Nyfix (Pink Sheets: NYFX; "NYFIX" or the "Company"), a trusted provider of innovative solutions that optimize trading efficiency, today announced it has completed its previously announced internal review of its historical stock-based compensation awards, as well as its overall accounting review.
The review was conducted by management, under the oversight of the Audit Committee and a special Subcommittee of the Audit Committee formed in connection with a restructuring of the Board of Directors (the "Board") and management that commenced in September 2005. The Company's consolidated financial statements for the years ended December 31, 2004 and 2003 have also been re-audited by its independent public accounting firm engaged in November 2005.
As a result of management's findings in connection with the internal reviews, NYFIX will restate consolidated financial statements for fiscal years 1993 through 2004 and the first quarter of 2005 (the "2005 Restatement"). Details of the items which will be restated in the 2005 Form 10-K are as follows:
- Stock-based compensation (1993 - 2004): -$38,446
- Acquisitions and investments (2002 - 2004): -5,465
- Revenue recognition (2001 - 2004): -3,013
- Income taxes (1999 - 2004): 4,832
- Total: -$42,092
When combined with the $16.7 million of stock-based compensation restatement adjustments recorded in the 2004 Form 10-K, the total amount of stock-based compensation recorded through 2004 is $55.1 million.
The extensive internal review of historical stock-based compensation awards included interviews with current and former employees and current and former Board members, as well as the creation of a new stock-compensation grant database. The review also encompassed a search through more than seven million documents. The review included an examination of every stock option grant from 1991 (inception) through 2005, or approximately 1,500 awards of options covering 12.7 million shares granted to approximately 450 grantees, as well as an examination of certain warrants covering two million shares issued to directors, officers and employees. The internal review was performed with the assistance of over sixty contract lawyers and accountants.
The internal review of historical stock-based compensation awards also led to the previously announced increase in the exercise prices or the voiding of certain grants to certain directors and officers by the Board in June 2006.
NYFIX intends to file its 2005 Form 10-K with the SEC within weeks from the date of this release.
NYFIX intends to hold an investor conference call soon after filing its 2005 Form 10-K.