Diamond Foods Announces Proposed Agreement to Settle Private Securities Class
Company Provides Unaudited Preliminary Fourth Quarter and Full Year Fiscal
2013 Expectations for Net Sales, Gross Margin and Adjusted EBITDA
SAN FRANCISCO, Aug. 21, 2013 (GLOBE NEWSWIRE) -- Diamond Foods, Inc.
(Nasdaq:DMND) ("Diamond") today announced that it has reached a proposed
agreement, subject to Court approval, to settle the private securities class
action pending against the Company and two of its former officers.
Under the terms of the proposed settlement, Diamond would pay a total of $11
million in cash and issue 4.45 million shares of common stock to a Settlement
Fund to resolve all claims asserted on behalf of investors who purchased or
otherwise acquired Diamond stock between October 5, 2010 and February 8, 2012.
The proposed settlement further provides that Diamond denies all claims of
wrongdoing or liability.
A substantial portion of the $11 million in cash would be funded by Diamond's
insurers. With respect to the 4.45 million shares of common stock, Diamond
would have the ability to privately place, or conduct a public offering of,
the shares with the consent of the lead plaintiff and its counsel, prior to
distribution of the Settlement Fund.In that event, the Settlement Fund would
include the proceeds of the offering in lieu of the settlement shares.
If this proposed settlement is approved by the Court, a notice to the Class
members will be sent with information regarding the allocation and
distribution of the Settlement Fund and instructions on procedures to follow
to make a claim on the Settlement Fund.
"We believe this proposed settlement eliminates the burden of further time,
expense and risk related to the class action, allowing the Diamond team to
move forward fully focused on expanding the reach of our leading brands and
executing on our strategic and operational initiatives for growth," stated
Brian J. Driscoll, Diamond's Chief Executive Officer. "We continue to
strengthen our business and are pleased that our fourth quarter performance
enables us to complete fiscal year 2013 in an improved financial position."
The Company also announced unaudited preliminary fourth quarter and full year
fiscal 2013 expectations for net sales, gross margin and adjusted EBITDA as
Fourth Quarter Full Year
Net Sales $196 to $201 million $860 to $865 million
Gross Margin 25.5% to 27.0% 23.5% to 24.0%
Adjusted EBITDA $21 to $24 million $98 to $101 million
Note:Adjusted EBITDA, a non-GAAP financial measure, for the fourth quarter of
fiscal 2013 excludes the warrant liability loss, consulting fees, legal
expenses, and other costs.Adjusted EBITDA for full year fiscal 2013 also
excludes restatement related accounting and legal expenses, Fishers plant
closure and other costs.
The Company does not plan to provide preliminary financial information in the
future other than in unique circumstances, or in the event of a material event
that requires disclosure. The Company plans to release fourth quarter and full
year fiscal 2013 earnings in late September.
About Diamond Foods
Diamond Foods is an innovative packaged food company focused on building and
energizing brands including Kettle® Chips, Emerald® snack nuts, Pop Secret®
popcorn, and Diamond of California® nuts. Diamond's products are distributed
in a wide range of stores where snacks and culinary nuts are sold. For more
information visit our corporate web site: www.diamondfoods.com.
Note Regarding Forward-looking Statements
This press release includes forward-looking statements, including projections
as to net sales, gross margin, Adjusted EBITDA, benefits of settling
litigation, progress on strategic initiatives, Court approval of the
settlement of the securities class action litigation and the possibility of
offering the settlement securities to a private purchaser or the public. We
have based these forward-looking statements on our assumptions, expectations
and projections about future events only as of the date of this press release,
and we make such forward-looking statements pursuant to the "safe harbor"
provisions of the Private Securities Litigation Reform Act of 1995. Many of
our forward-looking statements include discussions of trends and anticipated
developments under the "Risk Factors" and "Management's Discussion and
Analysis of Financial Condition and Results of Operations" sections of the
periodic reports that we file with the SEC. We use the words "anticipate,"
"believe," "estimate," "expect," "intend," "plan," "seek," "may" and other
similar expressions to identify forward-looking statements. You also should
carefully consider other cautionary statements elsewhere in the reports and in
other documents we file from time to time with the SEC. We do not undertake
any obligation to update forward-looking statements to reflect events or
circumstances occurring after the date of this report. Actual results may
differ materially from what we currently expect because of many risks and
uncertainties, including: the failure to obtain preliminary or final Court
approval of the proposed settlement or delay in obtaining such approval; risks
related to decisions by stockholders to opt out of or object to the proposed
settlement; the dilutive impact of the issuance of the proposed settlement
shares on our stock price; the potential impact on our stock price of sales of
the proposed settlement shares into the public market; risks relating to our
leverage and its effect on our ability to respond to changes in our business,
markets and industry; increase in the cost of our debt; failure to comply with
debt covenants; inability to raise additional capital and the possible
dilutive impact of raising such capital; risks relating to litigation and
regulatory proceedings; uncertainties relating to relations with growers;
availability and cost of walnuts and other raw materials; increasing
competition and possible loss of key customers; and general economic and
capital markets conditions.
Press spacebar to pause and continue. Press esc to stop.