YOU ARE HERE: LAT HomeCollections

Krispy Kreme Filing Delayed

September 14, 2004|From Associated Press

Shares of Krispy Kreme Doughnuts Inc. fell Monday after the company said an independent auditor refused to sign off on its second-quarter financial statement until an outside law firm hired by the company's board performed additional work.

Winston-Salem, N.C.-based Krispy Kreme said in a filing Friday with the Securities and Exchange Commission that the auditor, which it did not name, would not complete its review without the additional information. The company's auditor is PricewaterhouseCoopers.

The Krispy Kreme filing did not discuss the auditor's request, saying only that it concerned "a specific matter relating to an acquisition in fiscal 2004."

Krispy Kreme told the SEC the dollar amount involved in the probe was "immaterial from a quantitative standpoint."

Krispy Kreme spokeswoman Amy Hughes said she had no additional comment.

Shares of Krispy Kreme fell 42 cents, or 3.5%, to $11.56 on Monday on the New York Stock Exchange.

Krispy Kreme said a law firm hired by the company's board had reviewed the matter now under scrutiny and concluded after a review of electronic files that neither the company nor its employees intentionally engaged in any misconduct.

"Although the company and its audit committee believe that the procedures performed to date are sufficient to conclude the matter, the audit committee has authorized the independent law firm to perform the additional procedures, primarily related to a further review of certain electronic files," the company said.

Krispy Kreme's stock, which traded above $40 less than a year ago, has been under heavy pressure this year after a first-quarter loss and subpar earnings in the second quarter.

Executives recently confirmed that Krispy Kreme was the subject of an "informal, nonpublic inquiry" by the SEC on its franchise re-acquisitions and its earnings forecasts.

Some shareholders have filed lawsuits alleging they were misled by the company.

Los Angeles Times Articles