Overstock to restate earnings
Money-losing online closeout retailer says accounting error is to blame for misstatements dating back to 2002.
In light of the accounting error, certain financial statements "should no longer be relied upon," the company said in a securities filing.
It's the latest stumbling block for the money-losing Web discounter, which in late December said its holiday sales growth had lagged previous seasons.
The company is also contending with the courts after former Chairman Patrick Byrne in August filed a lawsuit in California State Superior Court leveling charges of conspiracy against hedge fund Rocker Partners and Scottsdale, Ariz.-based research firm Gradient Analytics. Both companies have filed motions to have the suit dismissed.
Shares were down about 2 percent in early trading.
The overall effect of corrections in all the affected periods would reduce the accumulated deficit and increase inventory on Sept. 30, 2005, by about $3.5 million, the company said in a filing with the U.S. Securities and Exchange Commission.
Changes affect financial statements including those for the fiscal years ended Dec. 31 of 2002 through 2004. It would also affect some quarterly data for 2004 and 2005. The company said it will file amended securities filings 10-Q/A for the quarters ended Sept. 30, 2005, June 30, 2005 and Mar. 31, 2005, "as soon as practicable."
Overstock added that the adjustments have no effect on historical or future cash flows.
Shares of the online closeout retailer were down 53 cents at $22.54 in midmorning trading. The stock has lost 18 percent of its value so far this year, and it has declined by more than half since its all-time high of more than $60 in 2004.
The company on Feb. 7 reported its full-year financial results, which showed a widening net loss of 25 million, or $1.29 per share, on higher revenue of $804 million.