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Nvidia Restatement Raises Net Income for 3 Fiscal Years

Accounting: Company's review, in response to a federal inquiry, results in a $1.3- million increase.

April 30, 2002|MATTHEW FORDAHL | ASSOCIATED PRESS

SAN JOSE — Graphics chip maker Nvidia Corp. said Monday that it is restating its financials for fiscal 2000, 2001 and parts of 2002, resulting in a $1.3-million boost in net income over the period.

The Santa Clara-based company, which saw its stock quadruple last year, announced in February that it had launched an internal review of its books after federal regulators began an inquiry.

The firm also said it expects to net earnings of $79 million to $84 million, or 45 cents to 48 cents a share, on sales of $570 million to $580 million in its fiscal first quarter of 2003, which ended Sunday.

Analysts were expecting profit of 42 cents per share on sales of $534 million, according to a survey by Thomson Financial/First Call.

Shares of Nvidia surged $5.06, or more than 16%, to $35.43 in Monday trading on the Nasdaq Stock Market.

Net income for fiscal 2002 will increase about $2.1 million, or 1 cent per diluted share. Earnings for fiscal 20001 will decrease by about $3.7 million, or 3 cents a share. And profit for fiscal 2000 will increase by about $2.9 million, or 2 cents per share.

The internal investigation was conducted by the company's audit committee, which is made up of independent members of the board of directors.

"We were given unlimited access to Nvidia's people and documents, and without exception all the people at Nvidia cooperated fully," said William J. Miller, a committee member.

The restatement resulted from typical mistakes in accounting, uncertain evidence to support estimates, arguable but good-faith accounting decisions and past audit adjustments, Miller said.

Nvidia said Monday that its chief financial officer, Christine Hoberg, is taking a leave of absence but declined to elaborate. The company's controller, Mary Dotz, will serve as interim CFO until a replacement is found.

The company also said a pricing dispute with Microsoft Corp. over the Xbox gaming console was being submitted to arbitration.

Microsoft is asking that Nvidia supply chipsets in whatever quantities ordered by Microsoft and at a lower price than Nvidia is willing to accept. The software giant also is seeking undisclosed damages.

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