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SCO to restate 2004 financial results

SCO to restate 2004 financial results

SCO will restate financial results for the first three quarters of fiscal 2004 because of accounting errors.

The SCO Group plans to restate its financial results for the first three quarters of its fiscal year 2004, due to accounting errors, the company announced Thursday. The announcement comes as SCO is fighting to prevent a Nasdaq delisting for failing to file its 2004 annual report on time.

Last month, SCO claimed that the filing delay was due to a re-examination of stock grants made under the company's employee compensation plan. But in a statement released Thursday, the Lindon, Utah, company said it also expects to reclassify dividends related to a US$50 million October 2003 investment in the company made by BayStar Baystar Capital. SCO repurchased all shares of Baystar's A-1 Convertible Preferred stock in July 2004, the statement said.

The restatement will not affect the company's previously reported net loss or its earnings per share for the fiscal year, the company said.

The company may have to repurchase certain shares purchased under its employee stock purchase program that were not properly registered during the first three quarters of SCO's fiscal year, which ended October 31, 2004. SCO will also have to restate US$233,000 in stock compensation recorded in the second quarter that actually occurred in the first quarter, the statement said.

In a December press release, SCO reported a net loss of US$23.4 million for 2004, a year in which it spent nearly US$20 million in legal fees on its lawsuits with IBM and others over intellectual property issues.

The Nasdaq Listing Qualifications Panel has scheduled a hearing on SCO's delisting for March 17, SCO's statement said.


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