SYDNEY, Australia and NEW YORK, Jan. 20, 2013 (GLOBE NEWSWIRE) -- Sims Metal Management Limited
(the "Company") (ASX:SGM) (NYSE:SMS) advises the market that it has identified that the carrying
value of inventory in its UK business is materially overstated. The inventory in question is
predominately associated with the Company's Recycling Solutions business at Long Marston and
Newport. Based on information received by Senior Management and the Board, the Company currently
believes the inventory adjustment to be circa $60 million and relates to both changes in the
assessment of the net realizable value of certain stock and to book to physical adjustments. The
preliminary findings indicate the situation has arisen in the context of control failures and
potential fraudulent conduct by local and regional plant management responsible for technology and
downstream processing systems in the UK.
A Special Committee (the "Committee") of the Board has been formed to take responsibility for the
investigation that is in progress. The Committee is headed by Chairman Geoff Brunsdon and includes
Gerald Morris, Jim Thompson, Heather Ridout and John DiLacqua. As well as Group CEO Daniel Dienst
and Group CFO Rob Larry, the Committee is working closely with the Company's external auditor
PricewaterhouseCoopers ("PwC"), and its legal counsel Baker & McKenzie.
The detailed investigation is being performed by the Company's Group internal audit team in
conjunction with PwC reporting to the Committee. The immediate priority of the Committee is to
determine the amount of the adjustment and impact on the Company's accounts. The Committee will
also be responsible for understanding where the breakdowns in the Company's control environment
occurred, what initiatives will need to be taken to improve those controls, as well as overseeing
the implementation of the recommendations it makes. The Committee will also determine what action
will be taken in relation to any employees or third parties determined to be responsible. The
Committee will have access to whatever external support it requires.
Independent of the inventory valuation issue, the Company also advises that it has determined
there is a triggering event under AASB 136 (Impairment of Assets) at 31 December 2012 and that it
expects there will be recognition of goodwill impairment in the first half results.
The Company expects to provide further information in relation to the inventory adjustment and
potential goodwill impairment in conjunction with the release of its half year results.
Cautionary Statements Regarding Forward-Looking Information
This release may contain forward-looking statements, including statements about Sims Metal
Management's financial condition, results of operations, earnings outlook and
prospects.Forward-looking statements are typically identified by words such as "plan," "believe,"
"expect," "anticipate," "intend," "outlook," "estimate," "forecast," "project" and other similar
words and expressions.
These forward-looking statements involve certain risks and uncertainties. Our ability to predict
results or the actual effects of our plans and strategies is subject to inherent uncertainty.
Factors that may cause actual results or earnings to differ materially from these forward-looking
statements include those discussed and identified in filings we make with the Australian
Securities Exchange and the United States Securities and Exchange Commission ("SEC"), including
the risk factors described in the Company's Annual Report on Form 20-F, which we filed with the
SEC on 12 October 2012.
Because these forward-looking statements are subject to assumptions and uncertainties, actual
results may differ materially from those expressed or implied by these forward-looking statements.
You are cautioned not to place undue reliance on these statements, which speak only as of the date
of this release.
All subsequent written and oral forward-looking statements concerning the matters addressed in
this release and attributable to us or any person acting on our behalf are expressly qualified in
their entirety by the cautionary statements contained or referred to in this release. Except to
the extent required by applicable law or regulation, we undertake no obligation to update these
forward-looking statements to reflect events or circumstances after the date of this release.
All references to currencies, unless otherwise stated, reflect measures in Australian dollars.
About Sims Metal Management
Sims Metal Management is the world's largest listed metal recycler with approximately 270
facilities and 6,600 employees globally. Sims' core businesses are metal recycling and electronics
recycling. Sims Metal Management generated approximately 88 percent of its revenue from operations
in North America, the United Kingdom, Continental Europe, New Zealand and Asia in Fiscal 2012. The
Company's ordinary shares are listed on the Australian Securities Exchange (ASX:SGM) and its ADRs
are listed on the New York Stock Exchange (NYSE:SMS). Please visit our website (www.simsmm.com
) for more information on the Company and recent developments.
The Sims Metal Management logo is available at
CONTACT: Investor inquires contact
Group Vice President - Investor Relations
Tel: +61 4 0960 0352
Media inquiries contact
Group Director - Communications & Public Relations
Tel: +1 212 500 7430