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Diligent won't meet deadline for first-half results, sees Feb. 28 delivery date

Wednesday 4th December 2013

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Diligent Board Member Services, the governance software developer, says it won't meet a Dec. 12 deadline to release its first half results and now expects then to be as late as Feb. 28, when it is due to publish its full-year report.

The company said NZX has indicated it won't suspend trading in Diligent's shares provided it meets the new Feb. 28 deadline. The delay comes as it ploughs through a major exercise to restate its results for fiscal 2010, 2011 and 2012 to adjust for revenue that was recognised earlier than is accepted under US GAAP rules.

"The restatement process is very complex and time consuming and involves reviewing the recognition of revenue for approximately 20,000 transactions over the period covered by the restatement," the company said.

"Due to limitations in the company's legacy accounting systems, extensive manual spreadsheet entries are necessary in order to recalculate revenue and deferred revenue using the new revenue recognition conventions," it said. The "revenue recognition errors" identified by Diligent don't affect the total revenues ultimately earned or to be earned.

The delays mean shareholders have limited information about the performance of the company. While it can't disclose detailed financial results because of the ongoing restatement process, it does expect to be able to release "selected operating highlights for the company's fourth quarter" in mid-January.

"We are looking forward to providing investors information about the performance of our business and initiatives for future growth," said chief executive Alessandro Sodi. Still, "until the restatement process is complete, our ability to provide business information to our shareholders is limited because of disclosure laws in New Zealand and the US that prohibit us from providing financial information that might be deemed to be incomplete."

The company last announced a delay in completing its financial statements in October.

The shares declined 5.2 percent to $3.65 and have fallen 30 percent this year.

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