SiliconBeat

Coherent, the Santa Clara maker of lasers and precision optics, scaled back its expectations sales during its most recently completed quarter. It reduced its range by about 9 percent from $141 to $142.5 million down from $154 to $157 million, citing “delivery push-outs and lower orders from the microelectronics market” as the main reason for the lowered guidance.

The company also announced “another major component” of its “EBITDA initiative” — first time we’ve heard a company plan called something like that — which was the closing of its excimer laser site in Munich, which will be consolidated into the company’s other German facilities in Goettingen.

Coherent, one of the Silicon Valley companies that was forced to restate results to account for what it discovered were mis-priced stock options, said last week it would give its Chief Technology Officer Luis Spinelli $107,730 to help make him whole after the company repriced two options totaling 20,000 shares that were supposedly granted to him April 4, 2003. The shares were originally priced at $19.77, the closing price for Coherent shares that day. The adjusted stock price on the two options was raised to $24.90, a price that corresponds to the closing price for Coherent shares more than two months later in June 2003. Read the rest of this entry »

Nasdaq pulled the plug on Coherent’s stock listing Tuesday, refusing to reconsider its
decision to delist the company for its failure to be current in its financial filings with the
SEC. The company had been given a pass several times over the past year as its investigation into its option granting practices from January 1995 through September of 2006 prevented Coherent from promptly filing several financial reports required by the Securities and Exchange Commission.

The company filed one of its delinquent reports last week when it sent the SEC its 10-K annual report for fiscal 2006 where it gave details about results of the investigation by a special committee of its board into its stock option practices. Our blog item last week summarized the findings.

Coherent asked the SEC to stay Nasdaq’s decision to discontinue its listing, but it refused to do so. Starting Wednesday Coherent shares will be on the Pink Sheet Electronic Quotation Service.

The company had hoped to stave off its delisting by assuring regulators that it would file its missing quarterly reports no later than January 31, and its 2007 10-K “shortly thereafter.”

Coherent tried to reassure shareholders in its press release announcing the delisting Tuesday, saying it “intends to relist its common stock on a national exchange as soon as possible and expects it will be in a position to do so shortly after its annual meeting of stockholders scheduled for March 19, 2008.” That would be its first shareholder meeting in nearly two years.

By our count, this makes the third local company to have its stock delisted as a result of
late filings related to back-dating issues. Power Integrations of San Jose was delisted in
August 2006 and again in December 2006 for the same reason, but has since returned to the Nasdaq. Maxim Integrated was delisted in October and expects to reapply for re-listing sometime in the first quarter of 2008 when it says it should become up to date in its financial reporting.

Coherent finally filed its 10-K annual report for fiscal 2006 year on Tuesday, a day after
saying it had received (yet another) notice from Nasdaq that it was not in compliance with the market’s requirement for continued listing because of its failure to file its 2007 10-K on time .The failure could serve as an “additional basis for delisting of the Company’s securities.”

The last time the company filed a quarterly 10-Q report was in August 2006. In its press release announcing the 2006 10-K filing today, Coherent also said that it had been given until Dec. 17 to get current with its annual and three quarterly reports for fiscal 2007, which the company says its plans to file “no later than Jan. 31, 2008.” Otherwise, the Nasdaq has warned the company its shares will be delisted as of Dec. 19. Coherent is “exploring alternatives” to prevent that.

In November of last year, the company filed notice that its board had begun an “independent investigation” into its “historical stock option practices,” something the SEC was looking into as well.

In an 8-K filed in July Coherent said it had completed its “extensive investigation” of options granted between January 1, 1995 and September 30, 2006,
including “the review of over one million documents and over 30 interviews of current and former employees, directors and advisors.”

The verdict: “incorrect measurement dates for a significant number of stock option awards during the Relevant Period were used.”

However, the committee also found no “intentional wrongdoing” by any of its “current
directors, its Chief Executive Officer, John Ambroseo, or its Chief Financial Officer, Helene Simonet.”

The 2006 10-K report filed Tuesday contained the first official numbers regarding the costs related to its options mess: the number of shares involved in incorrectly priced option grants totaled 8.7 million, and the accountin charge for them, after subtracting a $4.7 million income tax benefit, was $20.2 million.

The company says that “Approximately 88% of these charges occurred prior to the end of fiscal 2002, with approximately 56% of the total charges occurring in fiscal 2001 and 2000.” However, two grants were incorrectly made during the period from June 7, 2006 through September 30, 2006 — months after the issue of backdating had became a front-page story.

And the costs of dealing with the matter keep mounting.

“We have incurred approximately $11.7 million in pretax costs for outside legal counsel fees (including special counsel), external audit firm fees, audit committee fees, and external consulting fees in fiscal 2007,” reads the 10-K, “and expect to incur significant additional fees related to the stock option matters and financial statement restatements until we are current with all filings.”