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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
______________________
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
DATE OF REPORT (Date of earliest event reported): October 26, 1998
COMMISSION FILE NUMBER 000-22647
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PERITUS SOFTWARE SERVICES, INC.
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(Exact Name of Registrant as Specified in Charter)
Massachusetts 04-3126919
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(State or Other Jurisdiction of (I.R.S. Employer
Incorporation ) Identification No.)
Two Federal Street, Billerica, Massachusetts 01821-3540
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(Address of Principal Executive Offices) (Zip Code)
(978) 670-0800
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(Registrant's Telephone Number, Including Area Code)
Not Applicable
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(Former Name, Former Address and Former Fiscal Year,
if Changed Since Last Report)
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Item 5. Other Events.
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(a) On October 26, 1998, Peritus Software Services, Inc. (the
"Company") announced a restatement of its results for the
quarters ended March 31, 1998 and June 30, 1998.
Peritus will restate first quarter 1998 revenue to $9.453
million, versus the originally reported $10.150 million. The loss
from operations for the quarter is restated to $3.547 million
from $2.775 million. The restated first quarter 1998 net loss is
$3.338 million, or $.21 per share, versus the originally reported
net loss of $2.566 million, or $.16 per share. Peritus will
restate second quarter 1998 revenue to $11.083 million, versus
the originally reported $11.830 million. The loss from operations
for the quarter is restated to $1.961 million from $1.102
million. The restated second quarter 1998 net loss is $1.838
million, or $.11 per share, versus the originally reported net
loss of $979,000, or $.06 per share.
Within the next several weeks, Peritus expects to file with the
Securities and Exchange Commission an amendment to its Forms 10-Q
for the quarters ended March 31, 1998 and June 30, 1998 which
will include restated results for the quarters.
Item 7. Financial Statements, Pro Forma Financial Information and Exhibits.
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(a) Financial Statements.
None.
(b) Pro Forma Financial Information.
None.
(c) Exhibits.
99. Press Release dated October 26, 1998.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
Dated: October 29, 1998
PERITUS SOFTWARE SERVICES, INC.
By: /s/ John D. Giordano
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Name: John D. Giordano
Title: Vice President, Finance
and Chief Financial Officer
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EXHIBIT INDEX
EXHIBIT NO. DESCRIPTION
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99 Press Release dated October 26, 1998
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EXHIBIT NO. 99
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CONTACT: John Giordano Jacqueline Crowley
Chief Financial Officer Investor Relations
Peritus Software Services, Inc Peritus Software Services, Inc.
978/670-0800 978/670-0800
Fax: 978/670-2060 Fax: 978/670-2060
Internet: [email protected] Internet: [email protected]
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PERITUS SOFTWARE SERVICES, INC. RESTATEMENT OF RESULTS
FOR THE FIRST AND SECOND QUARTERS OF 1998
BILLERICA, MASS. -- OCTOBER 26, 1998 -- Peritus Software Services, Inc. (NASDAQ:
PTUS) today announced that it will restate financial results for the first and
second quarters ended March 31, 1998 and June 30, 1998, respectively. After
review by Peritus' management, the Audit Committee of the Company's Board of
Directors and PricewaterhouseCoopers LLP, the Company's independent auditor, the
Company has concluded that a restatement is required.
Peritus will restate first quarter 1998 revenue to $9.453 million, versus the
originally reported $10.150 million. The loss from operations for the quarter
is restated to $3.547 million from $2.775 million. The restated first quarter
1998 net loss is $3.338 million, or $.21 per share, versus the originally
reported net loss of $2.566 million, or $.16 per share.
Peritus will restate second quarter 1998 revenue to $11.083 million, versus the
originally reported $11.830 million. The loss from operations for the quarter
is restated to $1.961 million from $1.102 million. The restated second quarter
1998 net loss is $1.838 million, or $.11 per share, versus the originally
reported net loss of $979,000, or $.06 per share.
The restatement first relates to the recording by Peritus of approximately
$1.086 million of software license revenue for a single customer in the second
quarter of 1998. Peritus believes that the amount of software license revenue
as originally recorded reflected a part of an approximately $1.9 million
business arrangement agreed to between the parties under a signed purchase
order. Peritus now believes that as a result of errors and delays in
communication, certain elements of the transaction were not sufficient to
substantiate the revenue recording. Due to changes in management at the
customer, Peritus has not been able to confirm its understanding of the original
arrangement. Peritus invoiced the customer for certain completed work to date
and is in the process
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PERITUS RESTATEMENT OF RESULTS FOR THE FIRST AND SECOND QUARTERS OF 1998
of negotiating certain agreements with the customer's new management for an
approximately $1.9 million revised business arrangement.
The balance of the restatement relates primarily to the Company's incorrect
interpretation of the complex provisions regarding recognition of revenue for
combined software/services arrangements under Statement of Position 97-2,
Software Revenue Recognition issued by the American Institute of Certified
Public Accountants, and effective for the Company as of January 1, 1998. In
applying the Statement to its new year 2000 renovation offerings which the
Company commenced in the first quarter, the Company mistimed the recognition of
revenue between quarters under certain contracts providing for the delivery of
combined software and services.
The Company has also received and responded to a comment letter related to the
Company's Form 10-K for the year ended December 31, 1997 from the Securities and
Exchange Commission regarding, among other things, the Company's accounting for
in-process research and development in connection with its acquisition of
Millennium Dynamics, Inc. Although the Company believes that it has properly
accounted for the item, a different conclusion would require further restatement
of the Company's results beginning with the fourth quarter of 1997. The Company
understands that accounting and valuation techniques regarding in-process
research and development have been recently under debate in the accounting
profession and with the Securities and Exchange Commission.
Peritus expects to announce final results for the quarter ended September 30,
1998 before the end of the month. Within the next several weeks, Peritus
expects to file with the Securities and Exchange Commission an amendment to its
Forms 10-Q for the quarters ended March 31, 1998 and June 30, 1998 which will
include restated results for the quarters.
ABOUT PERITUS
Founded in 1991, Peritus Software Services, Inc. is a leading provider of
software maintenance outsourcing services. The Peritus Software Asset
Maintenance (SAM) offerings enable organizations to transform the maintenance
process into an efficient, cost-effective discipline that boosts productivity
and performance. SAM offerings include customized services for software
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PERITUS RESTATEMENT OF RESULTS FOR THE FIRST AND SECOND QUARTERS OF 1998
providers, information systems organizations, and Year 2000 renovations.
Peritus is headquartered in Billerica, MA, with offices worldwide. For more
information, see the Peritus web site at http://www.peritus.com.
This press release may contain certain forward-looking statements, which involve
risks and uncertainties. The Company's actual results may differ materially from
the results discussed in such statements. Certain factors that could cause
actual results to differ materially from those discussed in such forward-looking
statements include the risks described in the Company's Annual Report on Form
10-K for the year ended December 31, 1997, the Quarterly Report on Form 10-Q for
the quarter ended June 30, 1998, and other public filings made by Peritus with
the Securities and Exchange Commission, which factors are incorporated herein by
reference.
Peritus is a registered trademark and Software Asset Maintenance is a service
mark of Peritus Software Services, Inc.
