SOUTH BURLINGTON, Vt., Sept. 22, 2005 (PRIMEZONE) -- Johnson & Perkinson ("J&P"), a law firm located in South Burlington, Vermont has filed a class action lawsuit today in the United States District Court for the Eastern District of Pennsylvania on behalf of investors who purchased the securities of ATI Technologies, Inc. ("ATI" or the "Company")(Nasdaq:ATYT) between October 7, 2004 and June 22, 2005, inclusive (the "Class Period"). A copy of the complaint is available from the Court or can be viewed on Johnson & Perkinson's website at www.jpclasslaw.com.
The complaint charges ATI Technologies, Kwok Yuen Ho, David E. Orton and Patrick G. Crowley with violations of the Securities Exchange Act of 1934. Specifically, the complaint alleges that throughout the Class Period, ATI reported strong financial results in publicly disseminated press releases and in filings with the SEC. In addition, defendants repeatedly issued positive guidance, claiming that ATI's purported leadership in graphics and multimedia technologies in the consumer electronics and PC markets would "continue driving growth for ATI in fiscal 2005." As a result of these statements, the price of ATI stock became artificially inflated during the Class Period. Certain Company insiders, including defendants Kwok Yuen Ho and David E. Orton took advantage of the artificial inflation in the price of the Company's stock, and during the Class Period, each sold approximately 40% of their personally-held ATI stock for total proceeds of over $54 million.
On June 6, 2005, ATI warned that its revenues for the third quarter 2005 would be $530 million, 5% below the Company's guidance. The Company stated that a shift in its product mix towards the lower end of the desktop and notebook market contributed to a decline in gross margin for the quarter. In addition, ATI claimed that the production of integrated graphics processor products, which had margins well below the corporate average, contributed to lower profit margins, and stated that it was experiencing lower than anticipated yields on certain products due to operational issues. As a result, the Company lowered its guidance for its third and fourth quarter of 2005. In reaction to this news, the price of ATI stock fell $1.58, or 10.3%, from its previous trading day's closing price of $15.26 per share, to close at $13.68 on June 7, 2005. On June 23, 2005, the Company revealed in a press release that it had experienced a net loss of $400,000 in the third quarter 2005, compared to a $49 million profit in the same period in 2004. In addition, defendants slashed their guidance for the fourth quarter, projecting revenues to be approximately $550-580 million, 10% lower than previously projected, and projecting gross margins to be 29-30%, approximately 5% lower than defendants' previous guidance of 34%. In reaction to this news, the price of ATI stock declined even further, falling $0.98, or 7.6%, to close at $11.80 on June 23, 2005.
If you purchased or otherwise acquired the securities of ATI between October 7, 2004 and June 22, 2005, inclusive, and sustained damages, you may, no later than October 17, 2005, request that the Court appoint you as lead plaintiff. A lead plaintiff is a representative party that acts on behalf of other class members in directing the litigation. In order to be appointed lead plaintiff, the Court must determine that the class member's claim is typical of the claims of other class members, and that the class member will adequately represent the class. Under certain circumstances, one or more class members may together serve as "lead plaintiff." Your ability to share in any recovery is not, however, affected by the decision whether or not to serve as a lead plaintiff. You may retain Johnson & Perkinson, or other counsel of your choice, to serve as your counsel in this action.
Johnson & Perkinson is a litigation boutique dedicated to maximizing shareholders' returns and keeping the lead plaintiffs involved in the litigation. Attorneys Johnson and Perkinson are both former employees of the Securities and Exchange Commission. In particular, Mr. Johnson was an attorney with the enforcement division of the SEC from 1980-1985. The firm has prosecuted leading actions on behalf of defrauded investors against numerous public companies resulting in the recovery of many millions of dollars and has been singled out for its excellence by various courts. In 2004, Securities Class Action Services ranked J&P 17th among all Plaintiffs' firms for the overall dollar amount of settlements and 6th for the average amount of securities class action settlements. The firm is currently lead or co-lead counsel in securities class actions pending against Xerox, Priceline, and Exchange Applications and serves on the Executive Committee in the Global Crossing case. Additionally, Johnson & Perkinson serves as co-lead counsel in In re: Sprint Corporation ERISA litigation and serves on the purchase claims sub-committee in In re: Vioxx Products Liability Litigation. Please access the Johnson & Perkinson website at www.jpclasslaw.com for more information about the firm. If you wish to discuss this action or have any questions concerning this Notice or rights or interests with respect to these matters, please contact: Peter McDougall, Esq., at Johnson & Perkinson, 1690 Williston Road, P.O. Box 2305, South Burlington, VT 05403, toll free at 1-877-266-2133 or via e-mail at pmcdougall@jpclasslaw.com.
More information on this and other class actions can be found on the Class Action Newsline at www.primezone.com/ca