Reynolds and Reynolds Co. now says it will cost $94 million to pull the plug on its next-generation software system for automotive dealerships.
The price for the pullout rose another $27 million according to a company statement released Oct. 27. The company also said its financial statements are being reviewed by the U.S. Securities and Exchange Commission.
The technology and financial troubles are another headache for Reynolds' new CEO, Finbarr O'Neill, who has been shaking up the company's management team since taking the helm in January. Reynolds is one of the two largest dealership management system vendors.
In August the company said it would discontinue its new dealership management system, called Reynolds Generations Series Suite. Reynolds also said it would write off $67 million in software development costs for the system in the fourth quarter of its 2005 fiscal year, which ended Sept. 30.
Now the Dayton, Ohio, company says it will record in the fourth quarter about $27 million of additional expense related to discontinuing the software.
It was perhaps the biggest decision for O'Neill in his short tenure, which began Jan. 17. O'Neill previously was CEO of Mitsubishi Motors North America Inc.