Parlux delays end-of-year financial report
buy-out, Parlux has said that it will delay filing its end-of-year
financial report because it needs more time to access its internal
control policies.
The company, which has built its success of the back of sponsored fragrance brands that include high profile media names such as Paris Hilton and Andy Roddick, said that it would file its 10-K for the fiscal year ending March 31 when it completes assessments, including company auditor reviews.
After testing by management, the company said that it has material weaknesses in areas such as access to certain computer master files, segregation of duties and the processing of certain of its accounts.
The company claims that this has been brought about by a huge increase in its turnover and business operations, which its administration staff have not been able to keep up with.
However, the company said that as its testing did not disclose any improprieties, it is not expected to affect its expected full year results of $182m in net earnings and net earnings per share of $2.13.
Last year sales grew 20 per cent to reach $100.4m, suggesting the company's savvy marketing strategy and sponsorship deal has put it on a road to even greater success this year.
But the latest move by Parlux executives to buy back shares could meet with problems following a complaint from public shareholder Glen Hutton.
In his complaint to the to Broward Country circuit court in Florida, also home to Parlux's Fort Lauderdale headquarters, Hutton names CEO Ilia Lekach and other directors for purportedly acting 'derivatively' over the dealings.
Lekach has made an unsolicited offer to buy back the company shares at $29 in a bid to take the company private and fend of the threat of short-term investors Currently shares are trading at. Currently shares are trading on NASDAQ at $10.
But in his class action Hutton is claiming that the move is an inadequate and unfair consideration that has been made without full disclosure of all information, which is ultimately to the detriment of public shareholders.
