Human Capital & Careers

Nvidia to Restate to Fix Options Errors

The semiconductor maker's audit committee had found instances of the use of incorrect measurement dates for certain grants.
Stephen TaubNovember 1, 2006

Nvidia Corp. expects to restate its financial statements for certain periods to correct errors linked to it accounting for stock-based compensation expense.

The semiconductor maker said the affected periods are the fiscal years 2004 through 2006, selected financial statements for earlier years, and the first quarter of fiscal 2007 that ended April 30, 2006

The company also warned that all of its financial statements and related communications going back to January 31, 1999 shouldn’t be relied upon. The $12 billion market capitalization company also reported that it will take non-cash charges of less than $150 million for stock-based compensation expense, net of related tax effects.

Further, the company stated that its audit committee has finished its forensic review of the option grants and is working with management to get a final fix on the financial impact of using incorrect measurement dates. The committee earlier found instances of the use of incorrect measurement dates for certain option grants.

The company pointed out, however, that there are no concerns about the integrity of current management. NVIDIA reported $302 million in net income in January 2006, its fiscal close. That was triple the $100 million it earned the prior year.