TriTeal Investors Face Revenue ‘Errors’

Beleaguered investors in Carlsbad-based TriTeal Corp., which has lost more than 90% of its market value in the last year, are braced for another shock today. The software developer said after the market closed Friday that it had “discovered errors” in its revenue for the fiscal year ending March 1997.

As a result of those errors, TriTeal said it will restate new earnings that will, taken together, be negative for the company’s balance sheet. Those changes may also affect financial results for the first two quarters of fiscal 1998, the company said in a statement issued late Friday.

The company said the changes were primarily due to restated revenue from software licenses. The company develops, markets and supports desktop system software designed to integrate business computer systems.

“Based upon information which is presently available, the cumulative effect of the restatements to revenue is expected to materially and adversely affect revenues and previously reported income or loss for the periods to be restated,” the company said.

Once a highflying company, TriTeal saw its stock price more than double in just six months to $23.25 a share in January 1997 from its initial public offering price of $8 a share on Aug. 6, 1996.

But after reaching that January high, TriTeal’s stock price dropped steadily during the rest of 1997. It closed on Friday at $1.38 a share in Nasdaq trading.

Last November, shareholders filed a class-action suit against TriTeal and some of its officers, directors and underwriters, charging that TriTeal’s stock price had been artificially inflated.

On Friday, TriTeal said its independent auditor, Ernst & Young, had withdrawn its report for fiscal 1997 but will work with TriTeal to promptly determine the correct figures.

TriTeal also said it had hired Osnos & Co., a management specialist, to work with the company and the board of directors.

A spokesman for the company who was reached Sunday said TriTeal has no further comment.