VCA Antech Inc. of Los Angeles today reported revised financial results to reflect an incremental $14.5 million non-cash charge primarily linked to consulting agreements and supplemental executive retirement programs (SERPs) entered into with the company’s senior executive officers in June.
The revised results include net income of $30.5 million for the second quarter ended June 30 and net income of $63.4 million for the six months.
VCA Antech reported second-quarter results July 22 that did not include the compensation charges associated with the consulting agreements. The company had reported second-quarter net income of $39.4 million on revenue of $353.9 million, compared to $39 million and $344.9 million, respectively, in the year-ago period. Year to date, the company had reported net income of $72.3 million on revenue of $684.7 million, compared to $71.8 million and $660.7 million, respectively, in the year-ago period.
“Following further analysis of applicable accounting literature, and after further consultation with its outside auditors, the company determined that it should accrue the full cost of the benefits under the consulting agreements, the SERPs and outstanding share awards for two of the executives on the date the agreements were executed during the second quarter of 2010,” according to a VCA Antech statement. “Costs associated with the consulting agreements and SERPs of the other two officers will be accrued during future periods in light of the different effective dates and vesting periods applicable to those agreements.”
VCA Antech said it entered into consulting agreements with founders Bob Antin, Art Antin and Neil Tauber and Chief Financial Officer Tomas Fuller in June.
“The agreements are part of a long-term succession plan securing for the continued benefit of the company the unique competencies and networks of each of the senior executive officers following the time that they ultimately step down from their current officer positions during a phase-down period leading to their ultimate retirement,” according to VCA Antech.
VCA Antech noted that none of the senior executive officers has announced any intention to retire or step down from their officer positions.
For the July 22 story on VCA Antech's second-quarter results, click here.