Symmetricom Inc. says it will restate its financial statements for the quarter, and nine months ended March 31, due to an error in accounting for income taxes. The error relates to an adjustment to purchase accounting based on the third-quarter liquidations of QoSmetrics SA and QoSmetrics Inc., which were acquired on January 2.
The maker of communication equipment, which has a market capitalization of about $318 million, says it subsequently determined that the liquidations are separate events from the purchase, and therefore a tax expense related to the liquidations should have been recorded for the periods that followed. As a result of the error, earnings were overstated by about $3.4 million. Symmetricom generates $210 million in annual revenues.
This is the second time this year that Symmetricom has announced a restatement. In April the company disclosed that it needed to revise its financial statements for the quarter and six months ended December 31, 2006, due to an error in accounting for outsourced labor related to installation work performed by the company for its customers. The accounting error was blamed on the company’s reliance on a manually compiled spreadsheet that was not accurately completed, say officials.
The April error correction reduced reported fully diluted earnings per share from $0.08 to $0.06 for the quarter ended December 31, 2006, and from $0.16 to $0.14 for the six months ended December 31, 2006.