Equinix Takes Charge on Options Issue
August 14th, 2006 By: Rich Miller
Equinix will take a $445,000 non-cash charge against its earnings to account for inconsistencies in in the dating of option grants, but said there had been no fraud involved in the handling of the options. “The Audit Committee concluded that the Company did not engage in intentional or fraudulent misconduct in the granting of stock options,” Equinix said in a statement accompanying its second quarter earnings, which had been delayed while the accounting issue was resolved. The audit found that the accounting dates of some past stock option grants differed from their actual grant dates.
“We continue to experience strong momentum across all areas of our business,” said Peter Van Camp, chairman and CEO, Equinix. “We are pleased the Audit Committee has completed the investigation and found no intentional misconduct in our prior stock option grant practices. We intend to continue to cooperate with the ongoing inquiries from the SEC and DOJ.”
The company had a net loss for the second quarter, including stock-based compensation expense of $8.9 million, was $5.3 million (19 cents per share). Without $8.9 million in stock-based compensation, Equinix would have had net income of $3.6 million. Revenues were $68.5 million for the second quarter, a 6% increase over the previous quarter and a 31% increase over the same quarter last year. Recurring revenues, consisting primarily of colocation, interconnection and managed services, were $65.1 million, a 5% increase over the previous quarter and a 32% increase over the same quarter last year.