When Green Mountain Coffee disclosed that it had received an inquiry from the SEC related to likely revenue recognition issues with a vendor, and that it had overstated its earnings, this got lost in the translation: The disclosure was made on September 28.
The company’s fiscal year ended September 26.
The upshot: That was Green Mountain’s audited quarter, and the announcement came out two days after the quarter’s close. That means its auditor, PriceWaterhouse, has no choice but to turn over every stone possible to figure out what’s really going on, if anything. If not, and if further problems are found, PriceWaterhouse could find itself with a lot of ‘splainin’ to do.
Green Mountain told me that Italy coffee maker Lavazza, which agreed to buy 7% of the company on August 10, still intends to go through with the deal. (Even before the audit is completed?)