Adac Laboratories’ Restated Results Under SEC Review

Adac Laboratories, one of the biggest U.S. makers of nuclear imaging equipment used in medical diagnosis, said Monday the Securities and Exchange Commission is investigating the company’s restatement of financial results for fiscal 1996 through 1998.

Adac shares fell $1.69, or more than 15%, to close at $9.06 on Nasdaq.

The SEC’s formal investigation was disclosed by Adac in a 10-K annual report filed with the agency. An SEC spokesman declined to comment.

According to the filing, Adac “has been informed” that the SEC had issued a formal order of investigation related to the restatement of financial results for 1996, 1997 and the first three quarters of 1998.

A company spokesman said the investigation was more of a review and that the agency didn’t dispute the company’s revisions.

“The SEC hasn’t challenged any of our statements. We felt that we had a good scrubbing of the numbers,” said Bruce Balanco, a spokesman for Adac, based in Milpitas, Calif.

Balanco said the SEC began its investigation in June and included interviews with the company’s auditors and the company’s top management, including Chief Executive Andrew Eckert and its chief financial officer.

“We’ll continue to cooperate with the SEC and provide whatever information they need,” Balanco said.

Adac said in March that it had finished restating financial results for 1996, 1997 and 1998, recording some past revenue in later quarters than it had before.

Adac had said in December 1998 that it would restate its financial results after a review by the accounting firm PricewaterhouseCoopers.

In March, the company said its profit from operations in its fiscal 1998 totaled $17.7 million, or 87 cents a share, up from $14.2 million, or 73 cents, in fiscal 1997.

The company previously had reported profit from operations in fiscal 1998 of $29 million, or $1.42 a share, up from $22.5 million, or $1.15 a share, in fiscal 1997.

Including charges, the company had net income of $7.4 million, or 36 cents, in fiscal 1998, down from $13.5 million, or 69 cents, in fiscal 1997.