Regulation

Krispy Kreme Delays Filing Again

The donut maker, which is assessing its internal controls for this year, must put off its quarterly report for the period ending July 30.
Stephen TaubSeptember 12, 2006

With Krispy Kreme’s luster on the wane, customers may no longer have to wait on long lines to buy a donut at one of its stores. But shareholders will have to wait a little longer to view the embattled company’s recent financial reports.

The company announced in a regulatory filing on Tuesday that it would delay until “the earliest practible date” the filing of its quarterly report for the period ended July 30, which is its second quarter of fiscal 2007.

The donut maker cited the “substantial resources” devoted to completing its fiscal 2005 annual report, which was filed on April 28, and to filing its annual report for fiscal 2006 and its quarterly reports for the first three quarters of fiscal 2006. Until those reports are complete, the company warned, it will be unable to finalize its quarterly report for the second quarter of fiscal 2007.

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In its 2005 10-K, Krispy Kreme’s had reported some material weaknesses in its internal accounting control over financial reporting. The company noted that it’s in the process of completing an assessment of internal controls for fiscal 2006.

While that assessment isn’t complete, management believes it’s likely that it will conclude that its internal controls weren’t effective as of January 29 because of the existence of material controls weaknesses over financial reporting at that date.

The company also announced the hiring of Charles Blixt, an attorney with more than 25 years of experience in corporate law, as interim general counsel

Embroiled in an accounting scandal and shrinking in size, the donut maker is currently being investigated by the Securities and Exchange Commission and the U.S. Attorney’s Office for the Southern District of New York.

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