August 17, 2016 / 10:57 AM / 3 years ago

Performance Sports Group faces SEC investigation

(Reuters) - Canada’s Performance Sports Group Ltd PSG.TO PSG.N said on Wednesday it faced an investigation by the U.S. Securities and Exchange Commission, two days after the sports equipment maker said it was conducting an internal probe into its financials.

The company, formerly known as Bauer Performance Sports, is also subject to regulatory inquiries in Canada, besides the SEC investigation, it said in a filing.

Performance Sports Group spokesman Steven Jones declined to comment beyond the filing.

The company’s U.S.-listed and Toronto-listed shares fell about 14 percent in morning trading.

Performance Sports Group lost more than half of its market value on Monday after the company said it could default on its debt due to a delay in filing its annual report as a result of its internal investigation. The annual report was due Monday.

The company in June slashed its full-year earnings forecast, citing a significant downturn in the baseball and softball markets, mainly due to the bankruptcies of Sports Authority Holdings Inc and online retailer Team Express.

Performance Sports Group said at the time that it had reduced shipments to customers who were not settling payments and anticipated its bad debt reserves would be higher than expected when finalized during the audit of its annual filing.

The company said in July that it would restructure its baseball/softball business and two weeks back announced an organization-wide restructuring, aimed at lowering costs and reducing its workforce by about 15 percent.

Performance Sports Group’s shares were down 14.4 percent at C$2.31 on the Toronto Stock Exchange, while the U.S.-listed shares were off 13.9 percent at $1.80.

Reporting by Amrutha Gayathri in Bengaluru; Editing by Savio D'Souza

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