MURRAY, FRANK & SAILER LLP ANNOUNCES CLASS ACTION LAWSUIT AGAINST 99 CENTS ONLY STORES ON BEHALF OF SHAREHOLDERS - OVTI
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New York, NY (PrimeZone) July 2, 2004
Murray, Frank & Sailer LLP announces that a class action lawsuit was filed in the United States District Court for the Central District of California on behalf of purchasers of 99 Cents Only Stores ("99 Cents") (NYSE:NDN) common stock during the period between March 11, 2004 and June 10, 2004 (the "Class Period").
The complaint charges 99 Cents and certain of its officers and directors with violations of the Securities Exchange Act of 1934. 99 Cents is a deep-discount retailer of primarily name brand and consumable general merchandise in the United States. As of March 12, 2004, the Company operated 194 retail stores with 150 in California, 19 in Texas, 15 in Arizona and 10 in Nevada.The complaint alleges that during the Class Period, defendants issued materially false and misleading statements regarding the Company's business and prospects. As a result of the defendants' false statements, 99 Cents stock traded at artificially inflated prices during the Class Period, trading in the mid to high $20 range.According to the complaint, defendants concealed from the investing public that: (i) in order to inflate the Company's margins, especially to show success in the Company's newer markets, i.e., Texas, defendants created the appearance of profitability and success by, among other things, not accruing for proper expenses (the roll-out of the Company's advertising implementation and distribution costs); (ii) the Company's margins were being eroded by a mix-shift tied to lower margin grocery items, freight costs, higher dairy costs, and a higher mark-down and shrink provision (up to $10 million); (iii) the defendants had knowingly tolerated very weak internal controls; (iv) the Company's inventory was artificially inflated and in fact, the Company had carried $10 million worth of deli products on its books as an asset when they were inedible due to expiration and other objective factors; (v) the Company's Southern California distribution center was in shambles; (vi) the Company's workers' compensation problems were far from over and, in fact, contrary to declining, defendants had forecast these expenses as increasing; and (vii) as a result of the above, the Company was not on track to achieve EPS for Q2 04 of $0.19-$0.20.
Murray, Frank & Sailer LLP and its predecessor firms have devoted its practice to shareholder class actions and complex commercial litigation for more than thirty years and have recovered hundreds of millions of dollars for shareholders in class actions throughout the United States.
If you purchased or acquired the common stock of 99 Cents between March 11, 2004 and June 10, 2004 inclusive and sustained damages, you may, no later than August 16, 2004, move the Court to serve as lead plaintiff of the class. Shareholders outside the United States may also join the action, regardless of which exchange was used to purchase the securities. To serve as lead plaintiff, however, you must meet certain legal requirements. You can join this class action online at http://www.murrayfrank.com/CM/NewCases/NewCases.asp. If you would like to discuss this action, this announcement, or your rights and interests, please contact plaintiff's counsel Eric J. Belfi or Aaron D. Patton of Murray, Frank & Sailer LLP.
Murray, Frank & Sailer LLP
Eric J. Belfi
Fax: (212) 682-1892
Email: [email protected]