News on CS not anything too big but news.....
Cabletron accounting change ups intangible assets
ROCHESTER, N.H., June 3 (Reuters) - Cabletron Systems Inc. (NYSE:CS - news) said
Thursday it has increased intangible assets $125.7 million in an additional response to the
questions about its acquisition accounting.
The company said this amount will be amortized over the next five to ten years, adding noncash amortization charges will
increase about $4.5 million per quarter for the period.
It pointed out these charges will have no impact on the company's operating performance or cash flow.
In addition, Cabletron said, it revised reported results for the past three years, increasing the loss for the year ended February
1999, reducing 1998's loss and increasing fiscal 1997's profit.
The staff of the Securities and Exchange Commission has indicated, following these additional revisions, it has no further
comments on Cabletron Systems' financial statements.
As the company disclosed in mid-October, the SEC staff had commented on Cabletron's acquisition accounting, focusing on
the characterization and timing of charges and to the allocation of he purchase price between in-process research and
development and other intangible assets.
In connection with the acquisition of the Network Products Group of Digital Equipment Corp. in the fourth quarter of fiscal
1998, Cabletron said, it agreed to cut the in-process research and development allocation to $199.3 million from $325 million,
resulting in the $125.7 million increase.
Company officials were not immediately available to say when the five to ten year amortization period began.
Cabletron's statement pointed out these changes are in addition to the $33.2 million reduction in special charges recorded in
fiscal 1998's fourth quarter in connection with the acquisition. This reduction was reported in October.
The company said it has also reduced the amount of the purchase price allocated to in-process research and development in
connection with the fiscal 1999 acquisitions of the CSG division of Ariel, FlowPoint, and NetVantage to an aggregate of $67.4
million from $74.7 million, increasing the intangible asset allocation $7.3 million.
Cabletron said it has reduced its 1997 inventory write-down relating to the ZeitNet acquisition by $6.0 million, recording the
write-down in 1998 upon disposal of the inventory.
It said these changes are reflected in its Form 10-K filed Wednesday along with restatements of net income as follows:
-- 1997's net income was increased $4 million, or $0.02 per share, to $226.1 million, or $1.42 per share;
-- 1998's loss was reduced $92.1 million, or $0.59 per share, to $35 million, or $0.22 per share; and
-- 1999's loss was increased $5.4 million, or $0.04 per share, to $245.4 million, or $1.47 per share.
The 1999 change reflects the reduced charges for in-process research and development associated with the fiscal 1999
acquisitions of $7.3 million offset by increased amortization of intangible assets of about $18.0 million, the company said. |
