Monday June 25, 4:34 pm Eastern Time
Cruise line accused of inaccurate fin'l reporting
WASHINGTON, June 25 (Reuters) - Federal regulators said on Monday that they have accused American Classic Voyages Co. (NasdaqNM:AMCV - news) of filing an inaccurate and misleading quarterly report in 1999 regarding how it treated advertising costs.
American Classic, which provides overnight cruises in Hawaii and along the coasts of North and South Americas, agreed to an order by the Securities and Exchange Commission to cease and desist from further alleged violations.
The Chicago-based company was not fined. It did not admit or deny guilt in agreeing to the SEC order.
The SEC alleged that the company improperly capitalized advertising costs instead of expensing those costs as it had in previous quarters.
In doing so, the company deferred the costs in its financial statements from the first quarter of 1999 and into later quarters in that year.
The company reported first-quarter losses of $4.5 million, or 32 cents per share, but without the capitalization, losses would have been a steeper $6.3 million, or 44 cents per share, the SEC alleged in the order.
``Advertising costs were a significant expense for American Classic,'' the SEC said, adding that capitalization reduced the company's net loss by 29 percent.
Furthermore, the SEC alleged, the change in treating advertising costs from previous quarters should have been disclosed.
An attorney representing the company declined to comment.
Its shares were 20 cents lower, or less than 6 percent, at $3.30 on Nasdaq in late afternoon trading. They have been as high $21.81 and as low as $3.15 in the past 52 weeks.
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