Opinion ID: 691552
Heading Depth: 4
Heading Rank: 1

Heading: The firmly on its 1993 plan statement

Text: 32 As discussed above in the section on statements predicting future performance, Legent issued a press release on January 27th stating that its first quarter performance indicated it was firmly on its 1993 plan for revenue and earnings growth. (J.A. 2613.) Appellants argue that the January 27th statement was an actionable fraudulent statement of past performance because it referred to Legent's performance to date, and evidence showed that Legent's first quarter performance did not coincide with its budget estimates. 16 Appellants further contend that Legent management used the terms plan and budget interchangeably, and thus a jury could infer that when Burton said Legent was on plan he meant that it was on budget. 17 Therefore, if Legent's actual first quarter revenues and earnings growth figures did not meet the budget, Appellants argue that Legent must have misled its investors by stating it was on plan. Even if we assume, however, that the plan referred to on January 27th was actually Legent's budget, Appellants presented no evidence that Legent's overall performance for the first quarter did not meet budget predictions. 33 Appellants support their argument by stating that, because the earnings and revenues from Goal's thirteenth month were not included in the 1993 budget, the roll-over of these funds was not part of the plan referred to in the January 27th press release. They contend that Legent was not on plan without the Goal additions. For example, Appellants point out that without Goal's revenues, first quarter new license revenues of $57.7 million was 11% short of the budgeted estimate of $64.6 million. 18 34 However, Legent informed analysts, and therefore the entire market, that earnings and revenues from the Goal merger were incorporated into Legent's actual first quarter performance figures. 19 During the January 27th conference call, Burton told analysts that the actual first quarter figures included $9 million in revenues and $0.05 in earnings per share from Goal's thirteenth month. The budget predicted first quarter earnings per share to be $0.49; actual first quarter earnings per share without Goal's thirteenth month earnings were $0.49 and with Goal's earnings were $0.54. The budget predicted total first quarter revenues to be $115 million; actual first quarter revenues without the addition of Goal's thirteenth month was $107 million, but with the addition was $116.7 million. 20 Thus, Legent's January 27th statement that it was on plan was true regarding its past performance for first quarter revenue growth and earnings, and, therefore, could not be fraudulent. 35 Thus, regardless of whether the plan referred to in the January 27th press release was Legent's 1993 budget or, as the district court determined, an overall business plan, Bentley, 849 F.Supp. at 432, there simply is no evidence that the statement was false as it pertained to Legent's past performance. Because there was no evidence from which a reasonable jury could conclude that the firmly on plan statement was fraudulent, we affirm on this issue.