WMS Industries Inc.
ROBBINS GELLER RUDMAN & DOWD LLP FILES CLASS ACTION SUIT AGAINST WMS INDUSTRIES INC.
May 25, 2011 – Robbins Geller Rudman & Dowd LLP (“Robbins Geller”) (http://www.rgrdlaw.com/cases/wms/) today announced that a class action has been commenced in the United States District Court for the Northern District of Illinois on behalf of purchasers of WMS Industries Inc. (“WMS”) (NYSE:WMS) common stock during the period between November 1, 2010 and April 11, 2011 (the “Class Period”).
If you wish to serve as lead plaintiff, you must move the Court no later than 60 days from today. If you wish to discuss this action or have any questions concerning this notice or your rights or interests, please contact plaintiff’s counsel, Darren Robbins of Robbins Geller at 800/449-4900 or 619/231-1058, or via e-mail at firstname.lastname@example.org. If you are a member of this class, you can view a copy of the complaint as filed or join this class action online at http://www.rgrdlaw.com/cases/wms/. Any member of the putative class may move the Court to serve as lead plaintiff through counsel of their choice, or may choose to do nothing and remain an absent class member.
The complaint charges WMS and certain of its officers and directors with violations of the Securities Exchange Act of 1934. WMS designs, manufactures and distributes both video and mechanical slot machines and video lottery terminals.
The complaint alleges that during the Class Period, the Company, in the face of a known industry-wide slowdown in demand and lengthening of the replacement cycle for gaming products, continued to report that it had and would continue to distinguish itself from its competitors by posting sales revenue and margin gains without the benefit or need for the recovery of overall demand or the casino gaming replacement cycle.
Then on April 11, 2011, the Company pre-announced its third quarter 2011 financial results, stating that it had again missed Wall Street earnings projections by $0.11 per share, reporting 0.42 as opposed to consensus estimates of $0.51. The Company also reported that its revenue forecast for the third quarter of 2011 would be cut by up to $24 million and revenues for fiscal 2011 would be cut by up to $60 million. In addition, the Company reported that it did not expect demand to recover for the remainder of fiscal 2011 or 2012 and thus cut its forecasted fiscal 2012 revenue estimates by up to $120 million. As a result of these disclosures, WMS’s stock price declined more than 17% to close at $30.01 on 9.8 million shares traded, down from a close of $36.22 on April 11, 2011.
According to the complaint, the Class Period representations by defendants concerning the Company’s current business and financial condition, including its forecasted financial results, were each materially false and misleading when made because defendants failed to disclose the following true facts which were known to defendants or recklessly disregarded: (a) the Company’s purported current “execution” on business operations was faltering and could not drive and support revenue and profitability guidance; (b) the industry-wide weak replacement cycle had negatively impacted the Company’s sales and margin growth and could not be offset by currently flawed execution and demand for WMS’s gaming machines; and (c) as a result of the above, the Company did not have a reasonable basis for its revenue and margin forecasts for fiscal 2011 in light of known negative business and industry trends.
Plaintiff seeks to recover damages on behalf of all purchasers of WMS common stock during the Class Period (the “Class”). The plaintiff is represented by Robbins Geller, which has expertise in prosecuting investor class actions and extensive experience in actions involving financial fraud.Robbins Geller, a 180-lawyer firm with offices in San Diego, San Francisco, New York, Boca Raton, Washington, D.C., Philadelphia and Atlanta, is active in major litigations pending in federal and state courts throughout the United States and has taken a leading role in many important actions on behalf of defrauded investors, consumers, and companies, as well as victims of human rights violations. The Robbins Geller Web site (http://www.rgrdlaw.com) has more information about the firm.