News / Utah / 

SCO Group Forced to Restate Earnings Reports

SCO Group Forced to Restate Earnings Reports



This archived news story is available only for your personal, non-commercial use. Information in the story may be outdated or superseded by additional information. Reading or replaying the story in its archived form does not constitute a republication of the story.

SALT LAKE CITY (AP) -- SCO Group has disclosed that auditors' discovery of accounting errors is forcing it to restate portions of its earnings reports for the first three quarters of fiscal 2004.

The disclosure in a special 8-K report to the Securities and Exchange Commission was released at the close of trading Thursday.

The Lindon, Utah, company, which is best known for its $5 billion lawsuit claiming IBM used portions of SCO's Unix code in a version of the freely distributed Linux operating system, has been tardy in filing its Form 10-K earnings report for 2004.

It had blamed the delay on auditors' questions about some employee stock options.

On Thursday, the company said that concerns extended to the three quarterly reports filed for fiscal 2004 and also for the last quarter, ended Oct. 31, for which a report has not yet been filed.

The 8-K form said the three quarters would be restated on the recommendation of management, with concurrence from the SCO board of directors' audit committee and the independent auditing firm KPMG LLP.

The company said the Form 10-K and amendments to the first three quarterly reports will be filed as soon as the company and its auditors complete their review. It did not say when it expected that to be.

SCO spokesman Blake Stowell said he could not comment beyond the content of the 8-K, which said that "anticipated corrections (do not) impact the company's previously reported net loss or its earnings per share for the fiscal year ended October 31, 2004 or its aggregate cash and available-for-sale securities balances as of October 31, 2004."

SCO said it would reclassify $1.06 million "related to certain shares of common stock that the company may have issued under its equity compensation plans without complying with the registration requirements of federal and applicable state securities laws."

SCO intends to reclassify from permanent equity to temporary equity amounts totaling $272,000 for first quarter 2004, $231,000 for the second quarter and $557,000 for the third quarter.

The company also plans to reclassify some $2.5 million in accrued dividends from preferred stocks in the first and second quarters of last year, and will restate $233,000 of stock-based compensation expense related to the same period.

(Copyright 2005 by The Associated Press. All Rights Reserved.)

SIGN UP FOR THE KSL.COM NEWSLETTER

Catch up on the top news and features from KSL.com, sent weekly.
By subscribing, you acknowledge and agree to KSL.com's Terms of Use and Privacy Policy.

KSL Weather Forecast