Atmel Expects Big Financial Restatement

By Colleen Taylor -- Electronic News, 10/31/2006

Atmel Corp. will have to pay the price for being one of many tech companies that have uncovered a history of backdating stock options.

Based on a preliminary determination from the audit committee conducting the company's independent investigation of its stock option grant practices, Atmel said Monday that it expects that the backdating discovery will result in a big restatement of its financial records that will likely include monetary charges.

The company said that because backdating errors have been found, Atmel's financial statements for 2003 through 2005, plus Q1 2006, should no longer be relied upon. Atmel said it would restate financials for those years, as well as pervious years.

And it's not over yet for the troubled company. Atmel said its committee's review has not yet wrapped up, and that all the stock options that have been backdated have not yet been identified. As a result, the company has not yet put a dollar amount on how much in additional stock-based compensation expenses will need to be recorded or the tax consequences of the compensation.

This week’s news comes after other tech companies have announced similar findings. Indeed, last month Broadcom Corp. announced that it will pony up $1.5 billion in additional non-cash stock-based compensation expenses as it restates years of financial reports now sullied by evidence of backdating.

Rocky Road for Atmel
It has not been an easy few months for Atmel. In August, George Perlegos made a very dramatic exit from his posts as CEO, president and chairman of the board. Perlegos had been asked to step down from the company's board and his position as chair after being fired from Atmel's president and CEO posts for allegedly misusing company travel funds. Perlegos then resigned from the board in a heated letter. 

Although rocky, Perlegos' exit was actually beneficial to Atmel. As a result of his resignation, the company was notified by the Nasdaq stock market that it had regained compliance with the stock exchange.

Although Atmel asserted that Perlegos' ousting had nothing to do with its stock options backdating issues, a number of other industry executives have made exits from long-standing posts at tech companies as fishy stock options activities have come to light.