June 02, 2011
Bernstein Liebhard LLP today announced that a lawsuit has been filed in the United States District Court for the Northern District of Illinois on behalf of a class (the “Class”) of investors who purchased WMS Industries, Inc. (“WMS” or the “Company”) (NYSE: WMS) common stock between the period of November 1, 2010 to April 11, 2011 (the “Class Period”).
The complaint charges WMS and certain of its officers and directors with violations of the Securities Exchange Act of 1934. WMS designs, manufactures and distributes both video and mechanical slot machines and video lottery terminals.
The complaint alleges that during the Class Period, the Company, in the face of a known industry-wide slowdown in demand and lengthening of the replacement cycle for gaming products, continued to report that it had and would continue to distinguish itself from its competitors by posting sales revenue and margin gains without the benefit or need for the recovery of overall demand or the casino gaming replacement cycle.
On April 11, 2011, the Company pre-announced its third quarter 2011 financial results, stating that it had again missed Wall Street earnings projections by $0.11 per share, reporting $0.40-$0.42 as opposed to consensus estimates of $0.51. The Company also reported that its revenue forecast for the third quarter of 2011 would be cut by up to $24 million and revenues for fiscal 2011 would be cut by up to $60 million. In addition, the Company reported that it did not expect demand to recover for the remainder of fiscal 2011 or 2012 and thus cut its forecasted fiscal 2012 revenue estimates by up to $120 million. As a result of these disclosures, WMS’s stock price declined more than 17% to close at $30.01 on 9.8 million shares traded, down from a close of $36.22 on April 11, 2011.
According to the complaint, the Class Period representations by defendants concerning the Company’s current business and financial condition, including its forecasted financial results, were each materially false and misleading when made because defendants failed to disclose the following true facts which were known to defendants or recklessly disregarded: (a) the Company’s purported current “execution” on business operations was faltering and could not drive and support revenue and profitability guidance; (b) the industry-wide weak replacement cycle had negatively impacted the Company’s sales and margin growth and could not be offset by currently flawed execution and demand for WMS’s gaming machines; and (c) as a result of the above, the Company did not have a reasonable basis for its revenue and margin forecasts for fiscal 2011 in light of known negative business and industry trends.
Plaintiffs seek to recover damages on behalf of all Class members who purchased or otherwise acquired shares of WMS during the Class Period. If you purchased or otherwise acquired WMS shares during the Class Period, and either lost money on the transaction or still hold the shares, you may wish to join in this action to serve as lead plaintiff. In order to do so, you must meet certain requirements set forth in the applicable law and file appropriate papers no later than July 25, 2011.
A “lead plaintiff” is a representative party that acts on behalf of other class members in directing the litigation. In order to be appointed lead plaintiff, the court must determine that the class member’s claim is typical of the claims of other class members, and that the class member will adequately represent the class. Under certain circumstances, one or more class members may together serve as lead plaintiff. Your ability to share in any recovery is not, however, affected by the decision whether or not to serve as a lead plaintiff. You may retain Bernstein Liebhard LLP, or other counsel of your choice, to serve as your counsel in this action.
If you are interested in discussing your rights as a WMS shareholder and/or have information relating to the matter, please contact Joseph R. Seidman, Jr. at (877) 779-1414 or seidman@bernlieb.com. You can obtain a copy of the complaint from the clerk of the court for the United States District Court for the Northern District of Illinois.
Bernstein Liebhard has pursued hundreds of securities, consumer and shareholder rights cases and recovered almost $3 billion for its clients. It has been named to The National Law Journal’s “Plaintiffs’ Hot List” in each of the last eight years.
