CEO Shell still on company clean up detail
NEW YORK — TV program guide provider Gemstar TV Guide Intl. attempted to set the books straight with the SEC and investors Monday, as the company reported financial results for its full year and fourth quarter ended Dec. 31, along with two years’ worth of restatements that tidy up its accounting.
The Pasadena-based company, which recorded a 2002 loss of $6.4 billion due to a major writeoff in goodwill value, has already restated its earnings twice in the last year and has been under ongoing Securities & Exchange Commission investigation into its accounting practices.
Senior management, headed by CEO Jeff Shell, and its auditors finished a six-month extensive review and evaluation of the company’s previous accounting policies, financial controls and procedures and corporate governance policies.
Shell has been trying to clean up the company’s finances since he took over from ousted CEO Henry Yuen last year.
“The first priority of our new management team was to return the company to a position of stability, normalcy and credibility. I believe we have taken a huge step in that direction today,” Shell said in a statement Monday.
As it warned last month it would do, the company restated financial results dating back to 2000, with the aggregate effect of reducing consolidated revenues by $55.8 million. The hit to consolidated income was even worse: a reduction of $143.8 million.
The adjustments announced Monday include a cumulative reduction in operating profits of $25.2 million, due to expenses associated with patent prosecution and patent litigation that had inappropriately been capitalized. Company also said some $23.5 million previously recognized in connection with an eight-year licensing agreement with an online service provider will be recognized over the full eight years of the agreement.
For the full year 2002, revenues fell 14% to around $1 billion, down from $1.159 billion in 2001, due in part to a $48 million decrease in TV Guide magazine’s newsstand and subscription revenue and a $19 million decrease in TV Guide advertising sales.
Thanks to a $6.6 billion goodwill writedown, the company reported a net loss of $6.4 billion for the year, compared to a net loss of $750.7 million in 2001.
Fourth-quarter sales fell 18% to $244.7 million, down from $298.8 million in 2001.