Network Associates Inc [NET] has finally completed a restatement of results that the company hopes will put a dismal period behind it. However, with the SEC and the Department of Justice still probing the company, it will be some time before it knows if it is completely in the clear.
The restatements, which have already led to a $70 million class action lawsuit, are huge. In the worst year, 1998, the restated revenue of $417.7 million is less than half of the $961.7 million the company claimed at the time.
The revised figures led to a permanent reduction in revenue totaling $112.6 million and a huge shift in revenue from early to later years after it acknowledged that revenue recognized on a sell-in basis was not appropriate in light of apparent concessions provided by the company during that period, including non-contractual return rights.
The California-based security and network management vendor was able to conduct a vigorous acquisition spree while feeding the market with misleading figures. The restatement means that in 1998 the net loss increased from $32.4 million to $319.1 million, but cuts the 1999 net loss by $4.9 million to $152 million, and reduces the 2000 net loss by $15.9 million to $108 million.
By 2000, when the new policy of recognizing revenue on a sell-through basis was in force, the net loss was cut by $15.9 million to $108 million, and a net loss of $100.7 million in 2001 become net income of $83.3 million. Net income in 2002 was boosted by $38.1 million to $128.3 million.
This article was based on material originally published by ComputerWire.