An already choppy recovery at The Phoenix Cos. has suffered a setback as the Hartford company said it will not file an annual report on time and will not meet the timetable it set last fall to restate financial statements from 2009 through the middle of 2012.
Phoenix said on Nov. 8 that it would finish the restatements prior to the deadline for its 2012 annual report, which normally would mean this month. Late Friday, the company said it will have an update by April 30, but it did not promise a new date for the restatements or the annual report.
“We are making substantial progress in completing the restatement and closing the third and fourth quarters of 2012, but even with a significant level of dedicated resources, the scope and breadth of the work involved is much more time consuming than we originally anticipated,” said James D. Wehr, chief executive officer, in a written release.
Shares of Phoenix were down 23 cents to $$28.72 in late morning trading on the New York Stock Exchange. Shares had drifted downward for most of 2012 from a high above $50 to $21.58 in late November, before stabilizing.
In its announcement Monday, Phoenix offered some financial updates. Annuity deposits were $193.2 million for the fourth quarter of 2012 and $830 million for the full year. Annuity funds under management were $5 billion at the end of 2012, after net annuity flows (deposits less surrenders) of $62 million for the fourth quarter and $294.6 million for full year.
Phoenix Life Insurance Co., the main subsidiary, had $113 billion of coverage in place and a surplus and reserve of $922.5 million on Dec. 31, up from $846 million a year earlier.
The restatements at Phoenix are intended “to correct certain errors relating to the classification of items on the consolidated statement of cash flows in the prior periods,” the company said Monday. The company said it “also has identified additional errors affecting prior periods,” but said it estimated the impact of corrections to shareholders’ equity as of June 30, 2012 would be less than 1 percent of the previously reported amount.
The 162-year-old life insurer suffered a massive stock collapse in late 2008 and early 2009, after multiple ratings downgrades and the loss of its main distribution partner, State Farm. Wehr took over as CEO from Dona Young in April of that year.
Last August, Phoenix executed a 1-for-20 reverse stock split.
The company has not yet scheduled an annual shareholders meeting for 2013. “Phoenix continues to assess its disclosure controls and procedures and internal control over financial reporting, and believes it has identified multiple material weaknesses,” the company said Monday.