Fossil announces report on financial statement restatements
08 May '07
2 min read
Fossil Inc announced that a committee made up of independent outside directors of the Board of Directors of the Company presented its final report on the voluntary review of the Company's historical equity granting practices to the Board of Directors on May 4, 2007.
The Company also announced that its Board of Directors has adopted all the recommendations of the Special Committee and that, in light of the findings, the cumulative impact for all prior periods require that the Company's consolidated financial statements for fiscal years 2004 and 2005 (together with the related reports from the independent registered public accounting firm), for all fiscal quarters of 2005 and for the first and second fiscal quarters of 2006 should no longer be relied upon.
While the Company is still evaluating the effect of the findings, the Company estimates a cumulative pre-tax financial impact of recording additional compensation expense associated with equity grants from 1993 to 2006 of up to approximately $16 million.
The Special Committee's comprehensive investigation was undertaken with assistance from independent legal counsel, Weil, Gotshal & Manges LLP, and forensic accounting assistance from FTI Consulting, Inc. During the course of its investigation, the Special Committee reviewed the Company's historical equity granting practices, analyzed all stock option grant dates covering the period from the Company's initial public offering in 1993 to December 31, 2006, conducted detailed reviews of stock options representing approximately 83% of the total option shares granted by the Company during such period, collected and reviewed over one million documents and interviewed 58 former and current employees, directors and outside advisors.
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