Tyco revises its financial data
From local and wire reports
NEW YORK — Tyco International Ltd., under scrutiny from the Securities and Exchange Commission, said on Monday that it revised its financial statements for 1999 and the fiscal first quarter of this year.
Although the SEC continues to investigate the company's accounting for acquisitions, shares of Tyco (TYC) rose Monday on the belief that the revision cleared up some of the uncertainty. Tyco, a conglomerate based in Bermuda but managed from Exeter, N.H., makes a wide range of goods, including electronics components, fire-protection systems and disposable medical supplies.
Last year, Tyco purchased Praegitzer Industries, which has a plant in White City, for $72 million.
Controversy over Tyco's acquisition-related accounting practices started in October, with the release of a critical report by a Dallas money-management firm, David W. Tice Associates, that frequently shorts stocks. Tyco stock, which had been a Wall Street favorite for years, fell sharply after that report. Tyco's stock fell again in December when Tyco said the SEC had launched an informal inquiry into its accounting practices.
Companies that had agreed to be acquired by Tyco — including electronic-devices maker AMP Inc. — took substantial charges just before they were incorporated into Tyco. Tice charged those moves allowed Tyco to show higher profits and growth rates in later quarters than it would otherwise have done.
Tyco, which last year said it welcomed the SEC inquiry and frequently defended its accounting as proper, said the revisions were made at the request of the SEC.
The changes increased Tyco's 1999 earnings by two cents a share and reduced first-quarter 2000 earnings by two cents a share. The revisions didn't affect sales, cash flow or operating earnings. Tyco also updated disclosures related to acquisition-related liabilities and charges.
In 1999 alone, Tyco did more than $14 billion worth of deals, including the $12 billion buyout of AMP. The company in December said the SEC's enforcement arm requested documents supporting the way Tyco has accounted for charges and reserves related to its acquisitions in the last six years. Tyco said it had acquired more than 120 firms during that period for more than $30 billion, and had taken about $3 billion in restructuring charges in conjunction with those deals.