Irvine-based coffeehouse chain Diedrich Coffee Inc. filed restated annual reports on Tuesday for 2002 through 2004 that reflect changes in its accounting for leases.
Diedrich said its net income for the three years ended June 30 was reduced by a total of $400,000 after the restatement. Diedrich previously said that changes in lease-related accounting issues could impact income by as much as $1.4 million for the period.
The accounting issue is one that many publicly traded companies in the retail industry have been grappling with. New accounting standards call for a shorter depreciation period for store leases, which negatively impacts income.
“We do not feel it will have any impact on our future operations and results,” said Diedrich Chief Executive Roger “Rocky” Laverty.
Laverty said the company’s results for the quarter and 12 months ended June 29 will be released Wednesday.
“We did not have a lease impact in that year,” Laverty said of the results expected on Wednesday.
Diedrich, which trades on Nasdaq, had faced delisting if it didn’t get its past accounting for leases straightened out.
Shares of Diedrich closed Tuesday at $8.16, up 13 cents. In afterhours trading, the stock was down 59 cents, or 7%.
Late last year Diedrich sold the international operation of its Gloria Jean’s chain to Australia’s Jireh International Pty. Ltd. for $16 million upfront and as much as $7.3 million more during the next six years.
Diedrich plans to use some of the funds to build up its remaining three retail units: Diedrich Coffee, Coffee People and its Gloria Jean’s U.S. chain.
Diedrich’s financial results have steadied after several years of decline. Factoring out a gain from the sale of the Gloria Jean’s unit, Diedrich posted a loss of $873,000 in the quarter ended March 9, versus a loss of $709,000 a year earlier.
