JNI Ousts Chief Over Sales Inflation
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JNI Corp., which makes equipment for data and storage networks, said it discovered it had overstated fourth-quarter sales by 4% and that its board had fired Chief Executive Neal Waddington as a result.
The news sent JNI shares down to as low as $4.70 in after-hours trading. The shares had closed off 27 cents at $5.37 on Nasdaq before the announcement.
The San Diego-based company said its fourth-quarter revenue was overstated by about $501,000 because of a single order, which was recognized as revenue in violation of JNI’s policy of not booking sales in which the customer had been granted a right of return.
Waddington granted that concession in a side agreement to the sale that was not disclosed to financial personnel within the company or auditors, JNI said.
The company did not identify the customer involved in the transaction.
As a result of a review by the company’s audit committee, JNI restated its revenue for the fourth quarter to $13 million from the initially reported $13.5 million, and restated its loss per share to 16 cents from the 15-cent loss reported earlier.
The company said it named John Stiska, a director and chairman of venture lending fund Commercial Bridge Capital, as interim CEO.
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