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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) December 29, 1998
ADAC Laboratories
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(Exact name of registrant as specified in its charter)
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California 0-9428 94-1725806
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(State or other jurisdiction (Commission (IRS Employer
of incorporation) File Number) Identification No.)
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540 Alder Drive, Milpitas, California 95035
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (408) 321-9100
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Not applicable
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(Former name or former address, if changed since last report)
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ITEM 5. Other Events
On December 29, 1998, ADAC Laboratories (the "Company") issued a press
release announcing its intention to restate its financial results for the fiscal
years 1996, 1997 and 1998 as a result of an ongoing review by the Company with
the assistance of PricewaterhouseCoopers of its accounting principles and their
historic application. The Company is filing a Form 12b-25 stating that it did
not file its Form 10-K for the fiscal year ended September 27, 1998 within the
prescribed period. A copy of the press release is filed as Exhibit 99.1 and
incorporated herein by reference.
ITEM 7. Financial Statements, Pro Forma Financial Information and Exhibits
(a) Exhibits.
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Exhibit No. Description
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99.1 Press release of the Company, dated December 29,
1998, relating to its restatement of its
financial results for the fiscal years 1996, 1997
and 1998.
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, as
amended, the registrant has duly caused this report to be signed on its behalf
by the undersigned hereunto duly authorized.
ADAC LABORATORIES
Dated: December 29, 1998 By: /s/ P. Andre Simone
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P. Andre Simone
Chief Financial Officer
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EXHIBIT 99.1
Contact: R. Andrew Eckert or Andre Simone
(408) 321-9100
ADAC LABORATORIES TO RESTATE FISCAL YEARS 1996-1998
Milpitas, California, December 29, 1998 - ADAC Laboratories (Nasdaq: ADAC)
announced today that its financial results for fiscal years 1996, 1997 and 1998
will be restated. This restatement is a result of an extensive ongoing review by
the Company with the assistance of Pricewaterhouse Coopers (PwC) of its
accounting principles and their historic application. The Company did not file
its Annual Report on Form 10-K yesterday and has applied for an extension.
As part of this restatement, the Company will adjust the timing of certain
revenues over the 1996-1998 period. The primary impact of these adjustments will
be to move revenues forward into adjacent future periods. Substantially all of
the transactions relating to these revenues have been completed and the
associated revenues have been or will shortly be recognized. In addition,
certain expenses will be adjusted and re-allocated throughout the period.
Based on the review to date, the Company believes that the net effect of these
adjustments will have a material adverse impact on the Company's fiscal 1996 and
1997 financial results but are not expected to have a material impact on its
previously released fiscal 1998 revenue, although the effect on revenue in
individual quarters may be material. In addition, management believes that net
income for 1998 may be somewhat lower or somewhat higher than previously
reported, depending on the outcome of the ongoing review. Additionally, the
Company believes these accounting changes will not have a material impact on the
Company's future business prospects.
After the issuance of the Company's earnings release in early November, several
issues concerning accounting policies and practices were raised. Thereafter, the
Company, working with PwC, undertook an extensive review of these issues,
particularly with respect to the accounting treatment of various one-time
charges taken by the Company as well as the appropriateness of certain expense
and revenue recognition practices that the Company had followed in recent years.
Following the review, the Company will apply different revenue recognition
guidelines than it has followed, change the accounting for certain transactions
and adjust certain expense items.
The Company's competitive position continues to be very strong, with leading
product portfolios in each of its three major businesses. In addition, ADAC has
had record customer order volumes over the course of the last two years. With
the release of several new product lines in the current quarter, it has
significantly further improved its competitive position entering fiscal 1999.
The Company remains confident in its long-term growth prospects.
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ADAC Laboratories is the world market share leader in nuclear medicine and
radiation therapy planning systems and a supplier of radiology and cardiology
information systems in North America. ADAC is headquartered in Milpitas, CA with
its HealthCare Information Systems division in Houston, TX.
This press release contains forward-looking statements, including statements
concerning the anticipated effects of the restatement on the revenue, earnings
and growth prospects of the Company. Factors that could cause actual results to
differ materially from those contained in such forward-looking statements
include competition, the Company's dependence on new products and product
enhancements, and the other factors set forth under "Business Considerations" in
the Company's most recent Form 10-Q for the third fiscal quarter ended June 28,
1998. All forward-looking statements are based on information available to the
Company on the date hereof, and the Company assumes no obligation to update such
statements.
