Shares in Kettle Chips owner Diamond Foods tumbled yesterday (15 November) after the US company posted lower earnings for 2010 and 2011 in restated accounts - and booked a loss for the first three quarters of its current financial year.
Diamond Foods, which had to refile its financial results for the last two years after an accounting scandal at the business, said the restatement meant its profits were US$56.5m lower in total.
Earlier this year, Diamond found it had incorrectly accounted for payments to walnut growers, which led to the departure of its CEO and CFO.
It also reported a net loss for the first three quarters to 30 April of $53.4m amid lower walnut supplies, the rising cost of the ingredient and expenses from its investigation into how growers were paid for walnuts.
Diamond Foods also booked $40.5m in costs from the end of its plans to buy Pringles in the wake of the scandal. Kellogg has since acquired Pringles.
"Clearly, the results for the first three quarters of 2012 demonstrate that Diamond faced challenges. However, we have a strong brand portfolio to build upon and have launched a new strategic direction with a focus on investing in innovation and brand building, significantly improving our cost structure and rebuilding our walnut supply," Diamond's current CEO Brian Driscoll said. Net sales for the three quarters were up 3.5% to $757.4m.
The filing of the results for the three quarters to 30 April follows a series of warnings from Nasdaq over the delays to publishing the accounts. "The company regrets the extended time investors had to wait for financial reports during the restatement process. The company has emerged from this process with strengthened financial discipline and rigorous commitment to enhancing internal controls and remediating material weaknesses," Driscoll said. "Today Diamond made an important first step in becoming current with our financial reporting and we look forward to completing our other required filings."
Diamond shares were down 21.23% at $15.36.