| VERITAS delays financial restatements
VERITAS’s statement to the markets is as follows (verbatim): VERITAS Software Corporation (Nasdaq: VRTS) today announced that it will delay filing its annual report on Form 10-K for the year ended December 31, 2003, to restate the Company's financial statements for the years ended December 31, 2001 and December 31, 2002. The restatement is the result of an internal investigation, initiated by management and under the supervision of the audit committee of the Board of Directors, with the assistance of independent legal and accounting experts. The financial statements for the year ended December 31, 2003 will be revised to reflect corrections of the prior periods and the settlement finalized today of tax audits related to the Company's 2000 acquisition of Seagate Technology. On a preliminary basis, the restatement is expected to decrease 2001 revenues in the range of $1 million to $5 million from the previously reported $1.49 billion and to increase 2002 revenues in the range of $5 million to $10 million from the previously reported $1.51 billion. The Company expects that 2001 GAAP net loss will decrease and non-GAAP net income will increase in the range of $5 million to $10 million from the previously reported GAAP net loss of $642 million and non-GAAP net income of $291 million. The Company expects that 2002 net income will decrease in the range of $5 million to $10 million from the previously reported GAAP net income of $57 million and non-GAAP net income of $256 million. As a result of the adjustments to the prior periods, the Company also expects, on a preliminary basis, that revenues for the year ended December 31, 2003 will decrease in the range of $10 million to $15 million from the previously announced $1.77 billion. Net income for the same period is expected to decrease in the range of $15 million to $20 million from the previously announced GAAP net income of $274 million and non-GAAP net income of $353 million. A further, and unrelated, adjustment will be required by the settlement finalized today by federal taxing authorities of tax audits related to the Company's 2000 acquisition of Seagate Technology. This settlement will result in an increase to 2003 net income of approximately $95 million. The combined impact of these adjustments is expected to increase 2003 GAAP net income in the range of $75 million to $80 million. The restatement and other adjustments will not affect the Company's reported cash flows or cash balances for any of these periods. The investigation began as an internal matter reviewed in accordance with the Company's corporate governance processes, which ultimately led to an independent forensic accounting and legal investigation under the supervision of the audit committee of the Board of Directors. This investigation concluded on March 12, 2004 and identified certain accounting practices not in compliance with generally accepted accounting principles during 2002, 2001 and prior periods under the direction of former financial management. These practices included the incorrect deferral of professional services revenue and the unsubstantiated accrual of certain expenses, which had a positive impact in some periods and a negative impact in others. In addition, accounts receivables and deferred revenue were overstated by approximately $7 million at June 30, 2002. The expected adjustments for 2003 are primarily a consequence of correcting errors from the prior periods. "Upon conclusion of the investigation,
we decided that restating our reported financial statements was
the appropriate course of action," said Gary Bloom, president,
chairman and CEO. "The Company is committed to accurate financial
reporting and our financial leadership has been substantially improved
since the arrival of Ed Gillis, our chief financial officer, in
November 2002." The adjustments referred to in this announcement are preliminary estimates, and because the reaudit has not been completed further adjustments may be required for these or other periods. The Company expects to file its Form 10-K during the June quarter. The Company has notified the Securities and Exchange Commission of the internal investigation and will cooperate regarding this matter. As a result of the Company's delay in filing its Form 10-K for 2003, the Company expects to receive notification from NASDAQ that it is not in compliance with the filing requirements for continued listing on NASDAQ and that its securities could be subject to delisting from the NASDAQ National Market. In addition, the Company anticipates that NASDAQ may change the Company's trading symbol from "VRTS" to "VRTSE." The Company expects to remedy its filing deficiency before NASDAQ delists its securities, but there can be no assurance that NASDAQ will grant a request for continued listing.”
•Date:
16th March 2004 •Region: N.America •Type:
Article •Topic: BC
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