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Technology Stocks : Novell (NOVL) dirt cheap, good buy? -- Ignore unavailable to you. Want to Upgrade?

To: ToySoldier who wrote (22188)	5/21/1998 6:51:00 PM
From: Spartex	Read Replies (2) \| Respond to of 42771

OT ToySoldier, I'm with you on that!!! Just give me a few weeks heads up if you ever come down south! Some Off-Topic but related news on IFMX and their accounding practices that I'm sure George P. can comment on as he's in the accounting business, and as it may/may not relate to NOVL.......QuadK Toy, was this the CNBC software disaster news???? Informix can't win for losing By Dawn Kawamoto Staff Writer, CNET NEWS.COM May 21, 1998, 1:15 p.m. PT Database maker Informix, which is struggling to turn itself around and rebuild Wall Street's confidence after having to restate its financial results going back several years, said it now must restate its first-quarter profits to reflect a loss. The move comes after Informix had posted back-to-back profits in the first and fourth quarters, taking analysts--who had expected a loss--by surprise. Informix said it will restate its previously announced first-quarter profits of $4.9 million to reflect a loss of $400,000, a company spokesman said. Revenues, which previously were reported at $167.2 million for the first quarter, will be reduced by $6.2 million. That $6.2 million, however, will be evenly deferred over 1998 and 1999. Although Informix revamped its revenue-recognition policies last November to make them more conservative, the figures now being restated fell into a category whose revenue-recognition method hadn't been revised. Software sales to industrial manufacturers like Octel Communications were counted as a sale to an end user. But because industrial manufacturers like Octel incorporate Informix software into their products before shipping them to their customers, the spokesman said Informix was told by its former auditors, Ernst & Young, that the transaction should have been accounted for as a sale to a reseller, rather than to an end user. As a result, Informix agreed to count revenues only after its products are shipped to the customers of its industrial manufacturers, a strategy that is considered more conservative. Industrial manufacturers represent less than 3 percent of Informix's overall revenues. Ernst & Young raised its concerns about Informix's current accounting practices a day after it was dismissed as the company's auditor. Ernst & Young served as Informix's auditors during the period in which Informix was forced to restate its results from prior years. Informix chief financial officer Jean-Yves Dexmier said the move to restate the first-quarter results should send a strong message to Wall Street that Informix is a conservative company when it comes to counting its revenues. "We didn't want an open debate, or questions on whether this company is conservative," Dexmier said. "We decided to take action immediately so that we could send a strong message." One analyst applauded the company's decision to restate the first-quarter results and said the restatement should not affect Informix's relationship with Wall Street. "It really appears that management is trying to clean up all its accounting irregularities," said Stephen Dube, an analyst with Wasserstein Perella Securities. "This incident is just one that passed through the door, but one they are trying to clean up." He added that Informix management is working to be "pristine pure" when it reports its quarterly results. Dube said the restatement will not prompt him to change his recommendations or earnings estimates on the company. The Securities and Exchange Commission, meanwhile, is reviewing the "3.5 tons" of documents that Informix sent the agency for its pending investigation of the company. The materials cover four years of Informix's financial data. Dexmier said Informix is cooperating with the SEC and does not know when the matter will be resolved.