ADAC issues restated financial numbers

Nuclear medicine vendor ADAC Laboratories of Milpitas, CA, this month issued restated financial results for the years 1996 through 1999 (see chart). At the same time, the company released financial results for the first quarter of 1999 (end-January) that indicate that the restatement imbroglio has not slowed down the company’s business prospects.

ADAC announced last year that it would restate its financial results for three years because of more stringent controls over how the company recognizes revenue. The company also adjusted some extraordinary charges taken during the three-year period. The restatements would not eliminate any sales, but rather would push them into later quarters, the company said. The announcement prompted a slide in ADAC’s stock and the filing of a half-dozen shareholder suits that the company is still defending (SCAN 1/13/99).

For the first quarter of fiscal 1999, ADAC posted sales of $94.3 million, an increase of 40% over the $64.7 million reported in the restated first quarter of 1998. The company recorded net income of $3.9 million, an amount that reflected the impact of $2.5 million in charges to restructure the company’s international operations and $1.6 million in auditor’s and legal fees related to the restatement process. ADAC CEO Andrew Eckert said the company is optimistic about its prospects for 1999, and is booking orders in all its businesses at record rates.