NEW YORK, June 11, 2024 (GLOBE NEWSWIRE) -- Bragar Eagel & Squire, P.C., a nationally recognized shareholder rights law firm, reminds investors that class actions have been commenced on behalf of stockholders of Enphase Energy, Inc. (NASDAQ: ENPH), FAT Brands Inc. (NASDAQ: FAT), and The Scotts Miracle-Gro Company (NYSE: SMG). Stockholders have until the deadlines below to petition the court to serve as lead plaintiff. Additional information about each case can be found at the link provided.
Enphase Energy, Inc. (NASDAQ: ENPH)
Class Period: February 7, 2023 - April 25, 2023
Lead Plaintiff Deadline: July 29, 2024
According to the complaint, defendants created the false impression that they possessed reliable information pertaining to the Company’s projected revenue outlook and anticipated growth while also minimizing risk from seasonality and macroeconomic fluctuations. In truth, Enphase had been experiencing a decrease in battery shipments to Europe and California, slowdown in battery deployment and adoption, longer transition period with NEM 3.0, and slower output of inverters manufactured by the new US base manufacturing lines. Defendants misled investors by providing the public with materially flawed revenue outlook for fiscal 2023.
Plaintiff alleges that on April 25, 2023, Enphase announced its first quarter earnings, stating revenue in the United States had decreased by approximately 9% attributing it to macroeconomic conditions. Additionally, defendants put out a weak second quarter outlook for 2023 where revenue was estimated to be within the range of $700 million to $750 million. On this news, the price of Enphase’s common stock declined dramatically. From a closing market price of $220.60 per share on April 25, 2023, Enphase’s stock price fell to $163.83 per share on April 26, 2023, a decline of nearly 26% in the span of just a single day.
For more information on the Enphase class action go to: https://bespc.com/cases/ENPH
FAT Brands Inc. (NASDAQ: FAT)
Class Period: March 24, 2022 - May 10, 2024
Lead Plaintiff Deadline: August 6, 2024
According to the lawsuit, defendants throughout the Class Period made materially false and/or misleading statements and/or failed to disclose that: (1) defendants failed to disclose that Andrew A. Wiederhorn, the Company’s Chairman and former CEO, had received improper payments from the Company, exposing FAT Brands to criminal liability; and (2) as a result, defendants’ statements about its business, operations, and prospects, were materially false and misleading and/or lacked a reasonable basis at all times.
For more information on the Fat Brands class action go to: https://bespc.com/cases/FAT
The Scotts Miracle-Gro Company (NYSE: SMG)
Class Period: November 3, 2021 - August 1, 2023
Lead Plaintiff Deadline: August 2, 2024
Scotts produces various lawn, garden, and agricultural products for both consumer and professional purposes. It is also the world’s largest marketer of branded consumer products for lawn and garden care. In 2014, Scotts formed a wholly owned subsidiary, The Hawthorne Gardening Company, which focuses on hydroponics for the emerging cannabis growing market. The Company sells a vast majority of its products through third-party distributors.
During the Class Period, Scotts was highly leveraged, with its senior secured credit facilities containing various restrictive covenants and cross-default provisions that require the Company maintain specific financial ratios. A breach of any of these covenants could result in a default, enabling the Company’s lenders to declare all outstanding indebtedness immediately due and payable. A key covenant required that Scotts maintain a debt-to-EBITDA ratio under 6.25. In 2020 and 2021, prior to the beginning of the Class Period, Scotts had missed out on millions of dollars in sales due to a lack of inventory as it faced surging demand. In response to this strong demand, Scotts significantly increased its inventory.
The complaint alleges that, throughout the Class Period, Defendants made numerous materially false and misleading statements and omissions concerning the Company’s inventory levels, debt covenant compliance, and financial performance. Specifically, Defendants repeatedly assured investors that the Company’s inventory levels were appropriate, while attributing strong sales to “selling through high-cost inventory,” which resulted in “peak selling” and “record” shipments. Defendants also repeatedly assuaged investors’ concerns about the Company’s debt, stating that they were “optimistic we will remain within the bounds of our bank covenants” and “[did] not see leverage compliance issues going forward.” As a result of these misrepresentations, Scotts common stock traded at artificially inflated prices during the Class Period.
The complaint further alleges that in reality, Scotts’ executives engaged in a scheme to saturate the Company’s sales channels with more inventory than could be sold to end users. This scheme enabled Scotts to book as revenue the sales to its distributors and maintain earnings to debt ratios that just barely exceeded those required by its debt covenants.
The complaint further alleges that the truth began to emerge on June 8, 2022, when Scotts revealed that replenishment orders from its U.S. retailers were $300 million below target in the month of May alone. The Company also cut its 2022 full-year earnings guidance by roughly half and announced plans to take on additional debt to cover restructuring charges as it attempted to cut costs. These disclosures came mere weeks after the Company promised that it was “tracking to do even better” than its guidance. However, throughout the rest of the Class Period, Defendants continued to downplay the Company’s inventory and debt compliance issues.
Then, on August 2, 2023, Scotts revealed that quarterly sales for its fiscal third quarter had declined by 6% and gross margins fell by 420 basis points. The Company also slashed fiscal year EBITDA guidance by a staggering 25% and announced it had to take a $20 million write down for “pandemic driven excess inventories.” Scotts further disclosed that it had to modify its debt covenants from 6.25 times debt-to-EBITDA ratio to 7.00 times debt-to-EBITDA ratio. As a result of these disclosures, the price of Scotts common stock declined precipitously.
For more information on the Scotts class action go to: https://bespc.com/cases/SMG
About Bragar Eagel & Squire, P.C.:
Bragar Eagel & Squire, P.C. is a nationally recognized law firm with offices in New York, California, and South Carolina. The firm represents individual and institutional investors in commercial, securities, derivative, and other complex litigation in state and federal courts across the country. For more information about the firm, please visit www.bespc.com. Attorney advertising. Prior results do not guarantee similar outcomes.
Contact Information:
Bragar Eagel & Squire, P.C.
Brandon Walker, Esq.
Marion Passmore, Esq.
(212) 355-4648
investigations@bespc.com
www.bespc.com
