NEW YORK, Dec. 9, 2011 (GLOBE NEWSWIRE) -- Pomerantz Haudek Grossman & Gross LLP is investigating claims on behalf of investors of Green Mountain Coffee Roasters, Inc. ("GMCR" or the "Company"), between February 2, 2011 and November 9, 2011. Such investors are advised to contact Rachelle R. Boyle at rrboyle@pomlaw.com or 888-476-6529, ext. 350.
The investigation concerns whether GMCR and several of its key executives violated federal securities laws by making false and misleading statements concerning sales orders for hundreds of millions of dollars in its popular Keurig single-cup brewing system, which uses "K-Cup" portion packs to brew single servings of coffee and other beverages. These two line items, K-Cups and the brewers, accounted for approximately 86% and 84% of GMCR's consolidated net sales in fiscal 2010 and 2011, respectively.
The alleged fraudulent scheme at GMCR involved materially overstating the Company's earnings based on falsified sales orders and sham inventory shipments, and booking "revenues" associated with these false sales orders and shipments as though they were real. These acts resulted in material misstatement of multiple metrics, including the Company's profits, and inventory and product demand levels. These dummy sales were also carried as assets on the Company's balance sheet.
On October 17, 2011, David Einhorn, an investor in GMCR, made a conference presentation in which he detailed GMCR's financial reporting and the relationship with M. Block & Sons, the fulfillment operation responsible for processing the majority of GMCR sales orders. On news of this, GMCR's common stock share price dropped 33%.
On November 9, 2011, GMCR surprised analysts by announcing highly disappointing earnings. The Company missed sales earnings for the first time in more than eight quarters, and fell approximately $50 million short of analysts' consensus revenue estimates. The Company also announced skyrocketing inventory (up 156% year-over-year) in sharp contrast to prior statements. On this news, GMCR's shares plummeted 40%, from a close of $67.02 on November 8, 2011 to $40.89 on November 9, 2011, on extremely heavy trading volume.
The Pomerantz Firm, with offices in New York, Chicago, and Washington, D.C., is acknowledged as one of the premier firms in the areas of corporate, securities, and antitrust class litigation. Founded by the late Abraham L. Pomerantz, known as the dean of the class action bar, the Pomerantz Firm pioneered the field of securities class actions. Today, more than 70 years later, the Pomerantz Firm continues in the tradition he established, fighting for the rights of the victims of securities fraud, breaches of fiduciary duty, and corporate misconduct. The Firm has recovered numerous multimillion-dollar damages awards on behalf of class members. See www.pomerantzlaw.com.