HAGENS BERMAN, NATIONAL TRIAL ATTORNEYS, Encourages WALD Investors with Substantial Losses to Contact Firm’s Attorneys
SAN FRANCISCO, March 25, 2024 (GLOBE NEWSWIRE) — Hagens Berman urges Waldencast plc (NASDAQ: WALD) investors who suffered substantial losses to submit your losses now.
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Waldencast plc (NASDAQ: WALD) Investigation:
On Mar. 22, 2024, shares in Waldencast fell 11%, after the global beauty and wellness company revealed further accounting adjustments to prior financial statements for its beleaguered Obagi Skincare business.
Waldencast acquired Obagi in July 2022 as part of a $1.2 billion three-way business combination with Obagi and Milk Makeup, billing Obagi as an industry-leading, advanced skin care line positioned in the high-growth dermo-cosmetic category. But over the past year, a series of accounting missteps at Obagi have flagged the company.
Problems with Obagi’s financial reporting were first revealed on May 2, 2023, when Waldencast announced it would not timely file its year end 2022 financial statements because of an ongoing review of accounting issues concerning Obagi’s product sales for the Vietnam market.
Then, on July 5, 2023, Waldencast announced that it would need to restate its financial statements for all of 2021 and for the first two quarters of 2022. The company explained that the misreporting stemmed from improper revenue recognition involving sales of its Obagi skincare products to its Southeast Asia distributor. Among other things, Waldencast said it “expects the revenue in connection with sales of its Obagi products for the Vietnam market during second half of fiscal year 2022 to be reduced to zero from its prior expectation of $33 million[.]”
On Jan. 16, 2024, Waldencast filed restated financial statements for 2020 and 2021. The company admitted that for 2021 it had (1) overstated revenues by about $63.6 million (or about 44%) and (2) overstated accounts receivable by about $44.6 million (or about 238%).
The Company further disclosed that as a result of the restatements, the SEC had launched an investigation and had subpoenaed the company for documents.
On Jan. 31, 2024, two weeks after the restatement, Waldencast announced that Philippe Gautier, its current chief financial officer and chief operating officer, was leaving the company, effective immediately. The company named Manuel Manfredi, an outsider, as its new CFO.
The accounting situation at Obagi became worse by Mar. 21, 2024, when Waldencast announced “adjustments” to the previously reported balance sheet and income statement data of Obagi as of- and for the period ended- Mar. 31, 2022. As to the balance sheet, Obagi’s accounts receivable were overstated by $45.6 million (or overstated by about 440%). As to the income statement, Obagi’s revenues were overstated by $13.6 million (or overstated by about 42%) and its net losses were understated by $2.8 million (or understated by about 55%).
These events have driven the price of Waldencast shares sharply lower.
“We are investigating whether Waldencast may have intentionally overstated Obagi’s revenues to appear more profitable,” said Reed Kathrein, the Hagens Berman partner leading the firm’s investigation.
If you invested in Waldencast and have substantial losses, or have knowledge that may assist the firm’s investigation, submit your losses now »
If you’d like more information and answers to frequently asked questions about the Waldencast investigation, read more »
Whistleblowers: Persons with non-public information regarding Waldencast should consider their options to help in the investigation or take advantage of the SEC Whistleblower program. Under the new program, whistleblowers who provide original information may receive rewards totaling up to 30 percent of any successful recovery made by the SEC. For more information, call Reed Kathrein at 844-916-0895 or email WALD@hbsslaw.com.
About Hagens Berman
Hagens Berman is a global plaintiffs’ rights complex litigation law firm focusing on corporate accountability through class-action law. The firm is home to a robust securities litigation practice and represents investors as well as whistleblowers, workers, consumers and others in cases achieving real results for those harmed by corporate negligence and fraud. More about the firm and its successes can be found at hbsslaw.com. Follow the firm for updates and news at @ClassActionLaw.
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Contact:
Reed Kathrein, 844-916-0895
