Digital River 8-K 2010
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Pursuant to Section 13 or 15(d) of
the Securities Exchange Act of 1934
Date of Report (date of earliest event reported): February 19, 2010
DIGITAL RIVER, INC.
(Exact Name of Registrant as Specified in Its Charter)
9625 West 76th Street, Eden Prairie, Minnesota 55344
(Address of principal executive offices) (Zip Code)
(Registrants telephone number, including area code): (952) 253-1234
(Former name or former address, if changed since last report)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):
Item 4.02. Non-Reliance on Previously Issued Financial Statements or a Related Audit Report or Completed Interim Review.
On February 19, 2010, the management of Digital River, Inc., a Delaware corporation (Digital River or Company) concluded, and the Audit Committee of the Board of Directors concurred, that the previously issued condensed consolidated financial statements of Digital River covering the period ended March 31, 2009 contain an incorrect accounting entry.
In performing the annual review of the financial statements, management identified that it had incorrectly recorded the write-off of unamortized debt financing costs related to the repurchase of convertible notes on January 2, 2009. After the Company announced preliminary full year financial results on January 28, 2010, management determined that a $5.2 million non-cash expense for debt financing costs ($3.3 million net of tax) was incorrectly charged to additional paid-in capital and should have been expensed to other non-operating expense. Year-to-date results for all subsequent periods should have also reflected this non-operating expense.
As noted in Item 7 and Item 8 of the Companys 2009 Annual Report on Form 10-K filed with the SEC on February 23, 2010, the Company revised the unaudited results it previously released on January 28, 2010. The impact of this change was a reduction in both the first quarter and the full year GAAP earnings of $3.3 million after tax, or $0.09 per diluted share. The first quarter 2009 GAAP earnings were revised to $13.3 million, or $0.36 per diluted share. The full year 2009 GAAP earnings were reduced to $49.8 million, or $1.32 per diluted share. There was no change to previously released non-GAAP earnings.
An unaudited table presenting the effects of the revisions to the Companys condensed consolidated statement of income for the three months ended March 31, 2009 is set forth below:
Digital Rivers principal financial officer and the Audit Committee discussed these matters with Digital Rivers independent registered accounting firm.
Item 9.01 Financial Statements and Exhibits.
Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
Date: February 23, 2010