Summary
NVIDIA Corporation has filed an 8-K report on November 6, 2006, announcing its intention to restate previously issued financial statements. This restatement pertains to fiscal years 2004 through 2006 and selected earlier years, as well as the first quarter of fiscal 2007. The primary reason for the restatement is the correction of errors related to accounting for stock-based compensation expense, specifically the incorrect determination of measurement dates for certain stock option grants. The company estimates the aggregate non-cash charges to be less than $150 million, net of tax effects, and does not anticipate a material impact on current fiscal year operating results, revenues, or cash position. The Audit Committee's review, initiated in June 2006 following management's internal review, covered stock option practices from the company's IPO in 1999. While instances of incorrect measurement dates were found, the review concluded no concerns regarding the integrity of current management. Investors should be aware that previously issued financial statements and related communications for periods from January 31, 1999, onwards, including reports from both former and current auditors, should not be relied upon. NVIDIA intends to file its restated financials and delinquent second-quarter fiscal 2007 report promptly.
Key Highlights
- 1NVIDIA will restate financial statements for fiscal years 2004-2006 and earlier selected periods, plus Q1 Fiscal 2007.
- 2The restatement is due to accounting errors in stock-based compensation expense, specifically incorrect measurement dates for stock options.
- 3Estimated aggregate non-cash charges are less than $150 million, net of tax effects.
- 4The company does not expect the restatement to materially impact current fiscal year operating results, revenues, or cash position.
- 5Previously issued financial statements from January 31, 1999, onwards should not be relied upon.
- 6The Audit Committee's review found no integrity issues with current management.
- 7NVIDIA plans to file restated financial statements and its delinquent Q2 Fiscal 2007 report as soon as possible.