|
Everyone likes to go to the movies, and many people find
IMAX movies entertaining. Lately, though, investors in
Canadian-based IMAX (which trades on the Toronto Stock
Exchange and NASDAQ), haven't been amused or entertained
by recent disclosures about the Company.
As you are probably aware, IMAX, through its wholly owned
subsidiaries, operates as an entertainment technology company,
specializing in three-dimensional (3D) film presentations.
It primarily engages in the design, manufacture, sale, and
lease of projection systems based on patented technology for
large-format, 15-perforation film frame, 70mm format
theaters, including commercial theaters, museums and science
centers, and destination entertainment sites.
Last week, IMAX disclosed news that stunned its
shareholders. Specifically, on August 9, 2006, after the close
of trading, IMAX disclosed, among other things, that the
Company is 'in the process of responding to an informal inquiry
from the U.S. Securities and Exchange Commission regarding
the Company's timing of revenue recognition, including its
application of multiple element arrangement accounting in its
revenue recognition for theatre systems.' The Company also
disclosed that it had identified a material weakness in the
internal controls surrounding the analysis and recording of
a complex film accounting transaction in the second quarter
of 2006.
The market reaction was swift and harsh. On August 10, 2006,
in heavy trading IMAX shares declined $3.93 per share or 41%,
from $9.63 at the close of trading on August 9, 2006, to close
at $5.70 per share, at the close of trading on August 10, 2006.
It appears that IMAX recognized revenue in the fourth quarter
of 2005 (ended 12/31/05) on 10 theatre installations in theatres
which did not open in that quarter. It appears that revenue
associated with the 'screen element of the system' was deferred
until the final screen was installed, but that the value associated
with the 'elements other than the screen elements' of those
system installations was recognized in the fourth quarter.
In addition, the Company stated that it identified an internal
control deficiency that resulted in a negative adjustment of
$0.8 million to the Company's Consolidated Statement of
Operations for the three months ended June 30, 2006. This
$0.8 million in film revenue is likely to instead be recognized
in substantial part in the third quarter of 2006.
It appears that investors who purchased IMAX between
March 9, 2006 and August 9, 2006 are affected.
If you are an affected IMAX investor or an affected investor
in any of the companies listed below, you may wish to contact
us at 877.511.4717 to discuss your options.
Joseph A. Bank (NASDAQ: JOSB). On June 8, 2006, before
the opening of trading, the Company disclosed its sales and
earnings for the first quarter of the fiscal year ending
February 3, 2007. The Company revealed, among other
things, that: (1) its year over year net income declined
approximately 12%; and (2) its gross profit declined
primarily as a result of customers favoring 'fall merchandise'
over its 'year-round core merchandise'. The Company
also issued financial guidance for fiscal 2006 that was up to
20% below analyst estimates.
This announcement stunned the market and JOSB dropped
30% in one day. The Company's CEO had previously sold
$35 million worth of stock. It appears that investors who
purchased JOSB between January 5, 2006 and June 7, 2006,
are affected.
The Shaw Group Inc. (NYSE: SGR). The Company announced
before the opening of trading on July 10, 2006, that its
management concluded that two errors occurred in the
preparation of its second quarter financial statements
(ended February 28, 2006) which require a restatement of
the second quarter results. As a result, its stock dropped
14% on heavier than usual volume. It appears that investors
who purchased Shaw between April 4, 2006 and July 7, 2006,
are affected.
Herley Industries (NASDAQ: HRLY). Herley Industries
disclosed earlier this summer that the U.S. Attorney's office
in the E.D. of Pennsylvania indicted the Company and its
chairman on charges of fraud. Investors who purchased
between October 1, 2001 and June 14, 2006, are affected.
Finally, the backdated stock option scandal continues to grow
and, in a number of instances, investors in affected companies
have been negatively affected. You may want to check your
portfolio for the following companies: Affiliated Computer
Services Inc. (NYSE: ACS), Altera Corp (NASDAQ: ALTR),
CNET Networks (NASDAQ: CNET), F5 Networks Inc.
(NASDAQ: FFIV), M-Systems Flash Disk Pioneers Ltd
(NASDAQ: FLSH), Power Integrations Inc. (NASDAQ: POWI),
Quest Software Inc. (NASDAQ: QSFT), Rambus Inc.
(NASDAQ: RMBS), SafeNet Inc. (NASDAQ: SFNT) and
Semtech (NASDAQ: SMTC).
If you are an affected investor in any of the companies with
accounting 'issues' or any of the companies involved in the
backdated options scandal, you may wish to contact us
info@securitiessleuth.com or 877.511.4717 to discuss
your options.
Now with respect to settled cases. If you are an affected
investor - you purchased any of these stocks during the
relevant class period, you may wish to contact the claims
administrator to obtain additional information. Remember,
if you don't submit your claim form, you won't receive your
share of any settlement.
Symbol Technology, Inc. (SBL)
Class Period: March 2, 2000 to October 17, 2002
Claims Deadline: October 31, 2006
Claims Administrator: A.B. Data
Tellium, Inc. (TELM)
Class Period: May 17, 2001 to July 1, 2002
Claims Deadline: October 18, 2006
Claims Administrator: Analytics
Information regarding other recent settled cases, including
the cases listed below can be found at www.securitiessleuth.com.
Imperial Chemical Industries PLC (ICI)
Vistacare, Inc. (VSTA)
ARM Financial Group (ARMGQ)
Carreker Corp. (CANI)
Loewen Group Inc. (LWN)
Razorfish, Inc. (RAZF)
Again you should contact the claims administrator (rather than us).
However, if you are an affected investor in any of the companies
under investigation, you many wish to contact us so that you
can consider your options.
Likewise, if you happen to be aware of corporate restatements
or other financial fraud -- especially if you're a victim --
you're encouraged to contribute to the Sleuth by giving your
own tip-offs at www.securitiessleuth.com or by e-mailing
info@securitiessleuth.com. You can also call Mark McNair
at 877-511-4717. If you have a friend or colleague you
think would benefit from The Sleuth, please pass along
this issue and ask them to sign up at
www.cartville.com/app/join.asp?MerchantID=47994.
Warmest regards,
Mark McNair
|
