Brooks Restates Financials Due to Stock Option Missteps
Staff Reporter -- EDN, May 12, 2006
In light of recent investigation in semi companies’ stock option practices, Brooks Automation Inc. has announced it will restate its financial statements from fiscal years 1999 through 2005.
Based on a report on May 10 from the special committee of its board of directors concerning the work done to date, the company will be required to correct certain SEC filings, particularly its financial statements for fiscal years 1999 through 2005. Because of the pending restatement, these financial statements and all earnings press releases and similar communications issued by Brooks relating to the questioned period, should not be relied upon, the company stated.
Brooks believes that it accounted for certain matters concerning stock options incorrectly, and as a result recognized less compensation expense than it should have in periods prior to this fiscal year. The company is in the process of determining the impact of the errors and evaluating the impact of this matter on its system of internal controls.
The company also announced that it filed with the SEC a Form 12b-25 that states that it did not timely file its Form 10-Q for the period ending March 31. The company expects to file this fiscal year’s Form 10-Q as soon as is can after the special committee's review is complete.
A number of companies have been investigating their stock option programs in the wake of a March 18 Wall Street Journal article published indicating potential options backdating activity at several companies, including Mercury Interactive Corp, Brooks Automation Inc. and Vitesse Semiconductor Corp.
On April 27, Camarillo, Calif.-based communications chip provider Vitesse announced its previously reported financial statements for the three months ended December 31, 2005, and the three years ended September 30, 2005, and possibly earlier periods should not be relied upon. The company appointed a special committee of independent directors to conduct an internal investigation to be assisted by an independent legal counsel. The company also announced that it had put on “administrative leave” Vitesse’s founder and current CEO Louis Tomasetta, CFO Yatin Mody and the Executive VP Eugene Hovanec.
Days later, Vitesse shareholders announced they were preparing a class action lawsuit against the chip provider for omissions of faulty financial reporting.
San Jose-based programmable logic provider Altera Corp. is also reviewing its stock option practices and issues concerning options granted during the period 1996 through 2000, and said it would not be able to file its Form 10-Q for Q1, which was due this week.
