Accounting & Tax

Krispy Kreme Finally Fills in the Holes

Doughnut maker restates results, amends credit facilities.
Stephen TaubMay 1, 2006

On Friday evening, Krispy Kreme Doughnuts Inc. restated its financials for fiscal 2003 and 2004, as well as for all quarters of fiscal 2004 and the first three quarters of fiscal 2005. The troubled doughnut maker also filed its annual report for the fiscal year ended January 30, 2005.

Had it not filed its 2005 financials by April 30, the company faced possible delisting from the New York Stock Exchange, according to the Associated Press. Krispy Kreme officials also said the company’s senior secured credit facilities were amended, which extended the deadline to submit its fiscal 2006 audited financial statements to July 31.

The restatements, excluding impairment charges, decreased the company’s pre-tax income by a total of $34 million through the third quarter of fiscal 2005. This compares with the company’s previous estimate of $35 million.

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The company also recorded a restatement adjustment of $132 million in the third quarter of fiscal 2005 related to impairment of intangibles. While the restatement adjustments are substantial, they have no impact on the company’s current operations or liquidity position, added officials.

Krispy Kreme’s stock rose nearly 3 percent on Monday following the Friday restatement.