|
COVANSYS RECEIVES STAFF DETERMINATION LETTER FROM NASDAQ
Company Will Appeal Determination and Is Working to Complete its
Review and Analysis of Accounting Issues Regarding Certain Property
and Equipment
FARMINGTON HILLS, MI, May 27, 2004 – Covansys Corporation
(NASDAQ: CVNS), a leading global provider of strategic outsourcing
and integration services, today acknowledged the receipt of a Nasdaq
Staff Determination letter dated May 26, 2004, notifying the Company
that it has not complied with Marketplace Rule 4310(c)(14) requiring
the timely filing of its Form 10-Q for the period ended March 31,
2004 with the Securities and Exchange Commission (“SEC”).
As a result, the Nasdaq Staff has indicated that the Company’s
ticker symbol will be changed from CVNS to CVNSE at the open of
business on May 28, 2004. Further, the Company has been put on
notice that its securities will be delisted from the Nasdaq Stock
Market at the open of business on June 4, 2004, unless the Company
appeals the Staff’s determination at a hearing before a Nasdaq
Listing Qualification Panel. Covansys intends to appeal the Staff’s
determination at such a hearing. As a result of this appeal, the
Company’s securities will continue to be listed pending the
Panel’s final determination. There can be no assurance that
the Panel will grant the Company's request for continued listing.
The delay in filing the Company’s Form 10-Q for the period
ended March 31, 2004 is the result of a recently completed physical
inventory of its fixed assets. Covansys is working to resolve issues
surrounding the proper accounting treatment for physical losses
and obsolescence of certain of the Company’s property and
equipment, mainly computers and related peripherals previously
reported as having a current net book value of approximately $2.5
million (an original cost of $15.7 million), or less than 1% of
total assets.
On May 17, 2004, Covansys released selected first quarter operating
results and announced the delay in filing its Form 10-Q for the
period ended March 31, 2004. The Company intends to file its Form
10-Q as soon as possible following final resolution of these issues,
thereby allowing it to return to compliance with Nasdaq filing
requirements.
About Covansys
Covansys Corporation, (NASDAQ: CVNS), is a global consulting and
technology services company specializing in industry-specific
solutions, strategic outsourcing and integration services through
a unique onsite, off-site, offshore delivery model that helps
clients achieve rapid deployment, world-class quality and reduced
costs.
Founded in 1985, Covansys has successfully delivered an array
of innovative and cost-effective business and technical solutions
to leaders in the private and public sectors. With one of the largest
offshore capabilities of any technology services provider based
in the United States, Covansys has achieved the SEI’s CMM® Level 5 quality ratings at two of its offshore development centers
in India.
Safe Harbor Statement
With the exception of statements regarding historical matters and
statements concerning our current status, certain matters discussed
herein are forward-looking statements that involve substantial
risks and uncertainties. Such forward-looking statements may
be identified by the words “anticipate,” “believe,” “estimate,” “expect” or “intend” and
similar expressions. Our actual results, performance or achievements
could differ materially from these forward-looking statements.
Factors that could cause or contribute to such material differences
include general economic conditions and conditions in the IT industry
such as the demand for IT services, public sector government budgetary
constraints, potential cost overruns on fixed-price projects, effective
application of the percentage of completion method of accounting
for fixed priced contracts, risks related to merger, acquisition
and strategic investment strategy, variability of operating results,
government regulation of immigration, exposure to regulatory, political
and economic conditions in India and Asia, competition in the IT
services industry, the short-term nature and termination provisions
of contracts, economic conditions unique to clients in specific
industries and limited protection of intellectual property rights.
These and other factors are described in the Company’s filings
with the U.S. Securities and Exchange Commission.
FOR FURTHER INFORMATION:
Investors
David Roady
(248) 848-2221
droady@covansys.com
Media
Laura Livingstone
Senior Communications Director, Covansys
401-457-8514
llivings@covansys.com
|
