The filing for bankruptcy protection of one of its customers, New Global Telecom, Inc. (NGT) on May 25, 2001 in the United States Bankruptcy Court of the District of Delaware will result in net.com taking an additional reserve of $2.4 million. The reserve relates to a third party vendor financing program pursuant to which net.com sold narrowband equipment to NGT and guaranteed the amount that went on lease in 1998.
Offsetting that adjustment, net.com reached an out of court settlement of a dispute that will result in a reversal of an accounts receivable reserve that net.com had as of March 30, 2001 in the amount of $950,000. The total net effect is a $1.4 million decrease to the reported revenue for the fourth quarter of the fiscal year ended March 30, 2001.
As adjusted, net.com reports a restated fourth quarter net loss of $13.3 million, or $0.61 per share, for the fiscal year ended on March 30, 2001.
SOURCE: COMPANY PRESS RELEASE
