Troubled online real estate play Homestore.com Inc. said
it will restate its financial results for all of 2000, as well as the first
three quarters of 2001 as a result of its internal accounting probe.
The company said it expects to conclude its internal accounting inquiry and
file restated financial statements by mid-March 2002.
The Westlake Village, Calif.-based company, whose stock is currently halted by the NASDAQ, took pains to point out
that its past troubles don’t reflect on current operations. However, shares are still trading below
$1 following the
initial disclosure that it overstated earnings by improperly accounting for advertising income.
“The restatements involve historical accounting issues that will be
corrected, but do not relate to the ongoing operations of Homestore,” said
Mike Long, the company’s new chief executive officer, named after a
management shakeup that occurred over the scandal.
“We are intensely focused on serving our customers,” he said. “The company
has sufficient financial resources to meet our customer commitments and to
fund the growth of our business.”
However, Homestore, which has terminated or accepted resignations from seven
employees as a result of its investigation into the irregularities, did not
even hint at what the impact will be on past earnings.
The company did say that it expects its cash flow from operations to be
positive for the full year 2002 and that it had cash and cash equivalents
available to fund operations of approximately $48 million as of December 31,
2001, in addition to restricted cash of approximately $100 million.
Homestore said earlier that an audit committee investigation of its finances
showed that it had accounted for barter advertising deals as regular ad sales
transactions.
Earlier this month, the company announced it would cut
300 jobs and sell its eNeighborhoods business unit as it refocuses the
business on its core objectives.
Homestore’s network of Web sites includes the flagship Realtor.com;
HomeBuilder.com; Homestore Apartments & Rentals; and Homestore.com, a home
information resource.
