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September 29, 1998


By CBR Staff Writer

Cendant Corp, the giant direct marketing company dogged by accounting irregularities, has filed its restated figures for the last three financial years, revealing that 1997’s profit of $55.4m has now been downgraded to a $217.2m loss. Additionally the company has warned that changes to its accounting policies, forced on it by the Securities and Exchange Commission, will adversely impact results for the current year, reducing earnings by between 7 and 9 cents per share. Parsippany, New Jersey-based Cendant operates a consumer club where members pay an annual fee to shop for a wide variety of goods at discount prices, with an increasing emphasis on the internet as the primary sales channel. The drive towards internet sales was championed by Walter Forbes, the former chairman of CUC International Inc, which merged with HFS Inc to form Cendant last year. Forbes’ ambition was to use the internet to, sell every credit-worth house in the world – everything. Forbes, however, was replaced earlier this year after ‘financial irregularities’ were exposed in April, shortly after the merger. Cendant’s shares have fallen from high of $41 before the troubles began, to a little over $12. But with the revised, audited figures now available, investors may well begin to look at Cendant as a buying opportunity. The company said it had experienced significant growth in membership sales through 1998.

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