NEW YORK, July 21, 2003 (PRIMEZONE) -- The law firm of Kirby McInerney & Squire, LLP announces that a class action lawsuit has been commenced in the United States District Court for the District of Massachusetts on behalf of all purchasers of PolyMedica Corporation ("PolyMedica" or the "Company") (Nasdaq:PLMD) common stock during the period from July 23, 2001 through June 30, 2003, inclusive (the "Class Period").
Please visit our website, which offers summary and detailed information concerning the suit at http://www.kmslaw.com/new_cases/PolyMedica/PolyMedica.htm or contact us by phone at (888) 529-4787 or by email at emui@kmslaw.com for more information.
The action charges certain of PolyMedica's senior officers with violations of Sections 10(b) and Rule 10b-5 of the Securities Exchange Act of 1934. The alleged violations stem from the dissemination of false and misleading statements, which had the effect -- during the Class Period -- of artificially inflating the price of PolyMedica's shares.
PolyMedica issued a series of material misrepresentations to the market concerning the Company's financial condition during the Class Period. 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%.
Kirby McInerney & Squire, LLP has specialized in complex litigation, including securities class actions, for several decades. The firm has repeatedly demonstrated its expertise in this field, and has been recognized by various courts which have appointed the firm to major positions in consolidated and multi-district litigation. The firm's efforts on behalf of shareholders in securities litigation have resulted in recoveries totaling hundreds of millions of dollars, and its achievements and quality of service have been chronicled in numerous published decisions. More information about the firm, class actions in general, or about the role of the lead plaintiff in a securities class action can be obtained through Kirby McInerney & Squire's website at http://www.kmslaw.com.
If you are a member of the class described above, you may, no later than September 1, 2003, move the Court to serve as lead plaintiff of the class, if you so choose, pursuant to the Private Securities Litigation Reform Act of 1995 (the "PSLRA"), 15 U.S.C. section 78u-4(a). A lead plaintiff is a representative party that acts on behalf of other class members in directing the litigation. 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 seek appointment as a lead plaintiff. For more information about the case, its claims, and your rights, you can contact:
Ira M. Press, Esq. Elaine Mui KIRBY McINERNEY & SQUIRE, LLP 830 Third Avenue, 10th Floor New York, New York 10022 Telephone: (212) 317-2300 or Toll Free (888) 529-4787 E-Mail: emui@kmslaw.com
More information on this and other class actions can be found on the Class Action Newsline at www.primezone.com/ca