If you’ve been following the fortunes of low-end application development tools and database vendor Gupta Corp (CI No 2,822, 2,827), recently re-named Centura Software Inc, you might have been a trifle bemused by the company’s latest results. Last month, Centura declared so-so first quarter financials for the period ending March 31, 1996. Revenues were none too shabby at $15.4m, although the company could muster a net profit figure barely in the black at $321,000. But at least Centura is in profit for a change. All well and good perhaps, until you realize that these are results in isolation. What about Gupta’s fourth quarter results for fiscal 1995, and hence its year-end financials, which appear to have vanished into thin air? We took up the issue with the company’s UK finance director Robert Gunn. It’s an intriguing story. Late last year when Gupta sacked its then auditor Arthur Andersen & Co after it dubbed the company’s current chief financial officer Richard Heap incompetent and withdrew its consent to the software vendor’s accounts for the whole of 1993 and 1994? Well, apparently, such a refusal still stands under US law, even after a new auditor takes over. When Price Waterhouse & Co stepped into the breach and took o ver as Gupta’s auditor, it then faced the mammoth task of re-auditing the company’s books for 1993, 1994 and 1995. So enormous was the effort involved that five months on, Price Waterhouse is still struggling with it, and hence there are no fourth quarter results for 1995. Added to this, is Centura’s change in accounting practice to a sell through model, that is, recognizing license revenue as and when it comes on-stream within an organization instead of all in one lump sum when the initial licensing deal is struck. We’re moving back towards the conservative end of the spectrum, says Gunn. It also gives us a smoother flow of revenues. Centura expects its missing results to surface publicly within the next few weeks. Then finally, we’ll be really able to assess just how bad a loss-making year 1995 was, given that the company has now upped its estimation of the restructuring charges it will bear in that year to $11m from $9m. However, since it got out the good news of its first profitable quarter for two years first, maybe this will go some way towards mitigating the bad news about last year.
