"After an extensive and thorough investigation, the Audit Committee concluded that the Company's internal controls were inadequate and that certain grower payments for the 2011 and 2010 crops were not accounted for in the correct periods. As a result, the Company will restate its fiscal years 2010 and 2011 financial statements," said Robert Zollars, Diamond Foods' Chairman. "The Board takes the Company's control and the integrity of its financial statements very seriously, and we are moving aggressively to implement corrective measures, including changes to the Company's leadership."
"I look forward to working with the management team and the terrific employees at Diamond and will be focused on moving the business forward, further driving Diamond's strong brands and helping to find a permanent chief executive," said Rick Wolford, Acting President and Chief Executive Officer.
Diamond is working diligently to complete financial restatements for the affected periods and will file all required reports with the U.S. Securities and Exchange Commission as soon as possible. While the timing of the restatement is difficult to predict at this time, the Company will endeavor to provide updates on timing and other material developments.
Rick Wolford previously served as Chief Executive Officer, President and Chairman of Del Monte Foods. Mr. Wolford began his career in 1967 in the food industry at Dole Foods, where he held a variety of positions, including President of Dole Packaged Foods. He has served as a Director of Diamond Foods since April 2011.
Diamond Foods Announces Audit Committee Investigation Findings: Diamond Foods, Inc. (Nasdaq:DMND) today announced that the Audit Committee of its Board of Directors has substantially completed its investigation of the Company's accounting for certain crop payments to walnut growers. The Audit Committee has concluded that the Company's financial statements for the fiscal years 2010 and 2011 will need to be restated. Over the course of the last three months, the Audit Committee has carefully reviewed the accounting treatment of certain payments to walnut growers. The Audit Committee has concluded that a "continuity" payment made to growers in August 2010 of approximately $20 million and a "momentum" payment made to growers in September 2011 of approximately $60 million were not accounted for in the correct periods, and the Audit Committee identified material weaknesses in the Company's internal control over financial reporting.
I tend to agree with you that where there is smoke , there may be a raging fire nearby.
Hope not , but it seems clear that Mendes was laser-focused on revenue growth , no matter what it'd take to represent the financials as solid , including fraud or cooking the books. He had to keep P&G interested , and could not allow a cloudy picture to emerge.
The question does remain, are the momentum pymts improperly accounted for the ONLY thing Mendes and Neil dealt from underneath the deck? I think they're both as dishonest as the day is long and eventual will scramble to save their hides. Perhaps, Bubba await their arrival.....