Applix to Restate Revenues, Loses CEO

CEO Alan Goldsworthy resigns from Applix, which intends to restate certain of its historical financial statements.

Applix Inc., a software company that recently realigned its business around business performance management solutions, revealed Friday that it had to get its own financial house in order. And it will do so under new leadership

The Westboro, Mass., company announced that it intends to restate certain of its historical financial statements, regarding two separate customer agreements. Though both are valid customer agreements, company officials said, revenue from those agreements was not recognized properly.

The restatement is expected to defer revenue from the period in which it was originally recognized until a later fiscal period. As a result, Applixs financial statements for 2001 and the first three quarters of 2002 will be revised to properly account for revenue under a reseller agreement. Second, the company intends to restate its operating results for the second quarter of 2002 to defer approximately $340,000 in revenue relating to a licensing transaction by its German subsidiary, officials said.

The effect of the restatement is expected to reduce revenue in 2001 from $40.3 million to approximately $39.4 million and to increase Applixs net loss in 2001 from $9.9 million to approximately $10.8 million. For the first three quarters of 2002, the effect of the restatement will increase revenue from $26.4 million to between $26.4 million and $26.8 million and decrease the companys net loss from $3.2 million to between $2.8 million and $3.2 million, officials said.

Separately, Applix announced Friday that President and CEO Alan Goldsworthy has resigned from the company. Board member David Mahoney is stepping in to replace Goldsworthy on an interim basis until the company can find a permanent replacement. No explanation was given for Goldsworthys departure.

Goldsworthy led Applix through a transition from a provider of analytical CRM software to its current business performance management focus. The company sold its CRM software business to Platinum Equity LLC in January.

Due to the restatement and the executive change, Applix does not expect to report fourth quarter and 2002 earnings until late March. In the third quarter of 2002, Applix lost $2.4 million on nearly $8 million in revenues.

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