Message #49 From:
Stock News Bot Date: October 20, 2006 04:00:00 AM
IBAS News iBasis Will Restate Its Financial Statements to Account for Additional Non-Cash Stock-Based Compensation
BURLINGTON, Mass.--(BUSINESS WIRE)--iBasis (NASDAQ: IBAS), the global VoIP company, today announced that on
October 17, 2006 the Board of Directors adopted the recommendations of a
special independent committee of the Board of Directors (the Special
Committee). The Company will restate its previously issued financial
statements in order to correct errors relating to its accounting for
non-cash stock-based compensation. The Company does not expect that the
anticipated restatement will have any impact on its previously reported
revenue.
The Special Committee has concluded that the appropriate measurement
dates for determining the accounting treatment of certain stock option
grants differ from the measurement dates used by the Company in
preparing its financial statements. As a result, the Company currently
expects to record additional non-cash charges in the range of $10
million to $20 million for stock-based compensation over the period from
December 1999 through April 2006. The Company has not yet completed its
review of the amount to be recorded in any specific period, nor has the
Company determined the tax consequences and any related liabilities that
may result from these matters. The amounts to be recorded are subject to
review and audit by the Company’s independent
registered public accounting firm.
On October 18, 2006, the Audit Committee, in consultation with
management and after discussion with the Company’s
independent registered public accounting firm, concluded that the Company’s
financial statements, including the reports of the Company’s
independent registered public accounting firm thereon, and its earnings
releases and similar communications for fiscal 1999 and subsequent
periods should no longer be relied upon.
The Company expects to announce its financial results for the third
quarter of fiscal 2006 after a final determination of the appropriate
stock-based compensation expense for the periods affected has been made.
The Company has not yet determined whether it will be able to file its
related quarterly report on Form 10-Q in a timely manner. The Company
will file its restated financial statements as soon as possible.
The Company also announced that, subsequent to the Company’s
announcement on September 11, 2006 of the Special Committee review, it
received a letter of informal inquiry from the United States Securities
and Exchange Commission (SEC) relating to the Company’s
historical stock option grants. The Company intends to cooperate fully
with the SEC in this matter.
In accordance with the determinations of the Special Committee, the
Company has terminated the employment of Jonathan D. Draluck, the Company’s
Vice President, Business Affairs and General Counsel.
About iBasis
Founded in 1996, iBasis (NASDAQ: IBAS) is a leading wholesale carrier of
international long distance telephone calls and a provider of retail
prepaid calling services, including the Pingo®
web-based offering (www.pingo.com)
and disposable calling cards that are sold through major distributors
and available at retail stores throughout the U.S. iBasis customers
include many of the largest telecommunications carriers, including AT&T,
Verizon, China Mobile, China Unicom, IDT, Qwest, Skype, Telecom Italia,
and Telefonica. iBasis carried 7.8 billion minutes of international
voice over IP (VoIP) traffic in 2005, and is one of the largest carriers
of international voice traffic in the world1.
For four consecutive years service providers have named iBasis the best
international wholesale carrier in ATLANTIC-ACM’s
annual International Wholesale Carrier Report Card2.
The Company can be reached at its worldwide headquarters in Burlington,
Massachusetts, USA at 781-505-7500 or on the Internet at www.ibasis.com.
Safe Harbor Statement
Except for historical information, all of the expectations, plans and
assumptions contained in the foregoing press release, including
statements regarding the Company’s review of
its stock option grant practices and related accounting as well as the
Company’s expected restatement of certain of
its historical financial statements, constitute forward-looking
statements under Section 21E of the Securities Exchange Act of 1934 and
involve risks and uncertainties. Important factors that could cause
actual results to differ materially from such forward-looking statements
include, but are not limited to the following: the possibility that the
review of the Company’s stock option grant
practices may expand in scope and/or result in additional charges;
unanticipated consequences of any restatement; the risk that the
anticipated accounting adjustments and other factors described above
could have negative tax or other implications for the Company, including
additional tax liabilities; the risk that the Company’s
internal control over financial reporting and disclosure controls and
procedures are not, and have not been, effective; the risk that the
Company will be unable to comply with its SEC filing obligations in a
timely manner; the risk that the Nasdaq Global Market will delist the
Company’s common stock; the risk that the
Company will face additional claims and proceedings in connection with
its stock option grant practices, including additional shareholder
litigation and more formal proceedings by the SEC or other governmental
agencies; and the financial impact of the foregoing, including
potentially significant litigation defense costs and claims for
indemnification and advancement of expenses by directors, officers and
others. The Company undertakes no obligation to update information
contained in this release. For further information regarding risks and
uncertainties associated with the Company’s
business, please refer to the Company’s
filings with the SEC.
iBasis and Pingo are registered marks; the global VoIP company and The
iBasis Network are trademarks of iBasis, Inc. All other trademarks are
the property of their respective owners.
1 Telegeography 2006 data compared with iBasis
2005 traffic volume.
