System Controls Delays Expansion Due to Problems
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ANAHEIM — System Controls Inc., a manufacturer of energy management systems, said it will suffer financial problems through 1996 and has postponed expansion plans in the wake of financial irregularities within one of its divisions.
System Controls said an internal investigation has concluded that the Hogan Sales distributor division will have to restate its 1994 financial results and report losses for both 1994 and 1995. The company said the division’s revenue has been overstated and expenses were calculated inappropriately.
Specific financial information was not made available, but the company characterized the problems as “some fundamental financial reporting errors” and said the investigation should be complete in July.
System Controls also said Hogan had losses related to one of the division’s major product suppliers. During the 1994 fiscal year, the vendor failed to supply certain products to Hogan, and certain deliveries were delayed or canceled.
System Controls said it is examining ways to restructure its divisions and reporting systems.
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