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  BearingPoint, which reported preliminary results for 2005 and an update on its second-quarter performance, said higher-than-expected accounting and finance charges will result in 2006 operating income falling “significantly below” the low end of its previous guidance.
Consulting-Times E-zine

BearingPoint withdraws 2006 revenue forecast

BearingPoint also said it will delay filing its annual 10-K financial report for fiscal 2005, after a New York state court ruled the company was in default on its 2.75 percent series B convertible subordinated debentures due 2024.

Preliminary 2005 unaudited results show gross revenue grew about 1 percent to $3.4 billion. BearingPoint is forecasting a 2005 loss of $650 million to $720 million.

For this year's second quarter, bookings were $811 million, down only slightly from the first quarter. BearingPoint withdrew its previous 2006 guidance due to the uncertainties related to the default ruling.

With respect to revenue, Harry You, BearingPoint CEO, said: “Before the uncertainty created by the recent court decision and the issues it has raised, we were on track to meet our previously disclosed 2006 revenue guidance.”

BearingPoint said it hopes to become current with its SEC filings by late spring of 2007, at the earliest.

The court found BearingPoint failed to file certain SEC reports on time, thereby defaulting on the debenture. The court said the amount of damages to the series B debentures would be determined at trial at a later date.

In a filing with the Securities and Exchange Commission, the company said it will appeal the court's decision.

“We respectfully but strongly disagree with the decision not to dismiss this claim and are appealing the order. It is important to note the court did not order an acceleration of the debentures nor grant the request to award damages,” said You. “The new uncertainties and risks created by this lawsuit are unacceptable to the company, our lenders, our other debentures holders, shareholders, and employees.”
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