Quintus Announces Findings to Date of Audit Committee's Investigation and Termination of Chief Executive Officer
FREMONT, Calif.--(BUSINESS WIRE)--Nov. 22, 2000--The Quintus Corporation (Nasdaq:QNTS) Board of Directors today announced the findings to date of its Audit Committee investigation. The investigation, announced on November 15, 2000, is focused on certain financial reporting matters related to revenue and accounts receivable. The Audit Committee has concluded that revenue was improperly recognized for three transactions with respect to which the company relied on falsified documentation. As a result:
-- Revenues of approximately $4.5 million, reported and
recognized in Q3 FY 2000 as part of an agreement with a large
outsourcing company, will be removed from Quintus' financial
statements. The investigation found the revenue and
corresponding receivable were based on falsified
documentation.
-- Revenues of approximately $2 million from an end-user license,
reported and recognized in Q1 FY 2001, were inappropriately
recognized based on falsified documentation. While there was a
valid order, certain performance obligations required for
revenue recognition have yet to be satisfied.
-- Revenues of approximately $7 million, included in the earnings
release of October 17, 2000, were inappropriately recognized
based on falsified documentation. Quintus now believes that
the controlling contract, which is a master distribution
agreement, was in fact entered into after September 30, 2000,
and recognition of revenues under that contract will depend
upon the receipt of appropriate purchase orders.
Based on these findings, the company's previously issued financial statements for the year ended March 31, 2000, and the auditors' report thereon should not be relied upon. In addition, the company's unaudited financial statements for the quarter ended June 30, 2000, should not be relied upon. Further, the company's earnings release of October 17, 2000, will be revised. Quintus will restate these previously issued financial statements and results.
The Board also announced that it has terminated Chairman and Chief Executive Officer Alan Anderson for cause. Sue Salvesen has relinquished her responsibilities as chief financial officer and will assume the role of chief administrative officer. The company has begun the process of identifying candidates to fill the chief financial officer role as promptly as possible.
"Now that the Audit Committee has announced the findings to date of its investigation of these improper transactions, the Audit Committee and the company will work with our professional advisors to examine our financial statements in an effort to address any other issues that might exist and to conclude this process. We will also be reviewing our company's internal financial controls and accounting procedures," stated Acting Chief Executive Officer Paul Bartlett. "We are committed to addressing the concerns raised by the investigation thoroughly and forthrightly, and completing our review as efficiently and expeditiously as possible. While this is a difficult time for all involved, our business continues to benefit from superior technology, products and personnel."
The company will be holding a conference call with the press and financial analysts at 9:00 a.m. PST/12:00 p.m. EST/5:00 p.m. GMT today. The call is available live and through replay via www.streetfusion.com. Choose the "Special Events" tab.
About Quintus
Quintus Corporation (Nasdaq:QNTS) provides a comprehensive electronic customer relationship management (eCRM) solution that enables companies to increase revenue potential by improving customer satisfaction and loyalty. A technology innovator, Quintus offers products that manage all customer interactions, such as customer orders, inquiries and service requests, and allow delivery of consistent customer service across multiple communications channels, including the Internet, e-mail and telephone. Quintus is based in Fremont, California with additional offices throughout North America, Europe and Asia. For more information, call 800/337-8941, email sales@quintus.com or access the World Wide Web at www.quintus.com.
This press release contains forward-looking statements within the meaning of Section 21E of the Securities and Exchange Act of 1934, including statements regarding our anticipated investment in marketing, training and support and the development of our indirect sales channels. Our actual results may differ materially from the results discussed in the forward-looking statements due to a variety of factors, including, among others, risks and uncertainties related to our reliance on sales of a limited number of products, our ability to attract, train and retain qualified sales personnel, our reliance on indirect sales channels and competition in our markets. For a discussion of these and other factors that may cause our actual results to differ materially from our forward-looking statements, we refer you to the periodic reports and other documents we file from time to time with the Securities and Exchange Commission.
Note to Editors: Quintus is a registered trademark of Quintus Corporation. All other trademarks and registered trademarks are the property of their respective owners.
CONTACT:
Quintus Corporation
Paul Bartlett, 510/624-8738 (Investors)
Acting Chief Executive Officer
investor.relations@quintus.com
or
Mary Wallace, 415/986-9500 ext.246 (Press)
Fitzgerald Communications for Quintus
mwallace@fitzgerald.com
KEYWORD: CALIFORNIA
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