CyberGuard Corporation Announces Significant Corporate Events
Business Wire - August 24, 1998 10:24
FORT LAUDERDALE, Fla.--(BUSINESS WIRE)--Aug. 24, 1998--CyberGuard Corporation's (NASDAQ:CYBG) Audit Committee today announced that due to a review of its revenue recognition policies relating to distributors and resellers, the Company will restate financial results for its third fiscal quarter ended March 31, 1998.
CyberGuard currently estimates that the magnitude of the restatement is on the order of $2.5 million. It is expected that most of this restatement will be reflected in the third fiscal quarter results, but there is a possibility that some portion of this amount would be reflected in a restatement of the first and/or second fiscal quarter. Expectations for fourth fiscal quarter revenue will also be impacted negatively due to the application of these software revenue recognition policies related to distributors and resellers.
The Company today also announced that a Special Committee consisting of its four outside directors has assumed executive control of the Company. Mr. Shelly James has been appointed Chairman of this Committee and has been named acting Chairman of the Board of Directors. In addition, the Company announced that Mr. Robert Carberry, chairman and chief executive officer, and Mr. Bill Murray, chief financial officer, have been temporarily suspended from management pending the completion of the Special Committee's review, and that Mr. Brad Lesher, vice president of international sales, has announced his retirement.
CyberGuard also announced that KPMG Peat Marwick LLP (KPMG) had unexpectedly resigned at close of business on Friday August 21, 1998 as CyberGuard's independent auditors. The Company is reviewing the situation and stated that it is considering legal action against KPMG. The Company is presently seeking new auditors to complete the audit for the fiscal year ended June 30, 1998.
CyberGuard is currently seeking an additional source of capital for the Company's operations. Slow payments from customers (principally Asian) and the recent events described above have placed significant pressures on the Company's liquidity.
About CyberGuard
CyberGuard Corporation (NASDAQ:CYBG) is a leading provider of enterprise security and electronic commerce solutions to Fortune 1000 companies and governments worldwide. CyberGuard's award winning, industrial-strength firewall and certificate authority products and services protect the integrity of data and applications from unauthorized access. CyberGuard's newly acquired professional services subsidiary, Arca Systems, provides unparalleled security consulting expertise and conducts independent trusted product evaluations on behalf of the US Government's National Security Agency. The company has world headquarters in Ft. Lauderdale, Florida and branch offices worldwide. More information on CyberGuard Corporation can be found at cyberguard.com and tradewave.com and arca.com
Forward Looking Statements
Statements regarding estimates and future prospects contained in this press release are forward looking statements. These statements are based upon assumptions and analyses made by the Company in light of current conditions, future developments, and other factors the Company believes are appropriate in the circumstances, or information obtained from third parties, and are subject to a number of assumptions, risks and uncertainties, including without limitation, further review of the Company's financial statements by the Special Committee, by newly-engaged auditors and a review of the Company's internal management procedures. Readers are cautioned that forward-looking statements are not guarantees and that actual results might differ materially from those suggested in the forward-looking statements.
CONTACT: CyberGuard Corporation, Fort Lauderdale
Shelly James, 954/958-3900
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