Astec investors may receive additional information about the case by clicking the link "Submit Your Information" above.
According to the complaint, Astec designs, engineers, manufactures, markets, and finances equipment and components, including aggregate crushers, pavers, asphalt plants, wood pellet plants, and related components. Astec comprises three segments: the Infrastructure Group; the Aggregate and Mining Group; and the Energy Group. Astec’s Infrastructure Group has been involved in the wood pellet plant business since approximately 2013, when Astec began commercial production and marketing of wood pellet plants to potential customers that supply wood pellets to the utility and home-use industries. Leading up to the commencement of the Class Period, Astec held itself out as the world’s only single-source complete wood pellet plant manufacturer and touted the sale of two wood pellet plants, one in partnership with Highland Pellets, LLC, located in Arkansas, and one to Hazlehurst Pellets, located in Georgia.
The Class Period commences on July 26, 2016, when Astec reported its second quarter 2016 financial results.
The complaint alleges that, on July 25, 2017, Astec issued a release announcing its second quarter 2017 financial results, stating, in part, that while Astec’s second quarter Infrastructure Group revenues had declined by 6.1%, the group’s second quarter 2017 profit had declined by 49.7% from its second quarter 2016 levels. The release further stated that “significantly lower than expected margins on pellet plant installation were our primary disappointment for the quarter.” Following this news, the price of Astec stock dropped approximately 8% on July 25, 2017.
Then, on July 24, 2018, Astec issued a news release reporting its second quarter 2018 financial results, and providing an update regarding its pellet plant business. The release disclosed that Astec would pay $68 million and forgive an additional $7 million in receivables to exit its contract for the Highland pellet plant in Arkansas after failing to resolve issues related to pellet plant upgrades. The release further stated, that Astec exited its contractual obligations concerning the Highland wood pellet plant and redefined its wood pellet plant business. Following this news, the price of Astec stock dropped 20%, or $12.59 per share, to close at $48.21 per share on July 24, 2018.
Finally, on October 23, 2018, before the market opened, Astec announced its financial results for third quarter 2018. Astec reported a 1.2% decrease in domestic sales and a 20.2% decrease in its backlog, with the domestic backlog contracting by 28.1%, which was being dragged down by Astec’s pellet business. Following this news, the price of Astec stock dropped 25% to close at $35.51 per share on October 23, 2018.
The complaint alleges that throughout the Class Period, the defendants made false and misleading statements and/or failed to disclose adverse information regarding Astec’s business, operations and prospects, including that its wood pellet plants suffered from significant and costly problems that prevented them from running at their promised production capacity, posing a threat to Astec’s pellet plant business, its overall financial performance, and its financial outlook.
If you are a member of the class described above, you may no later than April 2, 2019 move the Court to serve as lead plaintiff of the class, if you so choose.
A lead plaintiff is a representative party that acts on behalf of other class members in directing the litigation. In order to be appointed lead plaintiff, the Court must determine that the class member’s claim is typical of the claims of other class members, and that the class member will adequately represent the class. Your ability to share in any recovery is not, however, affected by the decision whether or not to serve as a lead plaintiff. Any member of the purported class may move the court to serve as a lead plaintiff through counsel of their choice, or may choose to do nothing and remain an inactive class member.
Kessler Topaz Meltzer & Check, LLP has not filed a complaint in this matter. If you wish to discuss this action or have any questions concerning this notice or your rights or interests with respect to these matters, please contact Kessler Topaz Meltzer & Check, LLP toll free at 1-888-299-7706 or 1-610-667-7706, or via e-mail at firstname.lastname@example.org. If you would like additional information about the suit, please click on the link "Submit Your Information" above and fill out the form as promptly as possible.
Kessler Topaz Meltzer & Check, LLP
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