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Diligent misses filing date for first-half earnings, shares drop to 9-month low

Friday 30th August 2013

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Diligent Board Member Services, the governance app maker hit by a slew of administrative missteps, has missed a deadline to file earnings with the New Zealand stock exchange while it reworks its accounts for the past three financial years to change how it recognises revenue.

Diligent was refused a stock exchange waiver for missing yesterday's deadline to file its preliminary first half earnings report, however the exchange said it will take no action against the firm delaying the report until Oct. 28, the New York-based company said in a statement.

Diligent advised earlier this month that it would restate its financial statements for the 2010, 2011 and 2012 financial years and the first quarter of 2013 to correctly recognise customer revenue from the date a contract is signed rather than the start of the month, to recognise revenue from installation fees over a longer period of time and to properly capitalise costs associated with software developed for internal use.

The company said today it will endeavour to provide selected operating highlights for its third quarter in the first two weeks of October.

Shares in Diligent dropped 13 percent to a nine-month low of $4.20, making it the worst performer on the benchmark NZX 50 Index today.

Diligent said both the stock exchange and the Financial Markets Authority had agreed to take no action against the company for not complying with a rule that its auditor Deloitte & Touche be registered under the Auditor Regulation Act. As Deloitte is a limited liability partnership, it is unable to register under the act, the company said.

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