ObjectShare Posts Loss, Restates Earlier Results
Citing an internal accounting problem, troubled Irvine software maker ObjectShare Inc. said Tuesday that its third-quarter losses more than doubled from a year ago, and that restated results from the first two quarters turned small profits into sizable losses.
For its third quarter ended Dec. 31, the company lost $1.1 million, or 9 cents a share, compared with a $417,000 deficit, or 3 cents a share, a year earlier.
Revenue fell 18%, to $4 million, from $4.9 million a year earlier.
Company officials said they discovered an accounting discrepancy while compiling ObjectShare’s third-quarter results. They blamed the problem on its staff incorrectly counting revenue from software licenses, as well as failing to properly account for software development costs.
ObjectShare officials declined to elaborate Tuesday.
According to regulatory filings, the company’s adjusted report cut out nearly $1.7 million worth of licensing revenue from its first six months of earnings. Additionally, the firm had to tack on nearly $450,000 worth of development costs that were originally capitalized.
The company said the discrepancy was partly due to not following software industry changes in accounting procedures.
ObjectShare’s restated earnings show a net loss of $778,000, or 6 cents a share, on revenue of $3.7 million for its first fiscal quarter ended June 30. Previously, the company had posted a $29,000 profit on $4.5 million in revenue. A year earlier, it lost $2.5 million, or 21 cents a share, on revenue of $5.1 million.
For the second fiscal quarter ended Sept. 30, the company’s restated results came to a loss of $490,000, or 4 cents a share, on sales of $3.9 million. Previously, ObjectShare had reported a $10,000 profit on revenue of $4.2 million. In the same year-earlier period, the company lost $5 million, or 42 cents a share, on $4.8 million in sales.
The revised figures mean that for the nine months ended Dec. 31, ObjectShare lost $2.4 million, or 19 cents a share, on sales of $11.6 million. Before restating its earnings, the company expected to report a loss of about $1.1 million, on $12.7 million in sales.
Still, the new totals are an improvement over the same year-earlier period, when the company lost $7.9 million, or 66 cents a share, on sales of $14.8 million.
The company’s stock hasn’t traded since last Wednesday morning, when officials at the Nasdaq National Market ordered its trading halted. Neither the company nor Nasdaq officials, which have requested more information from ObjectShare, would comment Tuesday.
