2013 Tesla Model S

Tesla Motors delays yearly 10-K SEC filing, investors yawn

When a company misses deadlines to file financial reports it's a big red flag, but when Tesla failed to file it's fiscal year 2012 SEC report the investors yawned and sent the stock price up 2.4%.
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Tesla Motors announced on Monday they were unable to file the annual financial report with the SEC on time. These filings are required every three months from all U.S. public companies and it's always viewed suspiciously when a company misses the filing deadline. In the case of Tesla Motors, this specific filing is being closely watched for signs whether Tesla will finally become financially stable, or whether it will crash and burn. Will the company continue being dependent on investors to pony up capital to keep Tesla open, or will sales reach high enough that the company can stand on its own two feet?

The filing submitted to the SEC today said Tesla was "unable to timely file its Annual Report on Form 10-K" because a final review of that filing found "a probable error in the presentation of certain non-cash items relating to capital expenditures on its consolidated statements of cash flows." The filing goes on to say there is "no impact on previously reported total cash and cash equivalents, consolidated income statements, consolidated balance sheets, or free cash flows." Instead the company management believes that "some unpaid capital expenditures in 2011 and 2012 would be more accurately classified as operating activities, rather than investing activities."

As a result management says that for the 2011 and 2012 fiscal years, they will be restating results from those years to shift money from "cash flows used in investing activities" to "cash flows used in operating activities." The amounts in question are $15 million for 2011 and $31 million for 2012.

We get the image of an green eye shades wearing accountant in the back room overly concerned with some minutiae or other. And that, as a result, some numbers had to be shifted from one place in the balance sheet to another.

Tesla's stock (TSLA) opened sharply higher today and has remained all day long with a 2.5% or so gain. We can read from this that, well, this isn't an issue for the investors.

In late February the company did release a letter to shareholders that went over some of the ground that is covered in an SEC filing. See Tesla outlook bright for 2013 despite missing 2012 Model S sales estimates. That letter presented the picture that Tesla is financially rounding the corner, and that sales are beginning to be enough to fund the company. But it was not in the format of an SEC filing and did not contain a complete picture of Tesla's status. The answer to the questions above will only come from the SEC filings.


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