CompuDyne to Record an Impairment Charge for its Public Safety and Justice Segment
20 Marzo 2007 - 6:00AM
Business Wire
CompuDyne Corporation (NASDAQ:CDCY), an industry leader in
sophisticated security products, integration, and technology for
the public security markets, announced that on March 15, 2007 its
Board of Directors concluded that it will record impairment charges
against goodwill and other intangible assets associated with its
Public Safety and Justice segment in the fourth quarter of 2006.
This segment has embarked on a major overhaul of its suite of
existing software products to a �Microsoft.net� software platform
from their current platform. As a result of this undertaking, for
which the costs incurred to date have been expensed, reported
earnings have been depressed temporarily and thus the Board of
Directors has concluded that an impairment charge is required. We
currently estimate the impairment charges to total $16.1 million
against its goodwill and other intangible assets as required by
GAAP. A formal impairment analysis is occurring in connection with
the preparation of the Company�s financial statements for the year
ended December 31, 2006. In recent months the Company has received
market indications that this business segment may actually be worth
in excess of its current carrying value. The Company is required,
however, to comply with GAAP and record a book value impairment
charge. Certain statements made in this press release constitute
"forward-looking statements" within the meaning of the Private
Securities Litigation Reform Act of 1995, including those
statements concerning the Company�s expectations with respect to
future operating results and other events. Although the Company
believes it has a reasonable basis for these forward-looking
statements, these statements involve risks and uncertainties that
cannot be predicted or quantified and consequently, actual results
may differ materially from those expressed or implied by such
forward-looking statements. Factors which could cause actual
results to differ from expectations include, among others, capital
spending patterns of the security market and the demand for the
Company�s products, competitive factors and pricing pressures,
changes in legislation, regulatory requirements, government budget
problems, the Company�s ability to secure new contracts, the
ability to remain in compliance with its bank covenants, delays in
government procurement processes, inability to obtain bid, payment
and performance bonds on various of the Company�s projects,
technological change or difficulties, the ability to refinance debt
when it becomes due, product development risks, commercialization
difficulties, adverse results in litigation, the level of product
returns, the amount of remedial work needed to be performed, costs
of compliance with Sarbanes-Oxley requirements and the impact of
the failure to comply with such requirements, risks associated with
internal control weaknesses identified in complying with Section
404 of Sarbanes-Oxley, the Company�s ability to realize anticipated
cost savings, the Company�s ability to simplify its structure and
modify its strategic objectives, and general economic conditions.
Risks inherent in the Company�s business and with respect to future
uncertainties are further described in its other filings with the
Securities Exchange Commission, such as the Company�s Form 10-K,
Form 10-Q, and Form 8-K reports.
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