Reynolds and Reynolds Completes Revenue Recognition Policy Review; Files 2005 Form 10-K
May 15 2006 - 12:19PM
PR Newswire (US)
No restatement required for revenue recognition DAYTON, Ohio, May
15 /PRNewswire-FirstCall/ -- The Reynolds and Reynolds Company
(NYSE:REY) today announced the filing of its Annual Report on Form
10-K for the fiscal year ended September 30, 2005. The company also
announced the completion of both the Securities and Exchange
Commission staff's review of the company's financial reports and
management's review of its revenue recognition policy. The company
had previously delayed filing its 10-K pending completion of these
reviews. As a result of the reviews, Reynolds has changed its
revenue recognition policy to correct errors it identified. The
company concluded that the errors did not result in a material
misstatement to its financial reports for any previous period.
Therefore, no restatement is required for revenue recognition. As
previously announced, the company has restated its financial
reports for auction rate securities and the two-class method of
earnings per share. Revenues were $969 million for fiscal year 2005
and $233 million for the fourth quarter. The company recorded a
fourth quarter loss of $34 million, or $0.56 per diluted Class A
common share, and full-year earnings of $33 million or $0.51 per
diluted Class A common share. Results include the impact of a
pre-tax charge of $91 million ($0.88 per diluted Class A common
share) in the fourth quarter associated with the discontinuation of
the Reynolds Generations Series(R) Suite software solution. To
correct the errors in revenue recognition, the company recorded a
cumulative adjustment during the fourth quarter of fiscal year
2005. The adjustment reduces 2005 revenues by approximately $12
million and net income by approximately $700,000 or $0.01 per
diluted Class A common share. Deferred revenues were increased as a
result of the adjustment and will be recognized primarily in 2006.
Deferred costs increased by $11 million. Without the effect of the
charge and adjustment, full-year 2005 earnings would have been
$1.41 per diluted Class A common share. By comparison, fiscal year
2004 revenue was $982 million. Full-year 2004 earnings were $93
million or $1.37 per diluted Class A common share. Fourth- quarter
2004 revenues were $241 million while net income was $20 million
($0.31 per diluted Class A common share). "We are pleased to have
concluded the SEC staff review and our review of Reynolds' revenue
recognition policy with no restatement required," said Fin O'Neill,
president and CEO. "We appreciate the patience of our shareholders
over the last several months and look forward to holding our annual
meeting of shareholders on June 15 as we previously announced."
Prior to the annual meeting, the company will file its quarterly
reports on Form 10-Q and schedule and hold an earnings conference
call for the fiscal quarters ended December 31, 2005 and March 31,
2006. A formal notice of the meeting and proxy statement will be
mailed to each shareholder of record as of May 22, 2006, prior to
the June 15 meeting. Cautionary Notice Regarding Forward-Looking
Statements Certain statements contained herein constitute
forward-looking statements within the meaning of the Private
Securities Litigation Reform Act of 1995. The forward-looking
statements are based on current expectations, estimates, forecasts
and projections of future company or industry performance based on
management's judgment, beliefs, current trends and market
conditions. Forward- looking statements made by the company may be
identified by the use of words such as "will," "expects,"
"intends," "plans," "anticipates," "believes," "seeks,"
"estimates," and similar expressions. Forward-looking statements
are not guarantees of future performance and involve certain risks,
uncertainties and assumptions which are difficult to predict,
including the scheduled date for the company's annual meeting; the
time and documentation necessary to implement changes in accounting
policy in order to prepare and review financial statements for
quarterly periods; the company's ability to make further timely
filings of its required periodic reports under the Securities
Exchange Act of 1934; the effect of a further delay on the listing
of the company's common stock on the New York Stock Exchange, the
funding availability under the company's credit facilities or upon
outstanding debt obligations; the company's ability to maintain
adequate cash balances for operating and for debt defeasance; any
adverse response of any of the Company's vendors, customers, media
and others relating to the delay of the company's periodic reports,
and additional uncertainties related to accounting issues. Actual
outcomes and results may differ materially from what is expressed,
forecasted or implied in any forward-looking statement. The company
undertakes no obligation to update any forward-looking statements,
whether as a result of new information, future events or otherwise.
About Reynolds Reynolds and Reynolds (http://www.reyrey.com/) helps
automobile dealers sell cars and take care of customers. Serving
dealers since 1927, it is a leading provider of dealer management
systems in the U.S. and Canada. The Company's award-winning
product, service and training solutions include a full range of
retail Web and Customer Relationship Management solutions,
e-learning and consulting services, documents, data management and
integration, networking and support and leasing services. Reynolds
serves automotive retailers and OEMs globally through its incadea
solution and a worldwide partner network, as well as through its
consulting practice. Contact: DATASOURCE: The Reynolds and Reynolds
Company CONTACT: Media, Mark Feighery, +1-937-485-8107, or , or
Investors, John E. Shave, +1-937-485-1633, or , both of The
Reynolds and Reynolds Company Web site: http://www.reyrey.com/
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