Financially strapped Krispy Kreme Doughnuts Inc. told federal regulators Monday that its 2005 annual report has been delayed because of an ongoing review of its accounting practices.
The Winston-Salem-based firm said in a filing with the Securities and Exchange Commission that the analysis included accounting practices from 2004 and “earlier years as well as in fiscal 2005.”
Krispy Kreme said further revisions to past earnings reports might be required. Last fall, the company formed a special committee of independent directors to examine whether earnings should be restated.
Shares of Krispy Kreme fell 42 cents, or 5.6 percent, to close at $7.14 Monday on the New York Stock Exchange.
The company told the SEC it was unable to meet deadline last Friday to file the annual report, and it does not expect to be able to file it before April 30.
“The company is not at this time able to predict when the Form 10K will be filed, but intends to file the report at the earliest practicable date,” the company said.
In the SEC filing, Krispy Kreme said the failure to file its quarterly report in a timely manner “may constitute failure to comply with the continued listing requirements of the New York Stock Exchange.”
Qwest protests planned SBC-AT&T merger
Qwest Communications has filed the first of an expected series of protests against the SBC Communications-AT&T merger, telling California regulators the combined company would hurt consumers and businesses.
In a document made public Monday, Qwest also asked the California Public Utilities Commission to examine the SBC-AT&T merger along with a proposed union of MCI Inc. and Verizon Communications Inc.
“It is difficult to see how these two transactions could ever be found to be in the public interest,” said Qwest, which has been spurned in its multiple efforts to buy MCI.
Denver-based Qwest Communications International Inc. plans to file additional protests as other states begin considering the mergers.
SBC spokesman Dave Pacholczyk said Qwest “seems to be of two minds. They want to merge with MCI, but they don’t want us to merge with AT&T. We’re mystified by the contradiction,” he said.
Lead attorneys chosen for Vioxx suit
Trenton, N.J. A federal judge on Monday chose the lead lawyers for pension funds suing Merck & Co. Inc. for alleged investment losses related to the drugmaker’s former blockbuster arthritis drug Vioxx.
U.S. District Judge Stanley R. Chesler named four law firms as co-lead counsel for pension funds that owned Merck shares before the company disclosed an internal study linking Vioxx to increased risk of heart attack and stroke.
Whitehouse Station-based Merck pulled Vioxx, whose $2.5 billion in annual sales equaled 11 percent of Merck revenues, from the market on Sept. 30. Merck shares, trading at $60 as recently as June 2003, plunged $12 to $33 that day, wiping out $28 billion of stock value for individual investors, pension funds and mutual funds.
Nine law firms originally had been vying for the potentially lucrative position of lead counsel for the pension lawsuits. Seven of those had agreed to a lead counsel committee comprised of four of the firms and headed by Robert Izard of Schatz & Nobel PC of Hartford, Conn.
Izard told Chesler the four firms had extensive experience in such litigation. Some lawyers had argued those four firms were already spread too thin, but Chesler agreed to the four-firm committee — after lecturing the 27 lawyers in his courtroom.