was not the product of any intention to
deceive PricewaterhouseCoopers, the Audit Committee or anyone else.
When it was received, the anonymous letter was immediately
forwarded to the Audit Committee for any action it deemed
appropriate and also forwarded to the U. S. Securities and Exchange
Commission, the Ontario Securities Commission and the New York
Stock Exchange. The Company also has kept its combination partner,
RR Donnelley, informed regarding the allegations and their
investigation. The Company had agreed to provide documents
requested by the SEC in response to the anonymous letter. The
Company will, in all matters, cooperate fully with any regulatory
agency that wishes to investigate any matters within the agency's
jurisdiction. PricewaterhouseCoopers is taking additional actions
to confirm their earlier conclusions. The Company will report the
full findings of the PricewaterhouseCoopers investigation in an
expeditious manner. Mark A. Angelson, Chief Executive Officer of
the Company said, "We are extremely fortunate to have Jim Sulat as
a member of our corporate family. He is a proven leader and trusted
counsellor with an excellent reputation." Mr. Angelson continued,
"Mark Hiltwein's suspension should not be viewed as a conclusion
that he acted with an intention to deceive. Mr. Hiltwein has a
widely held reputation for personal integrity, and he has provided
long, excellentservice to the Company. However, Mr. Hiltwein's
conduct was unacceptable and in the circumstances the Board of
Directors has concluded to relieve him of his responsibilities
pending completion of a full investigation by our audit committee
and its independent advisors." About Moore Wallace Moore Wallace is
a leading single-source provider of print management and outsourced
communications, delivering to its customers one of the widest
arrays of products and services at one of the lowest total costs.
The Company operates in three complementary business segments:
Forms and Labels, Outsourcing and Commercial Print. The Forms and
Labels business designs, manufactures and sells paper-based and
electronic business forms and labels and provides electronic print
management solutions. The Outsourcing business provides
high-quality, high-volume variably imaged print and mail,
electronic statement and database management services. The
Commercial Print business produces high-quality, multi-color
personalized business communications and provides direct marketing
services, including project, database and list management services.
For more information, visit the Company's web site at
http://www.moorewallace.com/. Use of Forward-Looking Statements
Except for historical information, this news release contains
"forward- looking statements" as defined in the U.S. Private
Securities Litigation Reform Act of 1995. Readers are cautioned
that any forward-looking statements are based on current
expectations anddo not include the potential impact of any business
risks, opportunities or developments, market conditions or exchange
rate fluctuations that may occur after the date of this press
release. Forward-looking statements are not guarantees of future
performance or results and involve a number of assumptions, risks
and uncertainties that could cause actual results or developments
to differ materially from those in the forward-looking statements.
Readers are strongly encouraged to read the full
cautionarystatements described in the Company's filings with the
Securities and Exchange Commission (SEC), including the section
entitled "Management's Discussion and Analysis of Financial
Condition and Results of Operations" contained therein. The
Company's SECfilings are available at http://www.sec.gov/,
including the Company's Annual Report on Form 10-K for the fiscal
year ended December 31, 2002, and the Company's Canadian regulatory
filings are available at http://www.sedar.com/. The Company
disclaims any obligation to update or revise any forward-looking
statements. The Audit Committee of Moore Wallace's Board of
Directors has reviewed this press release. Additional Information
On November 8, 2003, R.R. Donnelley & Sons Company ("RR
Donnelley") and Moore Wallace Incorporated ("Moore Wallace")
entered into a definitive agreement to combine the two companies.
This communication is not a solicitation of a proxy from any
securityholder of Moore Wallace or RR Donnelley. Moore Wallace and
RR Donnelley have filed a Joint Management Information Circular and
Proxy Statement regarding the proposed transaction with the U.S.
Securities and Exchange Commission (SEC), and Moore Wallace has
filed the Joint Management Information Circular and Proxy Statement
with the Canadian securities regulatory authorities. WE URGE
INVESTORS IN RR DONNELLEY AND MOORE WALLACE TO CAREFULLY READ THE
JOINT MANAGEMENT INFORMATION CIRCULAR AND PROXY STATEMENT BECAUSE
IT CONTAINS IMPORTANT INFORMATION ABOUT RR DONNELLEY, MOORE WALLACE
AND THE PROPOSED TRANSACTION. Investors and securityholders may
obtain the Joint Management Information Circular and Proxy
Statement and any other relevant documents filed by RR Donnelley
and Moore Wallace free of charge at the SEC's website,
http://www.sec.gov/, and at the website of the Canadian System for
Electronic Document Analysis and Retrieval (SEDAR) maintained by
the Canadian Securities Administrators at http://www.sedar.com/. In
addition, investors and securityholders may obtain freecopies of
the Joint Management Information Circular and Proxy Statement filed
with the SEC by RR Donnelley by contacting RR Donnelley Investor
Relations, 77 West Wacker Drive, Chicago, IL 60601,Tel. (312)
326-8926. Investors and securityholders may obtain free copies of
the Joint Management Information Circular and Proxy Statement filed
with the SEC and SEDAR by Moore Wallace by contacting Moore Wallace
Investor Relations, One Canterbury Green, Stamford, CT 06901,Tel.
(203) 406-3298. RR Donnelley, Moore Wallace and their executive
officers and directors may be deemed to be participants in the
solicitation of proxies from RR Donnelley stockholders and Moore
Wallace securityholders in favor of the proposed transaction.
Information regarding the security ownership and other interests of
RR Donnelley's and Moore Wallace's executive officers and directors
is included in the Joint Management Information Circular and Proxy
Statement. Factors relating to the completion of the RR Donnelley
transaction and the integration of the businesses that could cause
material differences in the expected results of the combined
company include, without limitation, the following: the development
and execution of comprehensive plans for asset rationalization, the
ability to eliminate duplicative overhead without excessive cost or
adversely affecting the business, the potential loss of customers
and employees as a result of the transaction, the ability to
achieve procurement savings by leveraging total spending across the
organization, the success of the organization in leveraging its
comprehensive product offering to the combined customer base as
well as the ability of the organization to complete the integration
of the combined companies without losing focus onthe business. In
addition, the ability of the combined company to achieve the
expected revenues, accretion and synergy savings will also be
affected by the effects of competition (in particular the response
to the transaction in the marketplace), the effects of paper and
other raw materials and fuel price fluctuations and shortages of
supply, the rate of migration from paper-based forms to digital
formats, the impact of currency fluctuations in the countries in
which RR Donnelley and Moore Wallace operate, general economic and
other factors beyond the combined company's control, and other
risks and uncertainties described from time to time in RR
Donnelley's and Moore Wallace's periodic filings with United States
and Canadian securities regulatory authorities, as applicable.
Website: http://www.moorewallace.com DATASOURCE: Moore Wallace
Incorporated CONTACT: Investors, Julie K. Gottlieb of Moore Wallace
Incorporated, +1-203-406-3825, ; or Media, Kenny Juarez of The
Abernathy MacGregor Group, +1-212-371-5999, , for Moore Wallace
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