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To: Lizzie Tudor who wrote (52587)	8/30/2002 11:32:05 AM
From: hueyone	Respond to of 54805

re: PRGN This is not bad at all, and certainly better than expectations. How did you come to that conclusion? According to the Wall Street Journal the dollar size of PRGN's restatement is more than twice what the company had previously anticipated. And the 100 million expense for stock option compensation is on top of, not included in the 250 million, as I understand it. online.wsj.com Peregrine's Revenue Reduction To Total About $250 Million By EDUARDO PORTER Staff Reporter of THE WALL STREET JOURNAL Software manufacturer Peregrine Systems Inc., which has been reviewing potential accounting irregularities in its financial statements, said it will reduce its previously reported revenue by about $250 million over the last three years, more than twice the amount it had previously anticipated. The San Diego company said that, in addition, it will record a charge of about $100 million related to stock-option compensation. It added that it restructured about $103 million in accounts-receivable financing arrangements with three financial institutions, booking its factoring arrangements as loans instead of sales of receivables without recourse, as it did previously. In April, Peregrine replaced Arthur Anderson LLP with KPMG LLP as its independent auditor, and launched an investigation into its financial statements covering the fiscal years of 2000, 2001 and the first three quarters of the 2002 fiscal year. (The company's fiscal years end on March 31.) In May, the company announced that KPMG had discovered accounting inaccuracies which raised questions about roughly $100 million in revenue, and soon after replaced its chief executive officer and chief financial officer. The company didn't explain the cause for the new reduction in revenue. The figure disclosed Friday of $250 million is equivalent to nearly 20% of Peregrine's total stated revenue for the 11-quarter restatement period. The company said, however, that though the investigation into its accounts is complete and the results have been given to the staff of the Securities and Exchange Commission, the restatement process hasn't ended and the final amount could change. In May, Peregrine replaced its chief executive officer, Steve Gardner, and chief financial officer Matt Gless. Peregrine's new chief executive, Gary Greenfield, said in a statement Thursday that "our new management team is diligently identifying and correcting the past accounting irregularities, while working to avoid them in the future." A spokeswoman didn't return calls for comment. The company, which makes software that tracks corporate assets, among other products, said in May that the $100 million in revenue under question is from "indirect channels," meaning that it came via third-party partners that sell Peregrine's products to an end user. It stated that it used to record revenue on a "sell in" basis at the time of a sale to a third-party sales partner. Now it books revenue on a less-aggressive "sell through" basis, recording it on its accounts only when it has been sold to an end user. Shares in Peregrine plunged in May following reports of accounting irregularities. The company's announcement Thursday was made after 4 p.m. EDT, at which time Peregrine was down nine cents, or 15%, to 50 cents on the Nasdaq Stock Market. Updated August 30, 2002 Huey