MANHASSET, N.Y. Fabless semiconductor supplier Vimicro International Corp. said Monday it expects to record approximately $3.6 million in unanticipated costs and expenses for its second quarter, reducing its earnings by 9 cents per share.
Vimicro (Beijing, China) said in April 2006, the company's auditors received two anonymous letters purportedly written by certain undisclosed shareholders alleging the company's founders took part of stock options grants at its U.S. subsidiary five to six years ago. A subsequent independent audit committee reviewing the matter did not find evidence to substantiate the allegations in the anonymous letters, other than a single transaction in 2001 that was reversed a year later.
The expenses incurred by the investigation will lower the company's second-quarter earnings by 5 cents per share. In addition, Vimicro expects earnings to be reduced an additional 3 cents per share due to an inventory charge resulting from customers cancelling orders and delaying other orders on mobile ring-tone products.
Second-quarter earnings will be reduced by an additional cent per share due to $0.5 million in expenses related to a proposed secondary offering, Vmicro said.