May 8, 2006
Zale Places CFO on Administrative Leave
Zale Corp. announced in a release tday that it has placed Mark Lenz, group senior vice president and chief financial officer, on administrative leave until further notice.
The company said it learned recently that Lenz failed to disclose to auditors that vendor payments of as much as $8.2 million, scheduled to be made during the last two weeks of the company's 2005 fiscal year last July, were delayed until the first week of August. According to Zale, the delay of the scheduled payments did not affect reported revenues or earnings, but did increase net cash flows from operating activities and free operating cash flow.
Zale says it has discussed the issue with the Securities and Exchange Commission and is reviewing the matter internally and with its auditors.
"The company's board of directors concluded that based on this information a change in chief financial officers was appropriate," said Betsy Burton, acting CEO.
George Mihalko, a retail industry veteran, has been appointed as acting chief administrative officer and chief financial officer effective immediately.