While sales were slipping, Krispy Kreme's corporate executives were preoccupied with sorting out an accounting mess. A stock that once traded above $50 bottomed out last year around $4, and the company's board ousted two former executives it concluded were trying to "manage earnings" to meet Wall Street expectations.

The company has reached a tentative $75 million settlement of a securities class action lawsuit, but investigations by the federal Securities and Exchange Commission and federal prosecutors in New York remain unresolved. The company has yet to file six quarterly earnings reports, dating as far back as fiscal 2005.

For fiscal 2006, the company reported revenues of $543 million and a net loss of $136 million. A year earlier, Krispy Kreme lost $198.3 million on revenue of $707.8 million.

The company's annual report cautioned investors that the new executives need time to become familiar with each other and the business, and their efforts "have been hindered at times by a lack of institutional knowledge." Still, Darren Tristano, executive vice president of Technomic Inc., a Chicago-based food service industry research and consulting firm, said that there are some obvious things the company should try to boost sales — things it seems to be trying in Utah.

"They have to broaden their offering," Tristano said, by selling a wider array of beverages, for example.

"We've seen a lot more competition on the breakfast front, and right now they are not a major player."

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