Provo-based nutritional supplement maker Nature's Sunshine Products Inc. retracted four years of financial statements Monday and warned that it faced possible delisting from the Nasdaq stock exchange, government investigations and termination of senior officers.
Its stock price sank more than 13 percent.
The company said in an 8-K filing with the U.S. Securities and Exchange Commission that a preliminary report of its audit committee which was first assembled to investigate certain foreign operations but later expanded to include its general financial statements found "certain internal control weaknesses and outlined potential violations of law." It did not elaborate on what those weaknesses were, or the potential legal violations.
The committee's report included recommendations, "including with respect to the termination of certain employees and senior officers," the company said in the filing. It did not elaborate.
Representatives of Nature's Sunshine Products did not respond Monday to requests for further comment.
The audit committee's investigation is ongoing, the filing said. Meanwhile, Nature's Sunshine said it has contacted the "relevant authorities" with respect to potential wrongdoings. It did not say which agencies were contacted, or whether those agencies have or likely will launch independent investigations. But the company said it "intends to fully cooperate with such authorities concerning these matters, and to make a full report to these authorities, if appropriate."
Based on the audit committee's report, the company said its financial statements for 2005 (10-Q), 2004 (10-K) and forms 10-Q for 2002, 2003 and 2004 should not be relied upon. Nor, the company said, should investors rely on the management's report, included in its 2004 annual report, regarding internal control over financial reporting.
Nature's Sunshine Products already missed its filing deadline with the Nasdaq stock exchange for the financial quarter ended Sept. 30, 2005. The stock exchange gave it an extension until March 31 to file its complete 10-Q statement, but the company said Monday it now does not expect to meet that deadline, nor its 10-K for the fiscal year ended Dec. 31, 2005. As such, the company warned that its stock may be delisted; and, if that happened, its liquidity "would be severely impacted."