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Livent's books due by Oct.
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August 19, 1998: 7:56 p.m. ET
Broadway producer says cash flow, business relationships are unchanged
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NEW YORK (CNNfn) - Livent Inc., the troubled Broadway show producer that recently uncovered a massive internal accounting scandal, said Wednesday its restated financial statements won't be ready until late October.
The Toronto-based company shocked everyone from Wall Street to the Great White Way on Aug. 10 when its new management discovered "millions of dollars" of fake revenue and unreported expenses.
Livent subsequently suspended two former officials, including ex-Chairman Garth Drabinsky, who was both praised and criticized for his impresario style. Its stock (LVNTF) hasn't traded on the Nasdaq since the disclosure, last closing at 6-3/4.
To be sure, Livent's latest public statement on Wednesday represented more than anything else an opportunity for damage control. The company explained it doesn't expect its accounting problems will have a significant impact on its cash flow or operations.
Livent added it is paying its bills as usual and doesn't anticipate any changes in vendor relationships.
"What we have learned in the last eight weeks since joining the company supports our initial belief that we can combine the tremendous creative vitality of the company with sound business judgment to produce shows that are both artistic and profitable," said Roy Furman, Livent's new chairman and chief executive.
Furman -- who also founded investment bank Furman Selz -- arrived at the company's doorsteps in conjunction with a $20 million investment by Michael Ovitz, the ex-Hollywood super-agent to superstars and former vice chairman of Walt Disney Co. who holds 12 percent of Livent's stock.
The accounting irregularities were discovered as the new management was preparing its first quarterly financial report. As stated, the company expects to restate results dating back to 1996 or even earlier.
The majority of the restatement will involve improperly booked expenses that won't affect shareholder's equity. But the remaining minority of the expenses will likely to reduce equity "significantly," the company cautioned.
The company also warned a small portion of the improper revenue recognition appears to involve non-performance issues.
"Only a few instances of irregularities have been uncovered affecting previously reported performance and merchandising revenues," the company said.
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Livent
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