The fundamentals were great, until they were fantasy. Chart would have told you something was VERY wrong before the numbers did.
Peregrine Eyes Accounting; CEO, CFO Quit
SAN DIEGO (Reuters) - Software maker Peregrine Systems Inc. (NasdaqNM:PRGN - news) on Monday said it was investigating potentially inaccurate accounting, and at the same time said its two top executives have resigned.
Shares were off sharply in premarket trade. The stock fell to $1.30, off from a close of $2.57 on Friday.
The company said the focus of the probe questions the accounting of up to $100 million of revenue recorded during fiscal 2001 and 2002. The $100 million is a preliminary estimate of the amount of revenue involved.
The potential accounting problems were flagged by KPMG, which the company hired in April to replace Arthur Andersen to serve as its independent auditor.
Transactions were recorded initially as revenue from indirect channels and may have been written off in later quarters, Peregrine said.
The board also said Chairman and Chief Executive Steve Gardner and Chief Financial Officer Matt Glass had resigned. Executive Vice President Rick Nelson was named acting CEO and a board member. Fred Gerson, CFO of the San Diego Padres pro baseball team, was named acting CFO.
Peregrine also named John Moores as chairman of the board. Moores had previously served as chairman between March 1990 and July 2000.
This is not the first time that Peregrine shares have taken a hit from concerns about its accounting. On April 30, the company delayed the release of its fiscal fourth-quarter and full fiscal 2002 results because KPMG needed more time to complete work taken over from Arthur Andersen. That news sent shares plunging more than $3 to $3.80 the next day.
The company's fiscal year ends in March.
Peregrine joins a list of former Arthur Andersen clients to face questions about their accounts, including Global Crossing Ltd. (Other OTC:GBLXQ.PK - news) and Enron Corp. (Other OTC:ENRNQ.PK - news)
KPMG, hired in April to replace Arthur Andersen, the former auditor of bankrupt energy company Enron, discovered the potential accounting problems in its audit of the company's recently completed fiscal year, Peregrine said. |
