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Rambus to Restate Results

July 20, 2006|From Bloomberg News

Computer chip designer Rambus Inc. on Wednesday became the latest company to say it would restate prior financial results to correct accounting errors related to stock option grants to workers.

The company's shares plunged to their lowest price this year, sliding $2.83, or 14.4%, to $16.77.

Rambus said it would restate results going back to at least 2003 to correct costs for previous option grants.

The Los Altos, Calif.-based company said it would probably miss regulatory filing deadlines for second-quarter financial reports as its investigation of option practices continued.

However, the company said its revenue in the quarter was $48.9 million, up 22% from a year earlier.

Rambus is one of more than 65 companies under internal or federal scrutiny to determine whether option grants to executives and others were backdated to inflate their value to the employees.

An internal examination of grants determined that accounting controls were flawed, making financial reports since 2003 unreliable, Rambus said.

The true option costs, still undetermined, will be material, the company said.

Rambus said it might face delisting by Nasdaq because of the reporting delay for the second quarter. The report for the period ended June 30 is due Aug. 9 or, with an extension, Aug. 14.

Dozens of companies have said they are facing civil and criminal probes by regulators related to option practices.

On Tuesday, Rambus shares tumbled 9.3% after a judge cut a damage award that South Korea-based Hynix Semiconductor Inc. had been ordered to pay Rambus for patent infringement. The award was reduced from $307 million to $133 million. The judge said he found the jury's award unreasonable.

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