PHILADELPHIA, July 7, 2003 (PRIMEZONE) -- Law Offices Bernard M. Gross, P.C. (http://www.bernardmgross.com) announces that a class action lawsuit was commenced in the United States District Court for the District of Massachusetts, numbered 03 cv11270, on behalf of purchasers of PolyMedica Corporation ("PolyMedica" or the "Company") (Nasdaq:PLMD) securities during the period between July 23, 2001 and June 30, 2003, and who have been damaged thereby. (the "Class Period").
The action, names as defendants Steven L. Lee -- Chief Executive Officer from June, 1996 to August 4, 2002, and Chairman of the Board of Directors from June, 1996 to December 31, 2002; Samuel L. Shanaman -- interim Chief Executive Officer and Lead Director, Arthur A. Siciliano -- President, John K. P. Stone -- Senior Vice President and General Counsel, Stephen C. Farrell - Chief Financial Officer and Senior Vice President, Eric Walters -- Executive Vice President, Investor Communication and Medicare-Compliance, Warren K. Trowbridge -- President of PolyMedica's subsidiary, Liberty Medical Supply, Inc. and PolyMedica. The Honorable Reginald C. Lindsay is presiding. A copy of the Complaint is available from the Court, 1 Courthouse Way, Suite 9200, Boston, Massachusetts or can be viewed at the Law Offices Bernard M. Gross, P.C. website at www.bernardmgross.com or contact us by phone at 866-561-3600 (toll free).
The Complaint alleges that throughout the Class Period, defendants issued statements, press releases, and filed quarterly and annual reports with the SEC describing the Company's business operations and financial condition. These representations were materially false and misleading because they failed to disclose that throughout the Class Period, the Company had materially misstated its operating earnings.
Specifically, during the relevant time period, it has been alleged that PolyMedica overstated earnings by capitalizing direct response advertising costs related to the acquisition of new customers rather than expensing them as incurred. Consequently, PolyMedica recorded such advertising costs as assets rather than as expenses. By accounting for these expenses as assets, PolyMedica could spread the cost over a two to four year period rather than accounting for the expense in the quarter in which they were incurred. This allowed PolyMedica to understate operating expenses, overstate assets, and create a false impression of operating efficiencies with the overall effect being that the Company misled investors concerning the Company's growth and earnings. This contrivance violates Generally Accepted Accounting Principles and the SEC has closely scrutinized this practice.
On June 30, 2003, after the stock market closed, PolyMedica issued a press release announcing that as a result of discussions with the SEC regarding the expensing of the Company's direct response advertising costs, PolyMedica may be forced to restate results for the fiscal years 2002 and 2003. The Company said the restatement would reduce its fiscal 2002 earnings to $1.76 from $2.38 per share, a reduction of 26%, its fiscal 2003 to $2.61 from $3.21, a reduction of 19%, and fiscal 2004 first quarter earnings expectations to $.66-.72 from $.84-.90. On this news, shares of PolyMedica, which had closed at $45.86 on June 30, 2003, opened for trading on July 1, 2003, at $38.56, down $7.30, or 15.9%. PolyMedica shares closed later that day at $37.39 per share for a loss of $8.47 per share, or 18.5%.
Plaintiff seeks to recover damages on behalf of Class members and is represented by the law firm of Law Offices Bernard M. Gross, P.C. which has significant experience and expertise in prosecuting class actions.
If you purchased the securities of PolyMedica Corporation during the period between July 23, 2001 and June 30, 2003, you may no later than September 1, 2003 move the Court to serve as lead plaintiff of the Class, if you so choose. You may retain the Law Offices Bernard M. Gross, P.C., or other counsel of your choice, to serve as your counsel in this action. If you are interested in being included in our action or serving as one of the lead plaintiffs, please click here to print the Plaintiff's Certification form. After you have printed the form please fill in your name and your transactions in the Company's stock during the Class Period, sign the certification and fax it to 215-561-3000 and send the original by mail to the Law Offices Bernard M. Gross, P.C., 1515 Locust St., 2nd Floor, Philadelphia, PA 19102. If you wish to discuss this action or have any questions concerning this Notice or rights or interests with respect to these matters, PLEASE CONTACT:
Law Offices Bernard M. Gross, P.C.
Susan R. Gross, Esq.
Deborah R. Gross, Esq.
1515 Locust Street, Suite 200
Philadelphia, PA 19102
Telephone: 866-561-3600 (toll free)
or 215-561-3600
E-mail: susang@bernardmgross.com or
debbie@bernardmgross.com.
Website: http://www.bernardmgross.com
More information on this and other class actions can be found on the Class Action Newsline at www.primezone.com/ca