Ariba to Further Restate Financial Results

 
 
By Renee Boucher Ferguson  |  Posted 2003-01-15 Print this article Print
 
 
 
 
 
 
 

The software developer said none of the changes affect its cash balances for any period.

Spend management software developer Ariba Inc. announced Wednesday that it will make additional restatements to its financial results for the 2000 and 2001 fiscal years because of an ongoing accounting issue. The company said none of the changes affect its cash balances for any period. Ariba, of Sunnyvale, Calif., also announced Wednesday that it expects a delisting notice from the Nasdaq Stock market as a result of failing to timely file its annual report for fiscal year 2002.
Until the review is complete, the company will delay filing its annual report for 2002—which was due Dec. 30, 2002—officials said.
The review is focusing primarily on a $10 million payment to Larry Mueller, the companys former president and CEO. Aribas chairman and co-founder Keith Krach authorized the payment. Because no company funds were used and there was no commitment from Ariba, the company originally viewed the payment as a personal transaction, officials said. Ariba said its audit committee has now decided to treat Krachs $10 million payment to Mueller as a capital contribution to the company from Krach and a payment of compensation from the company to Mueller. Also in question are some chartered air services, totaling $1.2 million, provided by Krach to Mueller. Ariba determined the services should be treated as a capital contribution from Krach to Ariba and a payment of compensation from the company to Mueller. At the same time, stock options that were issued to "a limited number of officials" by companies Ariba acquired in 2000 that were initially accounted for as goodwill are now being considered as a stock-based compensation expense to Ariba. Company officials said the cumulative adjustments related to the stock options amount to about $7.5 million and consist of increases to Aribas expenses for fiscal 2000 and 2001 of $8.7 million and $12 million, and a reduction in expenses for 2002 of $13.2 million.
 
 
 
 
 
 
 
 
 
 
 

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