Sycamore to Restate

The networker fixes its accounting on options.
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Sycamore

(SCMRE)

said it would restate its financials for the last five years to correct an error in how it accounted for stock option costs.

The company said the restatement would have the effect of adding $34 million to its costs over five years, with most of the hit coming in 2001.

"The investigation identified certain stock options granted during calendar years 1999 to 2001 that were incorrectly accounted for under generally accepted accounting principles," the Chelmsford, Mass., networking company said. "As a result, the board of directors, upon the recommendation of Sycamore's management, determined that the company's financial statements should be restated for fiscal years 2000 through 2004 to reflect the additional non-cash stock compensation expense amortized over the vesting period of the identified options."

Sycamore said the changes would turn its reported $668,000 profit for 2000 to a $746,000 loss. The restatements will widen 2001's loss by $30 million to a total of $310 million, and widen losses in 2002 and 2003 by $1.6 million and $825,000, respectively. The adjustments will narrow the 2004 loss by $70,000 and widen the loss for the six months ended Jan. 29, 2005, by $142,000.

Sycamore was notified by the

Nasdaq

in June that its trading status is in jeopardy because the company missed the filing deadline for the quarter ended April 30. Sycamore's ticker changed to SCMRE from SCMR to reflect its out-of-compliance status.

Sycamore's filing delays were due to the internal audit looking into accounting for stock options given between 1999 and 2001.

The collapse of the Internet building boom at the turn of the century has all but snuffed out demand for the type of new-generation optical-networking gear make by outfits like Sycamore.

On Friday, Sycamore was flat at $3.65.