NaviSite Inc. says it will restate previous results after determining that costs of lining up debt financing from Silver Point Finance last year were not classified in accordance with generally accepted accounting principles. Totaling about $4.9 million, the costs were incorrectly included under cash flows from operating activities, whereas they should have been presented as a net debit against the cash proceeds received from the debt financing, says NaviSite.
The company, which provides outsourced Web and E-commerce services, plans to revise its cash-flow statements for the fiscal year ended July 31, 2006, and for the nine months ended April 30, 2006.
The revisions will not have an impact on the company’s balance sheet, consolidated statement of operations, or consolidated statement of changes in stockholders’ equity. NaviSite will include the corrected financial information in its Form 10-K for the year ended July 31, 2007, and that report will be filed no later than October 29, according to the company. However, it noted that the time required to complete the restatement will depend in part upon its auditor, KPMG, completing its audit of the restatement.
NaviSite closed on a deal with Silver Point Finance in March 2006 for a $70 million term loan facility with warrants and a $3 million revolving credit facility.