Vitesse Semi Can't Find Good Graces

SAN FRANCISCO -- Vitesse Semiconductor's ( VTSS) exile in financial purgatory continues.

The trouble chipmaker once again delayed the completion date of its financial restatements Friday, and cancelled a planned earnings release slated to occur by the end of June, marking the latest twist in one of Wall Street's longest-running and most curious backdating sagas.

The Camarillo, Calif., company said that it will require additional time to complete the audit of its financial statements for fiscal 2006 and 2007. Vitesse Semi had previously promised to file the restatements by the end of June, after having pushed the date back from an earlier target of March.

The auditing and restatements of Vitesse's previous financial results has taken longer than expected, the company said in a statement Friday, noting that the delay is not due to any newly discovered issues of fraud or accounting irregularities.

The new plan is to file the documents with the Securities and Exchange Commission in the quarter ending September 30.

Shares of Vitesse were off one penny to 68 cents Friday.

Vitesse Semi, whose name is ironically derived from the French word for "speed," has been seeking to gets its financial act in order for more than two years, and has been trading on the Pink Sheets since June 2006 after its failure to file timely earnings reports put it in violation of the Nasdaq's listing requirements.

Many of the other chipmakers embroiled in the backdating scandal, including Marvell Technology ( MRVL), KLA-Tencor ( KLAC) and Nvidia ( NVDA), have by now mended and accounted for their past financial shenanigans (at least in so far as reporting requirements with the Nasdaq is concerned).

Vitesse has said its review of its books turned up not only backdating, but various other accounting irregularities such as false sales invoices, complicating the job and requiring Vitesse to painstakingly "reconstruct" its past revenue with customers. A disagreement with its first auditor KPMG, which Vitesse fired from the job in 2006, has not helped.

Meanwhile, Vitesse's stock continues to languish in sub-$1 territory, having slid roughly 60% in the past two years.

Last month, during a "state of the company" conference call that Vitesse held in lieu of a quarterly earnings report, one participant summed up the Street's attitude, by suggesting that CEO Christopher Gardner consider resigning.

"I think I speak for a large percentage of the owners of Vitesse in saying that you get an A plus grade for politicking, and fooling all of us, but an F for increasing shareholder value," said Piney Reach analyst Robert Jordan. "Good luck to all of us for leaving the Company in your hands a day longer than necessary."

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