(Business 2.0) – GODTHAB, Greenland--KringleTech Worldwide, the North Pole corporation formerly known as St. Nicholas LLC, announced after yesterday's market close that it would restate its financial results for the previous two years.

After months of denials, the company acknowledged its troubles in a press release that attributed the discrepancies to a variety of factors. Foremost among them was Federal Reserve Board chairman Alan Greenspan's recent revaluation of the Juvenile Virtue Index (JVI). Previously assessed at just over $36 per good tot and about $27 for each naughty one, revenues generated by the JVI are KringleTech's lifeblood. Citing the adverse influence of such factors as "that grimy little strumpet Christina Aguilera" and "the thoroughly disturbing popularity of that vibrating Harry Potter Nimbus 2000 'broom,'" Mr. Greenspan lowered the rates to $19 and $1.77, respectively. The company also stated that it is reviewing its decades-old practice of recognizing sales at the moment a child's good behavior is documented, as opposed to the time of actual payment to retailers.

Although KringleTech has seen its global dominance slip steadily from its apex in the immediate post-World War II boom, it remains largely responsible for the distribution of Christmas presents to the planet's well-behaved children. While the company did not disclose the exact amount of the overstatement, it's likely that the sum will be unprecedented, according to an independent team of forensic accountants. In heavy after-hours trading yesterday, shares of KTWW plunged 620 percent to a record low of 19 cents.

Industry analysts said the announcement came as little surprise, given KringleTech's rocky performance of late. Many said the company's decline could be traced to the dilution caused by its late-1990s decision to extend the St. Nicholas brand. Failed ventures, among them Santa's Kwanzatorium and the Hanukkah Hut, depleted its already strained coffers. The Anchorage district office of the Securities and Exchange Commission is investigating whether these losses were improperly concealed within the income statement of an offshore subsidiary based on the Island of Misfit Toys, a mythic principality of no fixed location.

Still others said the problems stem from KringleTech's failure to keep up with the times, as evidenced by its superannuated accounting practices. The company has steadfastly refused to adopt a computerized system to track inventory and deliveries, relying instead on a large velvet-bound book in use for well over a century. KringleTech is also showing signs of strain from a protracted dispute with its chief labor union, the Amalgamated Federation of Truncated Craftspeople, regarding unfunded liabilities in the group's pension plan and a management proposal that would lower the mandatory retirement age to 300.

"K-Tech's always been a special case, of course," said Piper Jaffray fictitious markets analyst Pamela Pfeifer-Fahey. "But it was only a matter of time before it caught up with them. They've never really been able to produce documentation and say, demonstrably, 'This is how we make our money.' They've never come clean about servicing literally billions of customers, many of whom seem not even to have the requisite chimney apparently so vital to any and all K-Tech transactions. They've never even been able to credibly explain how they manage their global market saturation while in formal operation only one night a year. Moreover, they have a CEO whose very existence remains in dispute."

To be sure, KringleTech's long history of market leadership suggests that the company may well be able to weather the storm. And publicly, at least, its executives seem unfazed by the controversy. "My father-in-law definitely exists," said communications director Deborah Saperstein-Kringle. "Once we clear things up and generate a true accounting, I guarantee you that our investors will be thrilled. Mark my words: By the end of the month, they'll all have visions of sugarplums dancing in their heads."

Yesterday's announcement could not have come at a more inopportune time. Analysts likened KringleTech's situation to that of another beleaguered firm, Never Never Land-based PanCorp, whose shareholders--their faith shaken when the firm's accounting irregularities came to light this summer--stopped clapping, indicating that they no longer believed in fairies. Shares of PanCorp were rendered virtually worthless overnight. The company filed for Chapter 11 bankruptcy protection in August, and PanCorp's chief financial officer, Tinker Bell, died.