Criticare Systems, Inc. (CMD) Announces a Correction to the Preliminary, Unaudited Fiscal 2007 Fourth Quarter and Year End Net Sales Statement Issued July 26, 2007
9/24/2007 7:11:42 AM
MILWAUKEE--(BUSINESS WIRE)--CRITICARE SYSTEMS, INC. (AMEX:CMD). Criticare Systems, Inc. today announced a correction to the preliminary, unaudited net sales for the quarter and year ended June 30, 2007.
It was determined on Thursday, September 20, 2007 that a $1,874,000 order by the ministry of health of the Republic of Iraq shipped in the fourth quarter of fiscal 2007, an order in which payment has been secured by a confirmed letter of credit, did not meet all the strict criteria for revenue recognition in accordance with SAB No. 104. Due to the size and risks associated with a contract of this nature, the Company obtained a confirmed letter of credit to secure payment. As a result, while the order met the revenue recognition criteria of ensuring collectibility, the terms of the letter of credit did not allow the transfer of title to occur until after June 30, 2007. The preliminary, unaudited fiscal fiscal 2007 fourth quarter and year end net sales previously stated on July 26, 2007 were $9,500,000 and $33,290,000, respectively. As a result of the revenue recognition criteria for this order not being met during the fourth quarter of fiscal 2007, the preliminary, unaudited fiscal 2007 fourth quarter and year end net sales will be reduced to $7,626,000 and $31,416,000, respectively. The majority of this sale will be included in the first quarter results for fiscal 2008.