Par Pharmaceutical to restate financial results

By Elaine Rigoli

Tampa, Fla., July 5 - Par Pharmaceutical Cos., Inc. said it will restate the financial results for fiscal years 2004 and 2005 and the first quarter of 2006 after an internal review of its trade accounts receivable balances revealed accounting errors.

This restatement will also delay the filing of Par's second-quarter form 10-Q with the Securities and Exchange Commission.

The company said the restatement is due to an understatement of accounts receivable reserves, which resulted primarily from delays in recognizing customer credits and uncollectible customer deductions.

The company expects that the effect of the restatement adjustments to its accounts receivable will be to reduce revenues by an amount up to $55 million over the applicable periods, prior to any potential recoveries.

Because Par has profit-sharing arrangements with a number of its business partners, the overstatement of revenues has resulted in Par overpaying its business partners in some instances.

Accordingly, the company said it will attempt to recover from those business partners a share of profits from products included in the overstated revenues.

Par, based in Woodcliff Lake, N.J., develops generic drugs and branded pharmaceuticals for specialty markets.

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