Symbol Technologies Restates Results After Discovering Inventory Discrepancies

The company, a leading maker of bar-code scanners, said it has delayed by two weeks the filing of its quarterly financial report with the Securities and Exchange Commission and may have to amend one or both of its previously filed reports for 2004.

Symbol revised reported revenue for the nine months ended Sept. 30 downward to $1.282 billion from the previously announced $1.295 billion. The revised figure for year-to-date earnings per share is 22 cents, down 2 cents from the 24 cents previously reported.

The company said two independent errors related to inventory levels were discovered. In the first, a large distribution partner underreported inventory levels, resulting in Symbol inaccurately recording about $3.3 million in sales in the third quarter. This error, which Symbol said was an oversight on the part of the distributor, occurred only in the third quarter of 2004, and no previous quarter was affected.

The second discrepancy occurred when a Symbol-owned distribution facility that serves one of its large retail customers misreported quarter-end inventory levels, resulting in inaccurate sales reporting. Consequently, revenue for the first nine months of 2004 was overstated by about $10 million.

Symbol "believes that the large majority of this overstated revenue relates to third quarter 2004, with the remaining balance in prior quarters."

William Nuti, Symbol president and chief executive officer, said "We've moved swiftly to ascertain the nature and extent of these discrepancies. We are in the process of determining whether any amendment to our previously filed SEC quarterly reports is necessary."

Earlier this year Symbol agreed to pay $139 million in fines and restitution after prosecutors charged company executives with devising various accounting schemes to meet Wall Street projections for earnings and to fatten their own incomes. The payment included a $37 million fine to settle a Securities and Exchange Commission case alleging a pattern of fraud between 1998 and early 2003.

Former chief executive Tomo Razmilovic fled to Sweden after charges were filed against him.