VeriFone is taking steps to quell volatility among its Wall Street investors and regain buyer confidence in its products and publicly traded stock after accounting errors in the first three quarters of 2007 caused the company's profit margins to be inflated.
On Aug. 19, 2008, VeriFone filed with the Securities and Exchange Commission an amended and restated report for the first three quarters of fiscal year 2007. Furthermore, the San Jose, Calif.-based POS terminal manufacturer filed a new annual report for fiscal 2007, as well as new reports for the first and second quarters of fiscal 2008.
Financial guidance for the final two quarters of fiscal 2008 and the full year ending Oct. 31, 2009, will be announced Sept. 9, 2008.
"What we're saying is that we are telling Wall Street what to look forward to," said Leah Roscoe, Vice President, Global Marketing, VeriFone. "It's been over a year since we've been able to speak publicly, so our CEO gave financial guidance on what to expect over the next year."
David Bergeron, Chief Executive Officer of VeriFone, said, "We expect our third and fourth quarters, beginning in May of this year, to be positive in many respects. Despite a slowdown in the U.S. market, we are seeing excellent growth internationally and in emerging markets like pay at the table."
In December 2007, VeriFone divulged accounting errors that involved double-booking of shipments made from VeriFone's headquarters in Singapore to its main distribution center in Sacramento, Calif. An internal audit of more than 5 million documents found errors in its inventory valuation in Sacramento, Calif., Tel Aviv, Israel and other, smaller distribution centers.
The audit, conducted by approximately 70 forensic accountants, found no evidence of irregularities outside the first three quarters of 2007. Roscoe said human error accounted for the incorrect inventory count, as well as the misvaluation of manufacturing and distribution overhead.
In late 2007, Bergeron conceded the accounting errors were "unacceptable, and we're going to fix it and fix it fast."
The company projects continued growth in 2008 and 2009 as a result of product cost reduction initiatives and improved pricing strategies. "I think the message for the ISO marketplace is that we're as strong and more committed than ever," Roscoe said. "We're still the market leader in the U.S., and we've continued to be aggressive and take the sales, marketing and business side of the company forward."
In 2008, VeriFone has expanded its operations through sales and acquisitions in Colombia, West Africa and the Caribbean. Recently, VeriFone signed processing agreements with Claim Jumper Restaurants LLC and the U.S. Postal Service.
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