BOULDER – A second class-action lawsuit has been filed against Boulder Brands Inc. (Nasdaq: BDBD) alleging that the company made false and misleading statements and failed to disclose various adverse details related to the company’s financial health and outlook.
The Shuman Law Firm in Boulder and Los Angeles-based Glancy Prongay & Murray LLP filed the suit this week in U.S. District Court in Denver on behalf of New York-based Insider Asset Management LLC. As was the case with a similar suit filed in Denver last month, the company of Boulder Brands, chief executive Stephen Hughes, chief operating officer James Leighton and chief financial officer Christine Sacco were all named as defendents.
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The plaintiffs are seeking unspecified monetary damages.
A spokesperson for Boulder Brands could not be reached Wednesday but had declined comment in April on the first suit. Boulder attorney Kip Shuman, whose firm is representing the plaintiffs in both suits, declined comment on Wednesday when reached by phone. An attorney from Glancy Prongay & Murray could not be reached.
Boulder Brands Evol, Udi’s Gluten Free, Earth Balance and Smart Balance, among others.
Like the first suit, the latest one seeks to represent people who bought Boulder Brands common stock between Dec. 23, 2013 and Oct. 22, 2014. That’s when both suits claim that misleading statements were made that overstated the financial well-being of Boulder Brands in violation of the Securities and Exchange Act of 1934.
Specifically, the most recent suit claims that the company failed to disclose that it was experiencing integration issues related to the acquisition of the Evol and Udi’s brands; that the company’s Smart Balance product segment was under-performing; and that gross margins would be lower than expected as a result of various issues.
Boulder Brands issued a press release on Oct. 22, 2014 to update anticipated third-quarter results and outlook for 2014. Included in that day’s announcements were statements by company officials that the company had faced “a number of headwinds that impacted our financial results … resulting in a larger than expected decline.”
The company’s stock dove 23 percent that day on the news, from $12.73 to $9.62. It fell even further to $8.99 the following day. The stock had closed as high as $17.94 on April 2 of that year. Since the steep drop, the stock had closed as high as $11.85 in February before gradually sinking in recent weeks to close at $9.39 Wednesday.
Boulder Brands earlier this month posted a $1.8 million profit for the first quarter of 2015 as well as a 5 percent increase in sales over the same period a year earlier.
