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Article Excerpt
MILPITAS, Calif. -- Phoenix Technologies Ltd. (Nasdaq:PTEC) announced today that, subsequent to its earnings release issued July 20, 2005, the Company discovered that revenue relating to one software license transaction that was reported in the Company's Tokyo, Japan office in the third quarter of fiscal 2005 will have to be reversed due to irregularities associated with the execution of the contract. Upon discovery of the irregularities associated with this transaction, the Company immediately launched an internal investigation, terminated the responsible sales person and placed his immediate supervisor on administrative leave. The Company is continuing to negotiate the terms of a license agreement with the customer in question and anticipates entering into an arrangement with the customer during this, the Company's fiscal fourth quarter.
As a result of the investigation conducted to date, the Company has determined that $450,000 in revenue recognized in the fiscal quarter ended June 30, 2005, will be reversed, which will result in a reduction in revenue from $24.2 million to $23.7 million, a reduction in operating income from $1.8 million to $1.3 million, and a reduction in net income from $1.0 million, or $0.04 per diluted share, to $0.7 million,...
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