Washington, DC 4/16/18—Bio-Rad Laboratories had filed its SEC 10-K annual filing after delaying the report (see IBO 3/15/18). Regarding the assessment of internal control over financial reporting that initially delayed the filing, the company stated, “Our management believes that our enhanced post-conversion management review control activities and augmented user acceptance testing of system changes, which were designed to remediate the material weakness over financial reporting disclosed as of September 30, 2017, were sufficiently implemented as of December 31, 2017.”

The company also reported in the filing the immaterial misstatements to inventory, revenue and costs of goods sold, since corrected, related to the implementation of its European ERP system.  Consequently, the filing reads, “Because the deficiencies create a reasonable possibility of material misstatement in the annual or interim consolidated financial statements that will not be prevented or detected on a timely basis, they represent a material weakness in internal control over financial reporting and accordingly, our management concluded that our internal control over financial reporting was not effective as of December 31, 2017.” Bio-Rad announced an enhancement of “its control environment in the entities impacted by the ERP system conversion and European reorganization,” specifying several specific actions, including increased resources and monitoring.

Bio-Rad Laboratories initiated in the third deployment of its ERP system in Western Europe in April 2017, and reported related revenue disruptions in the second and third quarters, which were later recovered. The implementation follows the implantation of a new ERP system in the US.