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.
