Diamond Foods: Our 2012 losses do not reflect our recent change in strategic direction
Chief executive Brian Driscoll blamed the losses on costs related to the high-profile audit committee investigation into its walnut accounting issues coupled with a $10.4m charge related to a change in the fair value of investor Oaktree Capital Management’s warrant liability, plus a $10.1m charge related to asset impairment at a plant in Indiana.
But he added: "The 2012 financial results do not reflect our recent change in strategic direction with a focus on sustainable growth of our brands based on innovation and differentiation, improving our cost structure and rebuilding our walnut supply.
“Diamond is moving aggressively to execute against our objectives as we seek to better position the company for long-term success."
Last year, Diamond - which is best known for Emerald Nuts, Kettle Chips and Pop Secret popcorn - saw its shares plummet after improper accounting was exposed in its walnut business. After a three-month investigation, an audit committee found that $80m of payments to growers were unaccounted for, prompting the company to remove its CEO Michael Mendes and CFO Steven Neil.
The accounting scandal was also cited as a reason for the collapse of its $2.35bn bid for Pringles, which was snapped up by Kellogg instead.
However, former Hostess Brands boss Driscoll, who joined Diamond in May, told investors and analysts last month that he was confident that a new strategy for Kettle Chips and Emerald Nuts would boost these brands' fortunes.
Meanwhile, Pop Secret popcorn continued to put in a strong performance, he said.
We believe that the absolute worst is over for Diamond
In a recent note on Diamond Foods published on the Seeking Alpha investment site, analysts at Saibus Research, an independent research firm based in Boston, said: "While it has seen better days, we believe that the absolute worst is over for Diamond"
But they added: "Diamond's brand name and image has been severely damaged due to the chicanery of its previous management.
"It will take a long time for the company to restore the shine and luster that it previously enjoyed with consumers and investors."
Diamond posted a net loss of $32.9m in the fourth quarter (three months to July 31), compared with a net profit of $2.8m a year earlier. Q4 net sales were down 5% to $224m.
Click here for more on Diamond's plans for Emerald Nuts and Kettle Chips.