Sagent Technology Inc. will have to restate its revenues for the first nine months of the year after discovering that nearly $5 million worth of sales orders were forged, the business intelligence software developer reported late Wednesday.
The forged sales orders were all attributed to one sales person selling to government agencies out of the companys Washington, D.C., office. Sagent will pursue legal action against that employee.
But in the meantime, the Mountain View, Calif., company will have to reduce headcount by 20 percent and cut other expenses to make up for the revenue shortfall, which accounted for about a quarter of Sagents year-to-date license revenues, officials said.
Sagent is reducing its first quarter reported revenue from $11 million to $10.3 million, its second quarter reported revenue from $13.3 million to $12.5 million, and its previously announced third quarter revenue from $14.5 million to $11.4 million. The restatement increases the companys net loss to $30.2 million for the year, up from a previously reported $26.1 million.
Sagent still expects to break even in the second quarter of next year and have a positive cash flow by the third quarter, officials said. The company said it had discovered no other fraudulent sales orders and did not expect to.