Quiksilver Inc. has postponed its March 5 first-quarter earnings release as the audit committee of its board investigates what it called a “revenue cut-off issue.”
The company said the audit committee began an investigation last week but had not reached any conclusions. The committee will report back to the board at its regularly scheduled meeting on March 16 and the Huntington Beach, Calif.-based firm expects to disclose a March date for the rescheduled first-quarter report following the meeting.
Shares fell 8.8 percent to $1.82 in morning trading Wednesday following disclosure of the investigation.
Quiksilver said it doesn’t expect the completion of the investigation to have a material impact on previously issued financial statements, first-quarter results or current guidance.
Quiksilver has struggled in recent years, selling off numerous assets, such as its Tony Hawk brand, to focus on its core Quiksilver, Roxy and DC brands. Its losses in 2014, including $178.2 million in pretax goodwill impairment, hit $309.4 million as revenues fell 13.3 percent to $1.57 billion.
Bob McKnight, the firm’s cofounder, retired as chairman in October, with that post being added to chief executive officer Andy Mooney’s title.
Quiksilver didn’t provide specifics about the specific nature of the investigation, which would appear to center on results for the first quarter ended Jan. 31.
The “revenue cut-off” question figured prominently in the 1999 bankruptcy of Sirena Apparel Group Inc. when it was found that executives of the firm held the books open long enough to add revenue to given periods in order to meet financial forecasts. Both Maurice Newman, ceo, and Richard Gerhardt, chief financial officer, were terminated for the 1999 actions and later pled guilty to securities fraud charges.