Intravascular ultrasound (IVUS) developer Jomed will be restating its 2001 and 2002 financial statements as a result of a review of the firm's accounting policies. CEO Tor Peters has resigned.
Helsingborg, Sweden-based Jomed said the restatement stems from sale-and-lease agreements for 60 IVUS systems in the U.S. and 72 systems in Europe that were recognized as revenue in 2001. In addition, certain transactions were recorded but not subsequently executed, Jomed said, resulting in higher-than-actual revenues in the second and third quarters of 2002.
The company had reported 2001 revenues of $172.7 million (U.S.), which will now be corrected to $157.2 million or less, Jomed said. Changes could also lead to negative earnings before interest and taxation (EBIT), as opposed to previously reported EBIT of $12.6 million.
In 2002, Jomed expects revenues will be at least $20.9 million lower than the previously reported $146.6 million. The firm has not yet determined the impact of the changes on profitability, but the result is expected to be a negative EBIT for 2002, Jomed said.
In addition, Jomed has concluded that its guidance for 2002 and 2003 will also need to be adjusted significantly. The firm said it would provide revised projections after an analysis of current trends is completed.
Jomed's restatement announcement has led some institutional investors of the firm's convertible loan of $26.2 million to call on the company to repay its loan in full, pursuant to the terms of the respective loan agreement. As a result, Jomed said it may require additional financing or financial restructuring.
Former COO Jörgen Peterson has been named chairman and acting CEO, and the firm will be searching for a new CEO. Vice president of finance Lars-Johan Cederbrant will become acting CFO, replacing acting CFO Willem Jansen.
By AuntMinnie.com staff writersJanuary 14, 2003
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