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Veritas will restate financial results

Veritas Software is to restate its financial results for calendar years 2001 and 2002 and revise its results for 2003, citing an internal investigation into its finances.

The storage, utility and virtualisation software company will delay filing its annual report for 2003 with the US Securities and Exchange Commission so that it can include the restatements. 

The internal investigation, completed on Friday, "identified certain accounting practices not in compliance with generally accepted accounting principles during 2002, 2001 and prior periods under the direction of former financial management", the company said in a statement.

"These practices included the incorrect deferral of professional services revenue and the unsubstantiated accrual of certain expenses, which had a positive impact in some periods and a negative impact in others. In addition, accounts receivables and deferred revenue were overstated by approximately $7m at June 30, 2002." 

Gary Bloom, president, chairman and chief executive officer, said that restating financial statements was the appropriate course of action following the investigation.

"The company is committed to accurate financial reporting, and our financial leadership has been substantially improved since the arrival of Ed Gillis, our chief financial officer, in November 2002," he added. 

"While today's announcement is unfortunate, it does not change the fundamental strength of our business, as we drive the company to a target of $2bn in revenue in 2004. We remain comfortable with our guidance for the first quarter," he said.

 The company had earlier estimated that its revenue in the first quarter would be $455m to $470m.

Veritas will also revise financial reports to reflect tax audits related to Veritas' acquisition of Seagate Technology in 2000. 

Todd R Weiss writes for Computerworld


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