NEW YORK, May 13, 2004 (PRIMEZONE) -- The Law Firm of Geller Rudman, PLLC announced today that a class action lawsuit has been filed in the United States District Court for the Northern District of Texas on behalf of purchasers of Odyssey Healthcare, Inc. ("Odyssey Healthcare" or the "Company") (Nasdaq:ODSY) publicly traded securities during the period between May 5, 2003 and February 23, 2004, 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.geller-rudman.com/view_case.asp?cID=277.
The complaint charges that Odyssey, Richard R. Burnham, David C. Gasmire, and Douglas B. Cannon violated sections 10(b) and 20(a) of the Exchange Act, and Rule 10b-5 promulgated thereunder, by issuing a series of material misrepresentations to the market between May 5, 2003 and February 23, 2004. More specifically, the complaint alleges that defendants' statements during the Class Period failed to disclose and misrepresented the following material adverse facts which were then known to defendants or recklessly disregarded by them: (1) that the Company's financial results were materially inflated because at least six of its Hospice programs exceeded the amounts they were entitled to receive in Medicare reimbursements; (2) that the Company admitted patients to its Hospice programs who were not eligible for Medicare yet claimed that such patients were; (3) the Company's financial results were a result of providing a level of care and services below the standards set forth under government guidelines because the Company's caseloads were heavier than industry norms; (4) that the Company could not keep up with its heady growth due to higher labor costs -- especially in California, which represented 13 percent to 15 percent of Odyssey's revenues; (5) that higher drug costs were hurting the Company's margins; and (6) that Odyssey was suffering from negative cash-flows.
On February 23, 2004, Odyssey announced that its first-quarter profits would be below analysts' estimates. According to the Company, it expected its 2004 earnings per share results to reflect a 23 to 25 percent increase over 2003, or $1.03 to $1.05 for the year. For the first quarter of 2004, Odyssey expected earnings per share of $0.20 to $0.22, (analysts' expected the Company to earn earnings per share of $0.25) compared to $0.19 for the first quarter of 2003. News of this shocked the market with shares of Odyssey falling $7.11 per share, or 26 percent, to close at $20.32 per share on February 24, 2004.
In its April 12, 2004 edition, Barron's published an article highlighting the Company's operational issues. Therein, Barron's articulated that there are signs that the Company can't keep up with its heady growth. "Higher labor costs -- especially in California, which represents 13%-15% of its revenues -- as well as higher drug costs hurt Odyssey's margins in last year's fourth quarter. In reporting those results on Feb. 23, the company forecast lower- than-expected earnings for this year. Another red flag: Odyssey disclosed that, in its most recent quarter, six of its programs exceeded the amounts they were entitled to receive in Medicare reimbursements, raising questions about whether patients admitted to its programs are truly eligible." Additionally, the article pointed out: "There are also suggestions that some of Odyssey's strong growth is the result of providing a level of care and services below the standards set forth under government guidelines, including providing adequate bereavement services for patients' families."
If you bought Odyssey Healthcare publicly traded securities between May 5, 2003 and February 23, 2004, inclusive, and you wish to serve as lead plaintiff, you must move the Court no later than June 21, 2004. If you are a member of this class, you can join this class action online at http://www.geller-rudman.com. Any member of the purported class may move the Court to serve as lead plaintiff through Geller Rudman or other counsel of their choice, or may choose to do nothing and remain an absent class member.
Geller Rudman, PLLC is a national law firm that represents investors and consumers in class action and corporate governance litigation. It is one of the country's premier firms in the area of securities fraud, with in-house finance and forensic accounting specialists and extensive trial experience. Since its founding, Geller Rudman, PLLC has grown to become one of the most respected and successful firms representing investors and consumers in class action litigation. The firm came of age under the client focused realities of the Private Securities Litigation Reform Act of 1995, which provided new opportunities for institutional investors to assume leadership in combating securities fraud.
The firm's lawyers have achieved substantial recoveries for aggrieved investors and consumers in class action lawsuits prosecuted in state and federal courts throughout the nation. Geller Rudman, PLLC maintains a widely recognized reputation for excellence, as courts have repeatedly appointed the firm to major positions in intricate multi-district or consolidated litigations. In this regard, Geller Rudman, PLLC has successfully pursued hundreds of class action lawsuits, has taken a lead role in numerous complex litigations on behalf of defrauded investors and consumers and has been responsible for billions in recoveries as well as landmark corporate governance changes. The firm maintains offices in Boca Raton and New York.
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.geller-rudman.com.
More information on this and other class actions can be found on the Class Action Newsline at www.primezone.com/ca