LITTLE ROCK, Ark., Dec. 7, 2001 (PRIMEZONE) The Law Firm of Cauley Geller Bowman & Coates, LLP announced today that a class action has been filed in the United States District Court for the Northern District of Georgia on behalf of purchasers of WestPoint Stevens Inc. ("WestPoint Stevens" or the "Company") (NYSE:WXS) common stock during the period between February 10, 1999 and October 10, 2000, inclusive (the "Class Period"). A copy of the complaint filed in this action is available from the Court, or can be viewed on the firm's website at http://www.classlawyer.com/pr/westpointstevens.pdf.
The complaint charges WestPoint Stevens and certain of its officers and directors with violations of the Securities Exchange Act of 1934. The complaint alleges that to boost WestPoint Stevens stock on February 10, 1999 and again on April 15, 1999, defendants caused WestPoint Stevens to report better-than-expected 4thQ 98 and 1stQ 99 results. WestPoint Stevens also assured investors and analysts that its business remained extremely strong, demand for all of its products was good, its inventories were under control and that it remained postured to achieve revenue and EPS growth of 5% and 20%, respectively, going forward and was increasing its 99 and 00 EPS forecasts to $1.82-$1.85 and $2.10-$2.20, respectively. Based on these better-than-expected 1stQ 99 results and defendants' positive commentary on WestPoint Stevens' business, WestPoint Stevens stock advanced to its Class Period high of $37-9/16 in late April 1999 from $25-3/8 at the beginning of the Class Period.
When WestPoint Stevens reported its 2ndQ and 3rdQ 99 results, it again assured investors that its business was very strong. It also told investors that while its inventories had increased, especially towels, the increased towel inventory did not pose any significant risk of loss to WestPoint Stevens because it was basic solid colored goods with core value. WestPoint Stevens continued to forecast strong revenue and EPS growth for the balance of 99 and 00, including 00 EPS of $2.10-$2.20.
On June 28, 2000, defendants announced that the Company's Eight-Point Program would ensure strong performance in the future, that momentum was building for strong prospects throughout 00 and inventory was now on target to below $400 million by year-end and the Company was still on tract to report EPS of $2.08+ and $2.40 in 00 and 01, respectively. As a result, WestPoint Stevens' stock stabilized in the $10-$15 range through the remainder of the Class Period. However, by late September, 2000, defendants knew that it would be impossible for them to continue to conceal the severe deterioration in WestPoint Stevens' business any longer, and that once the Company reported its 3rdQ 00 results, it would be apparent to the market how horrible WestPoint Stevens' business was actually performing and the stock would collapse. In an attempt to cause the stock to make a "soft landing" for what they knew would be horrible 00 results, defendants on September 27, 2000 announced that 3rdQ 00 results would be flat with 3rdQ 99 results, in the same press release in which the Company also announced a new licensing agreement with Disney. WestPoint Stevens' stock declined only slightly on this news to $11-9/16 due to defendants' positive statements. Then, on October 10, 2000, WestPoint Stevens revealed that 3rdQ 00 sales would actually decline 3% from the prior year, with earnings of only $0.55-$0.60 per share, lower than prior guidance. On this news, WestPoint Stevens stock declined to below $9 per share.
If you bought WestPoint Stevens common stock between February 10, 1999 and October 10, 2000, inclusive, and you wish to serve as lead plaintiff, you must move the Court no later than December 21, 2001. If you are a member of this class, you can join this class action online at http://www.classlawyer.com/sign_up.html. Any member of the purported class may move the Court to serve as lead plaintiff through Cauley Geller Bowman & Coates, LLP or other counsel of their choice, or may choose to do nothing and remain an absent class member.
Cauley Geller Bowman & Coates, LLP has substantial experience representing investors in securities fraud class action lawsuits such as this. The firm has offices in Florida, Arkansas and California, but represents investors throughout the nation. If you have any questions about how you may be able to recover for your losses, or if you would like to consider serving as one of the lead plaintiffs in this lawsuit, you are encouraged to call or e-mail the Firm or visit the Firm's website at www.classlawyer.com.
CAULEY GELLER BOWMAN & COATES, LLP Investor Relations Department: Jackie Addison, Sue Null or Charlie Gastineau P.O. Box 25438 Little Rock, AR 72221-5438 Toll Free: 1-888-551-9944 E-mail: info@classlawyer.com
More information on this and other class actions can be found on the Class Action Newsline at www.primezone.com/ca