The legal stoush is just one of the problems that BWX is currently wresting with.
The company was forced to make a second profit downgrade in less than three months in late December. This sent its shares tumbling to end the year at $1.58, down from a high of $8.06 in January 2018.
BWX says it now expects normalised earnings before interest, tax, depreciation and amortisation for the 2019 financial year to be in the range of $27 million to $32 million. Its previous guidance had normalised full-year EBITDA to be broadly in line with 2018’s figure of $40.3 million.
BWX chief executive Myles Anceschi, who formally took over the top job in September, blamed the downgrade on weaker sales in China, staff changes in US and the shifting nature of the Australian pharmacy sector, where its best known brand, Sukin, is sold.
US court documents show the legal fight with Waterloo centres around an agreement made in May 2017 that would have seen Waterloo paid for every deal that BWX did in the US, plus an additional success fee if the total of the acquisitions was higher than $US130 million.
Waterloo argues that the price BWX eventually paid for the two businesses it bought, Andalou and Mineral Fusion, was in excess was $US130 million, entitling Waterloo to an extra payment of $US1.4 million.
BWX is fighting the case. BWX shares rose 5.7 per cent on Wednesday morning to $1.67.