Donnelly restates results

US automotive-parts maker Donnelly Corp. intends to restate results for previously reported periods to reflect an accounting change for an investment in Donnelly Electronics, Inc.. The company expects…

US automotive-parts maker Donnelly Corp. intends to restate results for previously reported periods to reflect an accounting change for an investment in Donnelly Electronics, Inc.. The company expects the restatement will reduce its previously reported net income for the 1998 and 1999 fiscal years, the six months ended Dec. 31, 1999, fiscal year 2000 and for the first quarter of 2001. Donnelly said it owned 18% of the electronics company before the end of February this year, when it acquired the remaining stake but did not include any of the unit“s losses in its results because of a previously used accounting method. The changes were suggested by the company“s auditors during a normal review of its accounting practices. The restated results will include all of the losses related to the electronics company that were funded by Donnelly. After Donnelly acquired the remaining stake, it began including all of the unit“s losses in its financial statements. As a result of the accounting changes, Donnelly will reduce its fiscal second-quarter net by 2 to 48 cents a share. The restatements will reduce Donnelly“s fiscal 2000 net by US$ 7.3 million and its fiscal first-quarter 2001 earnings by US$ 1.3 million. Fiscal 1998 and fiscal 1999 earnings will be reduced by about US$ 1.4 million and US$ 5.6 million, respectively. Earnings for the six months ended Dec. 31, 1999, will decrease US$ 2.7 million. The restatements will not effect the company“s future cash flow.