Network Associates Restates Earnings Back to 1998

Network Associates moved to more conservative revenue recognition in January 2001 after determining that reporting on a sell-in basis was inappropriate because of concessions provided by the company, including noncontractual return rights.

Various shareholder lawsuits have accused Network Associates under past management of "channel stuffing," or recognizing revenue on products sold into the distribution channel that were subject to return.

In addition to sending 1998 results into the red, the recently announced restatements:

Increase second-quarter 2003 net income by $2.5 million, to $3.6 million.

Swing a first-quarter 2003 net loss of $3.7 million to net income of $10.5 million.

Increase 2002 net income by $38.1 million, to $128.3 million.

Swing a 2001 reported net loss of $100.7 million to 2001 net income of $83.3 million.

Reduce 2000 net loss by $15.9 million, to $108 million.

Reduce 1999 net loss by $4.9 million, to $152 million.