Auditing

Fuel Systems Solutions Ponders Restating

Alternative fuels company, which is attempting to retain Nasdaq listing, thinks restatements reflecting stock-option accounting will "probably" inc...
Stephen TaubJuly 30, 2007

Fuel Systems Solutions warned that it will probably restate prior results to recognize non-cash charges for stock-based compensation expense.

The Santa Ana, Calif.-based alternative fuels company said the revisions would cover the 2001 to 2005 fiscal years, and each quarter in fiscal years 2004 and 2005. It added that the amount of the charges, the resulting tax and accounting impact, and the specific periods that require restatement cannot be determined with certainty and may be different than presently anticipated because it has not yet completed an internal review of its options practices.

The company said it is reviewing stock option grants from 1996 to 2006, and that the review has not been completed. The amount of any charges, the resulting tax, and accounting impact, and the specific periods that might require restatement at the conclusion of the review “cannot be anticipate,” it said. It added that the review “is being conducted under the oversight of a Special Committee of the Board of Directors with the assistance of outside legal counsel and accounting experts.”

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Fuel Systems, with a market capitalization of about $250 million, is a holding company for two operating subsidiaries, IMPCO Technologies and BRC Gas Equipment. Both entities offer products and systems to enable internal combustion engines run on clean burning fuels such as natural gas and propane.

The company also said that the Nasdaq exchange began delisting proceedings after it failed to file its 2006 annual report and its 2007 first-quarter report on time. But the company noted that Nasdaq’s Listing Qualifications Panel granted the company’s request for continued listing subject to certain conditions, including providing certain information to the Nasdaq Hearings Department by July 26. The company said it believes that it complied with this requirement on that day.