Diamond Foods Proposes To Settle Private Securities Class Action Suit

(RTTNews) - Diamond Foods, Inc. (DMND), a packaged food company, Wednesday said it reached a proposed agreement to settle the private securities class action pending against the company and two of its former officers, subject to the Court approval. Pursuant to the settlement, Diamond would pay $11 million in cash and issue 4.45 million common shares to a Settlement Fund to resolve all claims asserted on behalf of investors who purchased or otherwise acquired Diamond stock between October 5, 2010 and February 8, 2012.

A considerable portion of the $11 million would be funded by Diamond's insurers, and the company said it would privately place, or conduct a public offering with respect to the 4.45 million shares. If this settlement is approved by the Court, a notice to the Class members will be sent with information regarding the allocation and distribution of the Settlement Fund and instructions on procedures to follow to make a claim on the Settlement Fund.

Further, the company provided guidance for the fourth-quarter net sales to be in range of $196 million to $201 million, gross margin of 25.5 percent to 27 percent and adjusted EBITDA to be between $21 million and $24 million. Analysts expect the company to report revenues of $265.38 million.