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August Tech Restatement Reverberates

Chris Kraeuter

August Technology(AUGT - Cramer's Take - Stockpickr) restated financial results in relation to $12.2 million in revenue stretching back to last year, the chip-equipment company announced late Wednesday, causing merger partner Rudolph Technologies(RTEC - Cramer's Take - Stockpickr) to flinch.

August said it would recognize $12.2 million in revenue in the current quarter, but only because a follow-on order of the same product had been cancelled. August didn't say how much the follow-on order was worth, but the cancellation had helped clear up the timing issue regarding the original sale.

According to accounting rules, August shouldn't have booked the revenue from the original sale while an add-on order to the same product had yet to be delivered.

"This restatement resulted from a technical application of accounting principles and we have no reason to believe there has been any misconduct or wrongdoing by any August Technology personnel," said Roger Gower, chairman of August's audit committee.

Excluding the additional $12.2 million in revenue that will show up in the current quarter's results, August said results would be in the top half of its original target range.

Merger partner Rudolph Technologies said it would have to wait for the results of the restatement before it would comment further on stock-swap plans with August. Rudolph and August are currently trying to merge while at the same time trying to fend off larger player KLA-Tencor(KLAC - Cramer's Take - Stockpickr) from snapping up August.

August has been at the center of a takeover battle for most of the year, and this latest development certainly doesn't provide clarity as to when an actual deal, regardless of who it's with, will be completed.