UNITED
STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT
REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act
of 1934
Date of Report
(Date of earliest event reported)
March 4, 2008
STERLING
CHEMICALS, INC.
(Exact name of registrant as specified
in its charter)
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| Delaware |
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000-50132 |
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76-0502785 |
| (State or other jurisdiction of |
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(Commission File No.) |
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(IRS Employer Identification No.) |
| incorporation) |
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| 333 Clay Street, Suite 3600 |
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77002-4109 |
| Houston, Texas |
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(Zip
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| (Address of principal execute offices) |
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(713) 650-3700
(Registrant’s telephone number,
including area code)
Not
Applicable
(Former names or former address, if changed since last
report)
Check the appropriate box below if the
Form 8-K filing is intended to simultaneously satisfy the filing obligation of
the registrant under any of the following provisions:
o Written communications pursuant to Rule 425 under
the Securities Act (17 CFR 230.425)
o Soliciting material pursuant to Rule 14a-12 under
the Exchange Act (17 CFR 240.14a-12)
o Pre-commencement communications pursuant to
Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
o Pre-commencement communications pursuant to
Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
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| Item 4.02 (a) |
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Non-Reliance on Previously Issued Financial Statements or a Related
Audit Report or Completed Interim Review |
On March 3, 2008, the Audit
Committee of the Board of Directors of Sterling Chemicals, Inc.
(“Sterling”), in conjunction with Sterling’s management, concluded
that Sterling’s previously filed consolidated financial statements and other
financial information and the related reports of its independent registered
public accounting firm as contained in our Annual Reports on Form 10-K for the
fiscal years ended December 31, 2006, 2005, 2004 and 2003 and our condensed
consolidated financial statements contained in our Quarterly Reports on Form
10-Q for the previously mentioned fiscal years and for the quarter ended
September 30, June 30 and March 31, 2007 (collectively, the
“Financial Statements”) should no longer be relied upon and should be restated
due to the following errors:
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Paid-in-kind dividends on our Series A Preferred Stock were
incorrectly recorded as 4% of the Series A Preferred Stock’s
liquidation value versus the fair value of the dividends. As a result of
this error, redeemable preferred stock was understated and additional
paid-in capital was overstated by approximately $32 million,
$29 million and $27 million as of September 30,
June 30, and March 31 2007, respectively, and by approximately
$26 million, $22 million, $12 million, and $5 million as of
December 31, 2006, 2005, 2004 and 2003, respectively, and preferred
stock dividends and net loss attributable to common shareholders was
understated by approximately $3 million, $2 million and
$1 million for the three months ended September 30, 2007,
June 30, 2007 and March 31 2007, respectively, and by
$4 million, $10 million, $7 million and $5 million for
the fiscal years ended December 31, 2006, 2005, 2004 and 2003,
respectively. |
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Disputed revenues were inappropriately recognized resulting in a gross
up of the consolidated statements of operations for the fiscal year ended
December 31, 2006 and for the quarterly periods ended
September 30, June 30, and March 31 2007. Revenue and
selling, general and administrative expenses were overstated by
$1.0 million, $1.0 million, $1.0 million and
$1.6 million for the three months ended September 30, 2007, June
30, 2007, March 31 2007 and the fiscal year ended December 31,
2006, respectively. Accounts receivable and allowance for doubtful
accounts were both overstated by approximately $2.5 million,
$2.0 million, $1.5 million and $1.6 million as of
September 30, 2007, June 30, 2007, March 31, 2007 and
December 31, 2006. |
These errors did not impact Sterling’s
previously reported cash and cash equivalents or cash flows. As part of the
restatement process, Sterling is continuing to assess the estimated adjustments
identified above and will assess any other potential items for correction as
needed. Further, Sterling is evaluating the impact of these errors on our
internal control over financial reporting and disclosure controls.
Sterling has concluded that the
restatement of the Financial Statements will be reflected in Sterling’s 2007
Annual Report on Form 10-K expected to be filed by March 31, 2008. Sterling
will restate the affected condensed consolidated financial statements within our
quarterly reports on Form 10-Q on a prospective basis.
The Audit Committee of the Board of
Directors of Sterling discussed the matters disclosed in this Item 4.02(a)
with Sterling’s independent registered public accounting firm.