Clarent Announces Investigation of Potential Overstatement of Historical Revenues; Places Three Executives On Administrative Leave.Business Editors/High-Tech Writers REDWOOD CITY Redwood City, city (1990 pop. 66,072), seat of San Mateo co., W Calif., on San Francisco Bay; inc. 1868. Manufactures include commmunications, electrical, electronic, and medical equipment. , Calif.--(BUSINESS WIRE)--Sept. 4, 2001 Clarent(R) Corporation (Nasdaq:CLRN CLRN California Learning Resource Network CLRN Community Legal Resources Network CLRN Chemical Laboratory Response Network ), a leading provider of voice solutions for next generation networks, announced today that it has discovered information suggesting that the Company's previously reported revenues for the first and second quarters of fiscal 2001 may have been materially overstated o·ver·state tr.v. o·ver·stat·ed, o·ver·stat·ing, o·ver·states To state in exaggerated terms. See Synonyms at exaggerate. o . The Company's Board of Directors has formed a special committee to investigate a number of transactions that place in question the Company's historical financial results. The Company is being assisted in this review by its outside auditors, Ernst & Young. The Company anticipates that its first quarter 2001 revenues, as released on April 19, 2001, and its second quarter 2001 revenues, as released on July 19, 2001, will be reduced and the related net losses will increase upon conclusion of this review. The related period balance sheets will also be adjusted; in particular, the Company believes that there will be a material reduction in cash and increase in other assets other assets Assets of relatively small value. For financial reporting purposes, firms frequently combine small assets into a single category rather than listing each item separately. as of June 30, 2001. In addition, the Company now believes its revenues for the second half of fiscal 2001 and for fiscal 2002 will be substantially below previously anticipated levels, and that the related losses will be significantly larger than expected. The Company will provide further information following the completion of the investigation. The Board of Directors has placed on administrative leave Jerry Chang Chang (chăng) or Yangtze (yăng`sē`, yäng`dzŭ`), Mandarin Chang Jiang, longest river of China and of Asia, c.3,880 mi (6,245 km) long, rising in the Tibetan highlands, SW Qinghai prov. , the Company's chief strategist strat·e·gist n. One who is skilled in strategy. Noun 1. strategist - an expert in strategy (especially in warfare) strategian market strategist - someone skilled in planning marketing campaigns ; Matthew Chiang, president of Clarent's Asia/Pacific region; and Kevin Chang, General Manager of Clarent's Northern Asia operations. Frank Lee, President of Clarent's China operations, has been named as acting head of Asia/Pacific operations. The Board of Directors intends to name Michael Vargo as Acting Chairman of the Board, and he will continue in his role as President and Chief Executive Officer. Because the investigation is ongoing, the Company is unable to make any comment beyond this press release at this time. The Company expects to make additional disclosure as its investigation progresses. About Clarent Clarent Corporation (Nasdaq: CLRN) is a leading provider of voice solutions for next generation networks. Clarent's solutions enable service providers to deploy a converged network The integration of the telephone system with IP-based data networks. See softswitch. (networking) converged network - A single network that can carry voice, video and data. (voice, data and applications). Clarent solutions reduce costs and increase operating efficiencies while delivering innovative new services that allow end users to manage their communications. Founded in 1996, Clarent is headquartered in Redwood City, Calif., and has offices in Asia, Europe, Latin America Latin America, the Spanish-speaking, Portuguese-speaking, and French-speaking countries (except Canada) of North America, South America, Central America, and the West Indies. and North America North America, third largest continent (1990 est. pop. 365,000,000), c.9,400,000 sq mi (24,346,000 sq km), the northern of the two continents of the Western Hemisphere. . For more information please visit www.clarent.com. Forward-Looking Statements forward-looking statement A projected financial statement based on management expectations. A forward-looking statement involves risks with regard to the accuracy of assumptions underlying the projections. This release contains forward-looking statements that involve risks and uncertainties, including statements about the investigation and its potential outcome and the effect of the investigation on the company's financial statements. These statements involve risks and uncertainties, including but not limited to the effectiveness of the Company's management during the investigation, the company's ability to successfully expand sales and channels, utilize reduced resources effectively, improve operational productivity and efficiencies, develop new and enhanced products, achieve acceptable gross margins, retain customers, the ability of customers to pay Clarent, the regional concentration of revenue, ability to retain key employees, as well as uncertainties associated with the future development of the markets for IP-based communications and changes in the global economic market. Certain of these risks and uncertainties are described further in our periodic filings with the SEC. |
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