Diamond Foods expects to receive a delisting letter from Nasdaq for failing to meet today’s deadline for filing financial reports, the company has said.
The company’s problem meeting the deadline stems from improper accounting, which was revealed in Diamond’s walnut business last year. After a three-month investigation, an audit committee found that $80m of payments to growers were unaccounted for, leading the company to remove its CEO Michael Mendes and CFO Steven Neil.
The maker of Kettle Chips and Emerald Nuts had previously said it would file its quarterly reports for the quarters ended October 31, January 31 and April 30 by June 11, but missing the deadline means it will face delisting. The company says it will request a hearing to appeal against any such move. Diamond said it also intends to ask for an extension for its annual stockholders meeting, which it does not expect to convene before July 31, as required under Nasdaq’s listing rules.
"Diamond and its auditors have devoted significant resources and are working diligently to complete the restatement for fiscal years 2011 and 2010 and file our delayed fiscal year 2012 quarterly reports as soon as possible," said Mike Murphy, the company’s interim chief financial officer. "We look forward to discussing the progress we have made with Nasdaq and to getting Diamond current in its filings soon."
Diamond’s accounting scandal was also cited as a reason for the collapse of its $2.35bn bid for Pringles, which was snapped up by The Kellogg Company instead.
The company has been seeking to get its finances in order since the accounting problem was revealed in February, and last month it secured $225m of funding from investment firm Oaktree Capital Management. The deal could see Oaktree take a 16.4% share of the company.