CPE Engineers Plans to Restate $1-Million Loss

CPE Engineers Inc., of Irvine, formerly VTN Corp., plans to restate its previous earnings, paring down what would have been nearly a $1-million loss for the first full quarter under its new management.

Al Rattan, the Anaheim builder who purchased control of VTN last August, said the restatement--which still must be approved by the company’s outside auditors--would leave CPE Engineers with only a slight loss for the second quarter of its fiscal 1985, and would spread most of the $1-million deficit over the previous five quarters. The 1985 second quarter ended Nov. 30.

Rattan said the restatement reflects losses incurred under previous management that are only now being discovered. Without the restatement, he said, the losses would tarnish the company’s performance under its new management.

The restatement, expected to be ruled on early next week by CPE’s accounting firm, Ernst & Whinney, would boost fiscal 1984 losses of VTN by about $250,000, to a new total of nearly $800,000, Rattan said. Losses for the first quarter of fiscal 1985, originally reported at $257,330, would increase by nearly $750,000 to a new total of about $1 million.

Rattan, who purchased controlling interest in VTN just two weeks before the Aug. 31 end of the company’s fiscal 1985 first quarter, said in an interview this week that he expects the company to post profits in the third and fourth quarters because of earnings from large new engineering contracts, as well as from its new retirement-community development arm.

New Retirement Developments

Rattan said that CPE Engineers and its VTN Land Planning and Continental Retirement Community divisions are developing three retirement communities with a total construction value of $42 million. Two of them are in Orange County--in Anaheim Hills and Laguna Hills--and the third is in Santa Rosa.

In addition to changing the company’s name to CPE Engineers and adding a construction division and the new retirement community subsidiary, Rattan and his management team ended VTN’s involvement in overseas land planning and development when they took over.

Rattan said that about 70% of the losses that may be added next week to the company’s restated earnings came from overseas projects, mainly in Kuwait and Saudi Arabia.