Coherent to Restate Over Backdating

Laser company will adjust 12 years worth of financial statements.
Stephen TaubOctober 1, 2007

Coherent Inc. said Friday that it expects to restate certain previously issued financial statements to correct errors related to the backdating of stock options. The restatement will reflect additional non-cash compensation totaling between $22 million and $28 million pre-tax, the laser manufacturer said. As a result, it warned that financial statements for the fiscal years 1995 through 2005, and the fiscal quarters ended July 1, 2006, April 1, 2006, and Dec. 31, 2005, should no longer be relied upon.

A significant majority of the charges result from changes to the measurement dates of stock options granted before the end of fiscal year 2001, with more than half of the non-cash compensation arising from stock options granted in fiscal 2000, according to the company. A special committee Coherent set up to look into the stock options matter determined that incorrect measurement dates were used for “a significant number” of awards.

The company disclosed last September that the Securities and Exchange Commission had launched an informal inquiry into its past granting of stock options. The committee found the incorrect measurement dates resulted from several factors, including delays in award approvals, retroactive selection of grant dates, missing documentation, and modification of previously awarded grants.

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Meanwhile, Coherent, which is late with a number of regulatory filings, said it will file its annual report for the fiscal year ended September 29, 2006, as well as its first three quarterly reports for the 2007 fiscal year, as soon as practicable. In August, Coherent said it had received a default notice from the trustee for the holders of its $200 million convertible subordinated notes due to the company’s failure to file the late reports with the Securities and Exchange Commission.

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