PMC-Sierra Finds Options Dating Errors, Delays 10-Q

Staff Reporter -- Electronic News, 8/14/2006

An internal review conducted by high-speed broadband communications and storage chips provider PMC-Sierra Inc. has found errors in the dating of the company's stock options grants. 

According to a statement released today by the company, however, the audit committee has concluded that, while PMC-Sierra used incorrect accounting measurement dates for certain stock option grants awarded primarily during the years 1998 to 2001, those errors were not the product of any deliberate misconduct by the company's executives, staff or members of its board of directors.

As a result of the committee's findings, the company is applying new accounting measurement dates to the affected option grants. Because the majority of the stock options in question were cancelled in an option exchange program in 2002, new measurement dates will not affect operating results for 2003 and subsequent years.

The company expects to make accounting adjustments to stockholders' equity as at Dec. 31, 2002 and on the balance sheets for all subsequent periods. The amount of the adjustment within stockholders' equity should be less than $100 million, the company said.

As a result of the recent stock options snafu, PMC-Sierra did not file its Form 10-Q with the Securities and Exchange Commission (SEC) on the due date of August 11.

PMC-Sierra is not the only company that has missed the SEC's 10-Q deadline last week as a result of the industry's stock options backdating shakeup. Apple, Broadcom, Altera and Rambus are among the list of companies that have delayed the regulatory filing for Q2 as a result of the current scandal.