| Company: | Scholastic Corporation |
| Ticker Symbol: | NASD: SCHL |
| Class Period: | March 18, 2005 to March 23, 2006 |
| Date Filed: | Sep-21-07 |
| Lead Plaintiff Deadline: | Oct-19-07 |
| Court: | Southern District, NY |
| Allegations: |
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").
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.
If you acquired the securities of the defendants during the Class Period you may, no later than the Lead Plaintiff Deadline shown above, request that the Court appoint you as lead plaintiff through counsel of your choice. You may also choose to remain an absent class member. A lead plaintiff must meet certain requirements.
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.
If you acquired the securities of the defendants during the Class Period you may, no later than the Lead Plaintiff Deadline shown above, request that the Court appoint you as lead plaintiff through counsel of your choice. You may also choose to remain an absent class member. A lead plaintiff must meet certain requirements.
