Atlas still in the cold

TORONTO, (Nov. 4, 2003) — Troubled freezer and logistics company Atlas Cold Storage has announced more problems with its 2002 and 2001 financial statements and may have difficulty making fourth-quarter payouts to unitholders. The news immediately sent the company’s stock tumbling 10 per cent on the Toronto Stock Exchange.

Auditor Ernst & Young LLP has found that additional adjustments to Atlas’s 2002 and 2001 financial statements “are expected to be necessary,” the trust said earlier this week. Atlas also said its request for its lenders to waive defaults on its term debt have been denied and won’t be granted until the restatements are completed.

The income trust’s units have fallen almost 40 per cent since the Labour Day weekend, when Atlas disclosed that it would restate its 2002 and 2001 financial statements after an internal investigation found irregularities.

The company — which operates North America’s second-largest network of temperature-controlled warehouses, as well as trucking assets that supply food distributors and grocery chains — announced then that it would discontinue some of its Canadian trucking operations. It cited that its main troubles were in Western Canada, particularly at TCT Logistics, which sold all its refrigerated trucking assets to Atlas after it went into receivership in January of 2002. Atlas also blamed the “loss of a large customer in the Chicago area after the customer’s decision to build its own capacity,” as another prime reason for its recent financial losses.

— From Canadian Press

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