San Francisco, CA, Thursday, March 17, 2005 - Advent Software, Inc. (NASDAQ: ADVS) today announced it has filed a Form 12b-25/A, dated March 17, 2005, with the Securities and Exchange Commission in order to obtain a 15-day extension for the filing of its Annual Report on Form 10-K. As explained in our amended Form 12b-25/A filed today, an incorrect filing was made yesterday due to an error by our financial printer and should be disregarded. As disclosed in today’s filing, the Company needs the additional time to complete its evaluation and assessment of the Company's internal control over financial reporting and to complete the financial statements to be included in the 2004 Form 10-K. The exact wording from the narrative of the filing is shown below. The Company anticipates filing its 2004 10-K within the 15-day extension period that commences today.
Narrative from Form 12b-25/A
On March 16, 2005, an incorrect Form 12b-25 was filed due to a mistake by the Registrant's financial printer. The filing being made herewith is the correct filing and supersedes and replaces the incorrect filing in all respects. The incorrect filing refers to an inquiry by the Audit Committee of the Registrant into claims made by an employee that certain past transactions were improperly recognized as revenue. The Audit Committee engaged independent special counsel to assist the Audit Committee in conducting the inquiry. Based upon its inquiry, the Audit Committee confirmed management's conclusion that that no new information had been identified that would result in a change to revenue reported for the transactions reviewed in the inquiry. The Company’s independent public accountants have been informed of the inquiry. Accordingly, the reasons for the delay in filing Registrant's 2004 Form 10-K are as set forth in this corrected filing on Form 12b-25/A.
In the Registrant’s Annual Report on Form 10-K for the fiscal year ended December 31, 2004 (the “2004 Form 10-K”), the Company is required to include a report of management on the Registrant’s internal control over financial reporting as of December 31, 2004, as required by Section 404 of the Sarbanes-Oxley Act of 2002 (“Management Report”). As of the date of this filing, the Registrant is continuing to evaluate its internal control over financial reporting.
Based on its evaluation and testing of its internal control over financial reporting to date, the Registrant’s management has determined that as of December 31, 2004, it had a control deficiency that is a material weakness. A material weakness, as defined by the Public Accounting Oversight Board’s Auditing Standard No. 2, is a significant deficiency, or combination of significant deficiencies, that results in more than a remote likelihood that a material misstatement of the annual or interim financial statements will not be prevented or detected. The Registrant’s control deficiency that is currently identified as a material weakness is that the Company did not maintain effective controls to completely identify and record non-cash impairment charges on abandoned property and equipment related to a restructuring of a building operating lease with sufficient specificity and safeguards to ensure that review by the appropriate levels of accounting personnel would detect or prevent material errors on a timely basis. This control deficiency was identified by management in the course of their year-end reporting process. Since management has not completed its evaluation of the Registrant’s internal control over financial reporting, it is possible that additional material weaknesses may be identified before the filing of Registrant’s 2004 Form 10-K.
Consequently, the Registrant’s Management Report will conclude that the Registrant’s internal control over financial reporting was not effective as of December 31, 2004 to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles based on the criteria set forth in Auditing Standard No. 2. The Registrant’s management accordingly expects its independent registered public accounting firm to issue an adverse opinion with respect to the operating effectiveness of the Company's internal control over financial reporting as of December 31, 2004.
In the Form 8-K filed on March 8, 2005 (“Form 8-K”), the Registrant disclosed that the financial statements in the quarterly reports on Form 10-Q for periods ended June 30 and September 30, 2004 should no longer be relied on because of errors in those financial statements. The Company has recorded adjustments to recognize additional non-cash impairment charges of approximately $863,000 and to reduce impaired property and equipment assets by the same amount for the quarters ended June 30, 2004 and September 30, 2004. The Company will file amended Form 10-Qs for the periods ended June 30 and September 30, 2004 to correct these errors. In addition, in the Form 8-K, the Registrant also disclosed that certain corrections to rent expense and depreciation for the quarter and year ended December 31, 2004 and increases in property and equipment assets and deferred rent on the balance sheet as of December 31, 2004 would be reflected in its 2004 Form 10-K.
Due to the additional time required by the Registrant to complete its Management Report and to complete the financial statements to be included in the Form 10-K, the Registrant is unable to file its Annual Report on 2004 Form 10-K for the year ended December 31, 2004 within the prescribed due date of March 16, 2005, without unreasonable effort and expense. Registrant currently estimates that the 2004 Form 10-K will be filed within the 15-day time period that commences upon the filing of this Form 12b-25/A.
Advent Software, Inc. (www.advent.com), a multi-national firm, has been providing trusted solutions to the world’s leading financial professionals since 1983. Firms in 50 countries using Advent technology manage investments totaling more than US $8 trillion. Advent’s quality software, data, services and tools enable financial professionals to improve service and communication to their clients, allowing them to grow their business while controlling costs.