LITTLE ROCK, Ark., Sept. 27, 2002 (PRIMEZONE) -- The deadline for purchasers of MSC Industrial Direct Co. ("MSC Industrial" or the "Company") (NYSE:MSM) publicly traded securities to move for lead plaintiff in a securities fraud class action recently brought against the Company is rapidly approaching. If you purchased MSC Industrial securities between January 11, 1999 and August 5, 2002, inclusive (the "Class Period"), and you wish to be a lead plaintiff in the case, you must move to serve as lead plaintiff by filing a motion in the United States District Court for the Eastern District of New York by October 7, 2002. 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.cauleygeller.com/pr/msc_industrial.pdf.
The Complaint alleges that defendants MSC Industrial, Mitchell Jacobson, Sidney Jacobson, Shelley M. Boxer, Charles Boehlke, David Sandler and James Schroeder violated Sections 10(b) and 20(a) of the Securities Exchange Act of 1934, and Rule 10b-5 promulgated thereunder, by issuing a series of material misrepresentations to the market between January 11, 1999 and August 5, 2002, thereby artificially inflating the price of MSC Industrial securities. Throughout the Class Period, as alleged in the complaint, defendants issued numerous statements and filed quarterly and annual reports with the SEC which described the Company's increasing net income and financial performance. As alleged in the complaint, these statements were materially false and misleading because they failed to disclose and/or misrepresented the following adverse facts, among others: (i) that the Company had materially overstated its net income by approximately $8.3 million over the past four years; (ii) that the Company lacked adequate internal controls and was therefore unable to ascertain the true financial condition of the Company; and (iii) that as a result, the value of the Company's net income and financial results were materially overstated at all relevant times.
On August 5, 2002, the last day of the Class Period, with one minute remaining before the closing bell, the Company shocked the market when it announced that it "has discovered incorrect accounting entries associated with inventory purchases that overstated net income by approximately $8.3 million over the past four years. The incorrect entries resulted in the understatement of cost of goods sold and accounts payable and occurred primarily in fiscal 1999 and fiscal 2000. As a result, the Company intends to restate its financial statements for fiscal years 1999, 2000, 2001 and year-to-date 2002." According to the press release, the specific impact that the restatement will have will be to reduce previously reported net income by approximately $2.8 million in fiscal 1999, $4.2 million in fiscal 2000, $0.9 million in fiscal 2001, and $0.4 million in fiscal 2002.
Following this report, shares of MSC Industrial fell $4.99 per share to close at $10.51 per share, a one-day decline of 32%, on volume of more than 3.95 million shares traded, or more than twenty-six times the average daily volume.
If you bought MSC Industrial common stock between January 11, 1999 and August 5, 2002, inclusive, and you wish to serve as lead plaintiff, you must move the Court no later than October 7, 2002. If you are a member of this class, you can join this class action online at http://www.cauleygeller.com/sign_up.html. Any member of the purported class may move the Court to serve as lead plaintiff through Cauley Geller or other counsel of their choice, or may choose to do nothing and remain an absent class member.
Cauley Geller is a national law firm that represents investors and consumers in class action and corporate governance litigation. It is one of the country's premiere firms in the area of securities fraud, with in-house finance and forensic accounting specialists and extensive trial experience. Since its founding, Cauley Geller has recovered in excess of two billion dollars on behalf of aggrieved shareholders. The firm maintains offices in Boca Raton, Little Rock, and San Diego.
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.cauleygeller.com.
CAULEY GELLER BOWMAN & COATES, LLP Investor Relations Department: Jackie Addison, Sue Null or Ellie Baker P.O. Box 25438 Little Rock, AR 72221-5438 Toll Free: 1-888-551-9944 E-mail: info@cauleygeller.com
More information on this and other class actions can be found on the Class Action Newsline at www.primezone.com/ca.