ST. PAUL, Minn., Aug. 9, 2004 (PRIMEZONE) -- Reinhardt Wendorf & Blanchfield announces that a class action lawsuit was filed in the United States District Court for the District of Minnesota on August 6, 2004, on behalf of purchasers of Ceridian Corp. ("Ceridian" or "the Company") (NYSE:CEN) securities during the period between April 17, 2003 and July 19, 2004 (the "Class Period").
The complaint charges Ceridian and certain of its officers and directors with violations of the Securities Exchange Act of 1934. Ceridian offers a broad range of managed human resource solutions designed to help companies maximize the value of their people by more effectively managing their work forces and the information that is integral to human resource processes. The complaint alleges that during the Class Period, defendants caused Ceridian's shares to trade at artificially inflated levels through the issuance of false and misleading financial statements, which included the improper capitalization as assets of certain costs which should have been expensed. Defendants took advantage of the inflated share price by selling 216,298 shares of their individual Ceridian holdings for proceeds of $3.9 million. On February 18, 2004, the Company announced it would restate its 2000-2003 financials due to a revenue recognition change within its Stored Value System business unit. The Company's stock declined on this news. However, the stock soon recovered due to defendants' assurances that the change was limited in scope and would not materially impact futures results.
On July 19, 2004, the Company announced the postponement of its Q2 04 earnings release and investor call. According to the complaint, the defendants were struggling to conceal that the Company's capitalization and expensing of certain costs in its U.S. Human Resource Solutions ("HR Solutions") business were false. This false accounting will adversely impact the Company's Q2 04 results as well as previously reported periods and guidance. This was the second time in as many quarters that an accounting issue had taken center stage for the Company. On this news, Ceridian's stock price dropped to $18.20 per share, on volume of 6.8 million shares. The complaint alleges that defendants' revelations indicate that the Company's comprehensive HR Solutions deals, which often require upfront customization work during the implementation process, were falsely accounted for. The Company had been capitalizing these upfront costs rather than expensing them immediately. As a result, the prior results need to be restated. The Company capitalized approximately $30 million of internally developed software expenses in its HR Solutions division in 2003. If expensed, this would reduce 2003 EPS by some $0.13. Plaintiff seeks to recover damages on behalf of all purchasers of Ceridian publicly traded securities during the Class Period (the "Class"). The plaintiff is represented by Reinhardt Wendorf & Blanchfield which has expertise in prosecuting investor class actions and extensive experience in actions involving financial fraud.
Reinhardt Wendorf & Blanchfield and its predecessor firm have devoted its practice to shareholder class actions and complex commercial litigation for more than thirty years and have recovered hundreds of millions of dollars for shareholders in class actions throughout the United States.
If you purchased or otherwise acquired any of the Ceridian stock described above, between April 17, 2003 and July 19, 2004 and sustained damages, you may, no later than 60 days from August 6, 2004, move the Court to serve as lead plaintiff. If you wish to discuss this case or have questions concerning these cases or your rights or interests, please contact: Garrett D. Blanchfield of Reinhardt Wendorf & Blanchfield at 800-465-1592 or 651-287-2100, via facsimile at 651-287-2103 or via email at g.blanchfield@rwblawfirm.com. For more information about Reinhardt Wendorf & Blanchfield, visit our website at www.rwblawfirm.com.