RADNOR, Pa., Sept. 21 LAWFUEL – The Class Actions Lawsuit Newswire — The following statement was issued today by the law firm of Schiffrin Barroway Topaz & Kessler, LLP:
Notice is hereby given that a class action lawsuit was filed in the United States District Court for the Southern District of New York on behalf of all purchasers of common stock of Scholastic Corporation (“Scholastic” or the “Company”) from March 18, 2005 through March 23, 2006, inclusive (the “Class Period”).
If you wish to discuss this action or have any questions concerning this notice or your rights or interests with respect to these matters, please contact Schiffrin Barroway Topaz & Kessler, LLP (Darren J. Check, Esq. or Richard A. Maniskas, Esq.) toll free at 1-888-299-7706 or 1-610-667-7706, or via e-mail at [email protected]
The Complaint charges Scholastic and certain of its officers and directors with violations of the Securities Exchange Act of 1934. Scholastic is a global children’s publishing, education and media company. The Company is a publisher and distributor of children’s books, and a developer of educational technology products. More specifically, the Complaint alleges that the Company failed to disclose and misrepresented the following material adverse facts which were known to defendants or recklessly disregarded by them: (1) that the Company had failed to timely write-down the value of certain print reference set assets; (2) that the Company had failed to adequately reserve for certain bad debts; (3) that, as a result of the above, the Company’s financial statements were materially overstated; (4) that the Company’s Educational Publishing division was experiencing declining results; (5) that the Company’s United Kingdom operations would have to be reorganized due to poor performance; (6) that the Company lacked adequate internal and financial controls; and (7) that, as a result of the foregoing, the Company’s statements about its financial well-being and future prospects were lacking in any reasonable basis when made.
On December 16, 2005, the Company announced disappointing results for the Company’s second quarter 2006. The Company assured investors that its management team was “implementing plans to improve performance in the second half of the year.” The Company reaffirmed that it expected to achieve revenues of $2.3 to $2.4 billion for the year, and free cash flow of $85 — $95 million. Additionally, the Company lowered its earnings guidance to “the bottom end of the previously announced range of $2.30 to $2.50” per share. On this news, shares of the Company’s stock fell $3.80 per share, or 11.5 percent, to close on December 16, 2005 at $29.30 per share, on unusually heavy trading volume.
Then on March 23, 2006, the Company shocked investors when it reported a net loss of $0.37 per share for the third quarter 2006 versus a loss of $0.02 per share in the prior year’s quarter. Additionally, due to the Company’s admittedly disappointing quarterly results, increased expenses, and “greater seasonality,” the Company significantly reduced its outlook for the remainder of the year, down to earnings of between $1.70 and $1.80 per share, and lowered its free cash flow expectation to between $70 — $80 million. On this news, the Company’s shares fell an additional $3.38 per share, or 11.5 percent, to close on March 23, 2006 at $26.04 per share, again on unusually heavy trading volume.
Plaintiff seeks to recover damages on behalf of class members and is represented by the law firm of Schiffrin Barroway Topaz & Kessler which prosecutes class actions in both state and federal courts throughout the country. Schiffrin Barroway Topaz & Kessler is a driving force behind corporate governance reform, and has recovered billions of dollars on behalf of institutional and individual investors from the United States and around the world.
For more information about Schiffrin Barroway Topaz & Kessler or to sign up to participate in this action online, please visit http://www.sbtklaw.com .
If you are a member of the class described above, you may, not later than October 19, 2007, move the Court to serve as lead plaintiff of the class, if you so choose. 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 Schiffrin Barroway Topaz & Kessler or other counsel of your choice, to serve as your counsel in this action.
CONTACT: Schiffrin Barroway Topaz & Kessler, LLP
Darren J. Check, Esq.
Richard A. Maniskas, Esq.
280 King of Prussia Road
Radnor, PA 19087
1-888-299-7706 (toll free) or 1-610-667-7706
Or by e-mail at [email protected]