Spectrum Brands Legacy, Inc. f/k/a Spectrum Brands Holdings, Inc.
- Company Name
- Spectrum Brands Legacy, Inc. f/k/a Spectrum Brands Holdings, Inc.
- Stock Symbol
- Class Period
- June 14, 2016 to April 25, 2018
- Motion Deadline
- May 6, 2019
- Western District of Wisconsin
The complaint charges Spectrum and certain of its officers with violations of the Securities Exchange Act of 1934. Spectrum is a diversified global branded consumer products company manufacturing, marketing and distributing a variety of products in approximately 160 countries. Spectrum operates through two segments: the Hardware & Home Improvement segment and the Global Auto Care segment. The Company’s products include items related to security, plumbing and hardware, along with various types of car-care products.
The complaint alleges that during the Class Period, defendants issued false and misleading statement and/or failed to disclose adverse information regarding Spectrum’s business and operations. Specifically, defendants failed to disclose that Spectrum had been experiencing recurring operational issues that would continuously impact production, shipping levels and sales of its products. As a result of this information being withheld from the market, Spectrum securities traded at artificially inflated prices during the Class Period, with its stock price reaching a high of more than $120 per share.
Then on April 26, 2018, Spectrum issued a press release announcing its financial and operating results for the second fiscal quarter ended April 1, 2018, reporting net income of $0.8 million compared to net income of $39.9 million in the previous year’s comparable quarter. The Company attributed the disappointing results to “greater than expected” challenges to its “‘two greenfield manufacturing and distribution projects,” stating that as it “brought [its] East Coast distribution center into [its] new Hardware & Home Improvement facility in . . . Kansas at the end of February, [it] experienced facility-wide disruptions which hampered distribution capabilities materially in March’” and that its “‘Global Auto Care facility in Dayton struggled at higher production levels in March, which led to significant inefficiencies and shipping challenges.” As a result of these self-inflicted operational issues, ‘”sales of about $30 million from in-house orders could not be shipped by quarter-end due to higher customer order backlogs at [the Company’s] facilities.’” The same day, Spectrum announced that its CEO was stepping down, effective immediately. Following this news, the price of Spectrum shares fell more than 20%, from a close of $94.23 per share on April 24, 2018, to a close of $75.01 per share the following day.