Shares of Boulder Brands Inc. sunk more than 20 percent Wednesday on news that CEO Steve Hughes resigned and the natural foods and buttery-spreads company expected sales to fall in the second quarter.
Hughes, who in 2005 co-founded the company then known as Boulder Specialty Brands, resigned from his positions as chief executive and director effective immediately. James B. Leighton, chief operating officer, will step into the CEO role on an interim basis.
“The board believes now is the time for new leadership at Boulder Brands,” board chairman Dean Hollis said in a statement. “This change, along with the evolving dynamics of our industry, gives us confidence that we are well-positioned to leverage customer and consumer desires for authentic and scalable natural brands to deliver sustainable results and generate meaningful value creation.”
Boulder Brands did not return calls for comment.
Hughes’ departure could cost the company as much as $4.5 million in cash and benefits, according to the company’s latest proxy statement, which was filed in May. Hughes owns 3.3 million shares, or 5.3 percent of the company’s outstanding common stock.
, which owns brands such as , Udi’s Gluten Free and Smart Balance, plans to conduct a national search for a new CEO and will consider internal and external candidates, officials said.
Boulder Brands also released guidance for the second quarter, a period that the company expects a “reduction in sales trends.”
Shares of Boulder Brands, which trades on Nasdaq under the symbol BDBD closed at $6.91, down $1.97, or 22.2 percent.
Second quarter sales are projected to be in the range of $122 million and $124 million, down 5 percent to 7 percent from the second quarter of 2014.
The company’s natural category, which includes brands such as Udi’s, is expected to have flat or a minimal increase in sales. Sales in the Balance segment of oil-based spreads are expected to fall between 16 percent and 18 percent, officials said.
Earnings per share are expected to range from break-even to 2 cents.
Boulder Brands’ shares have lost half their value since hitting a 52-week high of $15.20 in September. A month later, after the company released .
The company closed the third quarter with a after taking $150 million in impairment charges to goodwill and the Smart Balance trade name.
The poor performance triggered alleging that starting in December 2013, Boulder Brands officials failed to disclose: the company was having trouble integrating the Udi’s and Evol brands, which it , respectively; its Smart Balance product was under-performing; and that officials misled investors about expected gross margins.
Alicia Wallace: 303-954-1939, awallace@denverpost.com or twitter.com/aliciawallace
