Brocade ( BRCD) will restate financial statements for fiscal 2002 and 2003 to correct errors in the way it recorded stock-based compensation, the storage networking company said. The announcement, which came after the bell Thursday, sent shares skidding 37 cents, or 5.4%, to $6.55, in postclose trading. The company does not currently anticipate any material adjustments to its historical revenue, non-stock-option-related operating expenses or cash positions. The errors were found during an ongoing internal review. Adjustments to results for fiscal years prior to 2002 will be made as necessary, the company said. Companies are not yet required to expense options, but at the very least they must account for those expenses in footnotes to proxy statements, as Brocade does. In December, the Financial Accounting Standards
announced that companies must treat options as an expense as of June, though it is possible that either Congress or the Securities and Exchange Commission will heed pleas from opponents to modify or even kill the ruling. Shares of Brocade closed the regular session down 8 cents, or 1.1%, to $6.92.