Opinion ID: 786598
Heading Depth: 3
Heading Rank: 5

Heading: Statements Made During the Class Period

Text: 18
19 The class period began on April 28, 1999, when Alpharma announced results for the first quarter of 1999. The company issued a press release which highlighted the marked improvement in revenues, net income, and earnings per share compared to the first quarter of 1998. Because a report issued by a Wall Street analyst following the announcement of first quarter results mentioned increased sales in Latin America and Southeast Asia, plaintiffs allege that defendants were aware that the market was attributing Alpharma's apparent success to international operations, including specifically Latin America. 20 The company filed its Form 10-Q for the first quarter of 1999 with the Securities and Exchange Commission (SEC) on May 12, 1999. 4 This form, signed by vice president and CFO Smith on behalf of himself and the company, contained the same inflated numbers as the April 28 press release. These numbers were revenue of $156,759,000, net income of $7,436,000, and earnings per share of twenty-seven cents. In its October 30, 2000, restatement, Alpharma lowered revenue by $810,000, net income by $238,000, and earnings per share by one cent. 21
22 Alpharma announced results for the second quarter of 1999 on July 28, 1999. Comparing results to the second quarter of 1998, the accompanying press release highlighted increases in revenue, net income, and earnings per share. The earnings per share number exceeded Wall Street's consensus estimate by one cent, thereby continuing Alpharma's streak of ten consecutive quarters of exceeding analysts' expectations. The value of the company's stock increased by approximately twelve percent following the issuance of second quarter results. 23 The company filed its Form 10-Q for the second quarter of 1999 with the SEC on August 9, 1999. This form, signed by Smith on behalf of himself and the company, contained the same inflated numbers as the July 28 press release. These numbers were revenue of $163,839,000, net income of $7,772,000, and earnings per share of twenty-eight cents. In the October 30, 2000, restatement, Alpharma lowered revenue by $1,622,000, net income by $404,000, and earnings per share by two cents. The consensus estimate for the second quarter of 1999 had called for earnings per share of twenty-seven cents. Thus, Alpharma would have missed this estimate by one cent had its results been reported correctly in the first instance. 24
25 Alpharma announced its third quarter results on October 25, 1999. Comparing results to the third quarter of 1998, the accompanying press release highlighted increases in revenue, net income, and earnings per share. The earnings per share number exceeded Wall Street's consensus estimate by two cents, extending Alpharma's streak of consensus-beating quarters to eleven. The value of the company's stock increased by approximately thirteen percent following the issuance of third quarter results. 26 The company filed its Form 10-Q for the third quarter of 1999 with the SEC on November 2, 1999. This form, signed by Smith on behalf of himself and the company, contained the same inflated numbers as the October 25 press release. These numbers were revenue of $203,131,000, net income of $11,263,000, and earnings per share of thirty-eight cents. In its October 30, 2000 restatement, Alpharma lowered revenue by $3,302,000, net income by $890,000, and earnings per share by three cents. As with the second quarter, Alpharma would have missed analysts' earnings estimates absent the overstatement of revenue. 27
28 The company's fourth quarter and full year results for 1999 were issued on February 23, 2000. The accompanying press release highlighted both quarterly and yearly growth in revenue, net income, and earnings per share. The earnings per share number exceeded expectations for the twelfth consecutive quarter. Highlighting this fact, Sissener issued the following statement: 29 Alpharma has now achieved 12 consecutive quarters of growth above the goals we have set. I am pleased with these exceptional results, which I believe reflect the success of the focused growth strategies we have established and of the efforts of our employees all around the world. The record results are particularly gratifying because they were achieved as we continued to make and successfully absorb significant strategic acquisitions that are an integral part of our long-term growth strategy. 30 Similarly, Wiik stated that [c]learly, Alpharma's established strategies for growth are working. By continuing to execute, we look for this profitable growth to continue in 2000 and beyond. 31 The company filed its Form 10-K for the fourth quarter and full year 1999 with the SEC on March 29, 2000. This form, signed by Smith, Sissener, and Wiik on behalf of themselves and the company, contained the same inflated numbers as the February 23 press release. The fourth quarter numbers were revenue of $218,447,000, net income of $13,080,000, and earnings per share of forty-one cents. In its October 30, 2000, restatement, Alpharma lowered fourth quarter revenue by $3,999,000, net income by $1,047,000, and earnings per share by three cents. The full year numbers for 1999 were similarly lowered following restatement. Revenue of $742,176,000, net income of $39,551,000, and earnings per share of $1.34 were decreased by $9,733,000, $2,579,000, and nine cents, respectively. The 10-K for 1999 further stated that ` revenue is recognized upon shipment of products to customers. ' 32
33 Alpharma announced results for the first quarter of 2000 on April 26, 2000. As before, the company highlighted increases in revenue, net income, and earnings per share compared to the first quarter of 1999. In connection with this announcement, Wiik stated that [t]hese record first quarter results reflect the continued successful implementation of our growth strategies to build the global Alpharma enterprise. We are experiencing strong top line growth due to both new product introductions and complimentary acquisitions ... we expect continued strong revenue growth throughout 2000. The earnings per share number exceeded Wall Street's consensus estimate by two cents, extending Alpharma's streak of consensus-beating quarters to thirteen. Between April 25 and May 1, the value of Alpharma's stock increased by nine percent. 34 The company filed its Form 10-Q for the first quarter of 2000 with the SEC on May 8, 2000. This form, signed by Smith on behalf of himself and the company, contained the same inflated numbers as the April 26 press release. These numbers were revenue of $118,280,000, net income of $11,114,000, and earnings per share of thirty-five cents. Following restatement, revenue was lowered by $2,202,000, net income by $749,000, and earnings per share by two cents. As in previous quarters, Alpharma would have missed analysts' earnings estimates absent the overstatement of revenue. 35
36 Alpharma announced its results for the second quarter of 2000 on July 31, 2000. As before, the company highlighted increases in revenue, net income, and earnings per share compared to the second quarter of 1999. On August 1, the value of Alpharma's stock rose ten percent to $71.94, the highest close reached at any time during the class period. 37