FYI Accounting changes due to barter credits
February 12, 1999 07:45
Datatec Announces Accounting Changes
No Affect on Current or Future Operations
TOTOWA, N.J., Feb. 12 /PRNewswire/ -- Datatec Systems, Inc. (Nasdaq: DATC) reported today that the Company recently received a
letter from the Securities and Exchange Commission (SEC) commenting on its recent reviews of the Company's Form 10-K for the
years ended April 30, 1998 and 1997 and the Form 10-Q for the quarter ended July 31, 1998. The results of the review do not affect
cash or cash flow nor do they negatively affect the Company's current or future operations.
The SEC provided comments on certain issues including the valuation of (1) convertible preferred stock and convertible debt with
warrants, both with beneficial conversion features, issued in fiscal 1997 and (2) assets associated with a barter transaction the
Company executed in fiscal 1998. The comments related to the barter transaction involved assets associated with the Company's
discontinued operations and not those associated with current operations. In addition, when the bartered assets are realized under
the SEC's position, they will benefit the Company's fiscal 1999 and future operating results. Accordingly, and although the Company
and its auditors believe that its original positions were appropriate at the date of the transactions, management has decided to adopt
the alternative positions provided by the SEC and to amend its 1998 and 1997 reports. The effect of these amendments are as
follows:
Fiscal Year Ended April 30,
1998 1997
As Reported As Amended As Reported As Amended
Operating income $517,000 $517,000 $1,538,000 $1,538,000
Interest expense (1,885,000) (2,135,000) (1,155,000) (1,730,000)
Income (loss) from
continuing
operations (968,000) (1,218,000) 702,000 127,000
Loss from
discontinued
operations (518,000) (2,768,000) (5,662,000) (5,662,000)
Net income (loss) $(1,486,000) $(3,986,000) $(4,960,000) $(5,535,000)
Basic income
(loss) per share (a) $(0.06) $(0.15) $(0.24) $(0.36)
Diluted income
(loss) per share (a) $(0.06) $(0.15) $(0.21) $(0.36)
(a) With respect to the beneficial conversion feature of the convertible
preferred stock issued and converted during fiscal 1997, there is no
change to the statement of income. Retained earnings, however, was
reduced by and paid in capital was increased by $2,128,000. The
amount of income available to the common shareholders for EPS purposes
was therefore reduced by a similar amount.
About Datatec Systems, Inc.
Datatec Systems, Inc. specializes in the rapid deployment of network and computing technologies of Fortune 2000 companies,
systems manufacturers, system integrators and independent software vendors. Datatec utilizes proprietary software tools and proven
methodologies to drastically reduce configuration and deployment time. Through accelerated IT implementation, Datatec helps its
customers improve business performance and ROI. Datatec Systems can be reached at 800-DATATEC. Additional information is
available from the Company's web site at datatec.com.
SOURCE Datatec Systems, Inc.
/CONTACT: James M. Caci, Chief Financial Officer of Datatec,
973-890-4800; or General Information, Kelly Lofts, Analyst Contact, Elisa
Mailman, Media Contact, Alan Goldsand, all of The Financial Relations Board,
212-661-8030/ |
