Summary
Lam Research Corporation (LRCX) has filed an 8-K report on December 24, 2007, announcing that its previously issued financial statements for fiscal years 1997 through 2005, and interim periods within those years, should no longer be relied upon. This decision stems from a review of historical stock option practices by an independent committee of the Board of Directors. The committee has preliminarily concluded that the actual measurement dates for certain stock option grants differ from the recorded grant dates for accounting purposes. While the assessment of conduct is ongoing, the preliminary view suggests no intentional misconduct by management. The company expects to restate its financial statements to record non-cash compensation expenses related to past stock option grants. The majority of these adjustments are expected to relate to options granted prior to fiscal year 2003. Lam Research is working with its independent auditor, Ernst & Young LLP, to finalize the restatement and become current with its filings. Investors should be aware that the specific amounts of the charges, tax implications, and the precise periods requiring restatement are still under determination.
Key Highlights
- 1Lam Research is restating financial statements for fiscal years 1997-2005 due to issues with historical stock option practices.
- 2An independent Board committee found that the accounting measurement dates for certain stock options may not align with the recorded grant dates.
- 3The company expects to record non-cash compensation expenses related to these stock option grants.
- 4The majority of the identified issues pertain to stock options granted before fiscal year 2003.
- 5Preliminary findings indicate no intentional misconduct by management.
- 6Lam Research is working with its auditor, Ernst & Young LLP, to complete the restatement and update its filings.
- 7The exact financial impact and the specific periods to be restated are still being determined.