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Orbital develops and produces aerospace, defense, and aviation-related products for the U.S. Government, allied nations, prime contractors, and other customers in the United States and internationally. The Company was formed through a February 2015 merger between Orbital Sciences Corporation and Alliant Techsystems Inc. In September 2012, Orbital entered into a $2.3 billion long-term contract (the "Contract") with the U.S. Army to manufacture and supply small caliber ammunition at the U.S. Army's Lake City Army Ammunition Plant.
The Complaint alleges that throughout the Class Period, Defendants made materially false and/or misleading statements, as well as failed to disclose material adverse facts about the Company's business, operations, and prospects. Specifically, Defendants made false and/or misleading statements and/or failed to disclose that: (i) Orbital lacked effective control over financial reporting; (ii) as a result, the Company failed to record an anticipated loss on the Contract after the loss became evident in 2015, as required by generally accepted accounting principles; and (iii) as a result of the foregoing, Orbital's public statements were materially false and misleading at all relevant times.
On August 10, 2016, pre-market, Orbital announced that the Company would miss its Securities and Exchange Commission Form 10-Q filing deadline for its most recent quarter and that "the Company's previously issued financial statements for the fiscal year ended March 31, 2015 ("fiscal 2015"), the nine-month transition period ended December 31, 2015 ("2015 transition period"), the quarters in fiscal 2015 and the 2015 transition period, and the quarter ended April 3, 2016 . . . should no longer be relied upon" as a results of misstatements relating primarily to the Contract. The Company advised investors that "[a]fter considering the misstatements . . . the Company believes that the Contract will result in a net loss over its 10-year term." The Company further stated these issues "indicate the existence of one or more material weaknesses in its internal control over financial reporting."
On this news, Orbital's share price fell $17.98, or 20.25%, to close at $70.79 on August 10, 2016.
The Pomerantz Firm, with offices in New York, Chicago, Florida, and Los Angeles, is acknowledged as one of the premier firms in the areas of corporate, securities, and antitrust class litigation. Founded by the late Abraham L. Pomerantz, known as the dean of the class action bar, the Pomerantz Firm pioneered the field of securities class actions. Today, more than 80 years later, the Pomerantz Firm continues in the tradition he established, fighting for the rights of the victims of securities fraud, breaches of fiduciary duty, and corporate misconduct. The Firm has recovered numerous multimillion-dollar damages awards on behalf of class members. See www.pomerantzlaw.com
Robert S. Willoughby
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SOURCE Pomerantz LLP