| Company: | Central European Distribution Corporation |
| Ticker Symbol: | CEDC |
| Class Period: | Aug-5-10 to Feb-28-11 |
| Date Filed: | Oct-25-11 |
| Lead Plaintiff Deadline: | Dec-24-11 |
| Court: | District of New Jersey |
| Allegations: | |
CEDC, together with its subsidiaries, produces, imports, and distributes alcoholic beverages in Poland, Hungary, and the Russian Federation.
The Complaint names CEDC and certain of the Company's directors and officers as defendants. The Complaint alleges that during the Class Period, defendants made materially false and misleading statements regarding the Company's financial health. Specifically, defendants failed to disclose and/or misrepresented that: (1) the Company had double digit declines in its vodka portfolio and its loss of market share in Poland was growing steeper as discounters were taking shares; (2) the severity of the its market share declines required that CEDC take an impairment charge, which defendants caused CEDC to delay recording on a timely basis; and (3) the launch of its new product, Zubrowka Biala, with major market spending in the form of rebates had an adverse effect on gross margin and impacted the channel mix in the market. As a result, defendants lacked a reasonable basis for their positive statements about the Company, its prospects and growth.
On March 1, 2011, CEDC issued a press release wherein it announced its full year and fourth quarter 2010 financial results. CEDC announced a net loss from continuing operations on a U.S. GAAP basis for the year of $92.9 million or $1.32 per fully diluted share, as compared to net profit of $72.7 million or $1.35 per fully diluted share, for the same period in 2009. Following the full year earnings announcement, the Company held a conference call with analysts and investors, wherein defendants disclosed for the first time an excise tax issue relating to CEDC's production in Russia, which adversely impacted the Company's production in mid-November, CEDC's "key selling period."
In addition, CEDC also revealed that its Polish lenders have waived a breach of consolidated coverage ratio and net leverage ratio covenants for the period ending December 31, and has amended the ratios for the period ending March 31, 2011. In return for the waiver, CEDC will have to pay the lenders a fee of 3.3 million zlotys. The amount under the overdraft facilities included in the credit facility will also be reduced and CEDC will have to pay higher interest rates.
In response to its surprising earnings announcement, CEDC's shares reacted by falling more than 37%, to close at $14.33 per share on March 1, 2011, on very heavy trading volume.
If you acquired the securities of the defendants during the Class Period you may, no later than the Lead Plaintiff Deadline shown above, request that the Court appoint you as lead plaintiff through counsel of your choice. You may also choose to remain an absent class member. A lead plaintiff must meet certain requirements.
