Running late…

November 18, 2003

Yesterday, on the Stock Dr. radio show , I was asked why it was such a big deal when a company missed the deadline to file its 10-Q or 10-K. Companies currently have 45 days for the Q and 90 for the K, though that’s going to start changing next year. On Friday — the deadline for companies whose quarters ended Sept. 30 — I counted more than 1,000 filings, so it’s clear that the overwhelming majority of companies take the deadline seriously. And they should: even with the trend toward more disclosure, 45 days should be more than enough time, given that these companies aren’t exactly adding things up on an abacus. Three companies that I’m aware of — Outback Steakhouse (OSI) , Metris (MXT) , and Silicon Imagaing (SIMG) — initially said they would miss the Friday deadline. Outback wound up filing on Monday morning, which still counts as being late, though investors were much more forgiving. Not so with Metris and Silicon Imaging, whose shares fell 13% and 28% respectively. All three had to do with revenue recognition or accounting for expenses, areas where “mistakes” often tend to be made. At Outback and Metris, the companies said the delay was due to SEC inquiries. At Silicon Imaging, the delay was due to the company’s audit committee asking questions about the way the company recognized revenue. As bad as that may sound to investors, it’s nice to see an audit committee begin to take things more seriously.

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