OCZ Technology Says SEC to Probe Customer-Incentive Program
Stock Chart for OCZ Technology Group Inc (OCZ)
OCZ Technology Group Inc. (OCZ), a maker of disk drives based on memory chips, said the U.S. Securities and Exchange Commission is investigating a customer-incentive program that forced the company to put off reporting quarterly results.
The regulatory agency has requested documents and information concerning the program and press releases dated Sept. 5 and Oct. 10, among other matters, the San Jose, California-based company said today in a filing. OCZ said it intends to cooperate with the investigation and will not comment further.
In October, the company postponed its fiscal second-quarter earnings filing, saying revenue for the period will be “materially lower” than previously thought. The postponement was prompted by customer-incentive programs discovered after a September preliminary announcement of earnings for the period.
Ralph Schmitt, who replaced Ryan Petersen as chief executive officer on Oct. 10, said on a conference call then that the company had been trying to increase market share “at all costs.”
Revenue for the quarter ended Aug. 31 will be less than the $110 million to $120 million forecast on Sept. 5, OCZ said in the Oct. 10 statement. The company said it expects negative gross profit margins and a significant net loss for the quarter.
OCZ fell 9.2 percent to $1.08 in extended trading at 6:37 p.m. New York time, after the company’s filing. The shares were unchanged at $1.19 at the New York close and have fallen 82 percent this year.
Bonnie Mott, an OCZ spokeswoman, didn’t immediately return a call seeking comment on the investigation.
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