Pomerantz LLP announces that a class action lawsuit has been filed against Adient plc ("Adient or the "Company") (NYSE: ADNT) and certain of its officers. The class action, filed in United StatesDistrict Court, Southern District of New York, and indexed under 18-cv-09630, is on behalf of a class consisting of all persons and entities, other than Defendants and their affiliates, who purchased or otherwise acquired Adient securities between October 31, 2016 and June 11, 2018, both dates inclusive (the "Class Period"), seeking to recover damages caused by Defendants' violations of the federal securities laws and to pursue remedies under Sections 10(b) and 20(a) of the Securities Exchange Act of 1934 (the "Exchange Act") and Rule 10b-5 promulgated thereunder, against the Company and certain of its top officials.
Adient is an Irish corporation headquartered in Dublin. The Company was formed in late October 2016, when Johnson Controls International plc ("Johnson") completed the spinoff of its automotive seating and interiors business. Adient has 85,000 employees and operates 238 manufacturing/assembly plants in 34 countries worldwide. The Company designs, engineers, and manufactures automotive seating for all vehicle classes and all major original equipment manufacturers ("OEMs") and claims to be the largest global automotive seating supplier in the world. Nearly half of its annual revenues derived from the sale of metal components used in seat frames produced by its seat structures and mechanisms ("SS&M") group, also called the metals group.
From the date of its formation, Adient and certain of its senior executives highlighted improvements in the efficiency of the Company's capital-intensive metals business (a/k/a the SS&M business) as a key driver of its success. For example, Defendants repeatedly emphasized to investors that the Company was "solidly on track" to deliver 200 basis point margin expansion by 2020, a feat that depended in large part on operational and financial improvements in its core SS&M business.
Throughout the Class Period, Defendants made materially false and misleading statements regarding the Company's business, operational and compliance policies. Specifically, Defendants made false and/or misleading statements and/or failed to disclose that: (i) Adient's core SS&M business faced significant operational problems such that the repeatedly touted 200-basis-point margin expansion was not "on track"; and (ii) as a result, Adient's public statements were materially false and misleading at all relevant times.
The truth first began to emerge during a Deutsche Bank Global Auto Industry Conference held on January 17, 2018, where Defendants made several startling disclosures indicating Adient was not "solidly on track" to achieve the previously-touted 200 basis point margin expansion.
This news drove the price of Adient shares down $8.03, or approximately 9.8%, to close at $74.15 on January 18, 2018.
On January 29, 2018, Defendants held Adient's Q1 2018 earnings conference call with investors. On the call, Defendants cautioned and made certain statements calling the Company's ability to achieve its 200-basis point margin expansion into question.
This news drove the price of Adient shares down $5.53, or approximately 7.6%, to close at $66.77 that day.
Then, on May 3, 2018, Defendants announced Adient's Q2 2018 financial results in a Form 8-K filing with the SEC. This 8-K revealed in part that Defendants recorded a net $279 million impairment charge related to the Company's SS&M segment.
This news drove the price of Adient shares down $6.14, or approximately 10%, to close at $55.84 that day.
Finally, on June 11, 2018, Defendants revealed that Defendant Bruce McDonald ("McDonald") had stepped down from his role as Chairman and Chief Executive Officer ("CEO") effective immediately and slashed Adient's earnings guidance.
This news drove the price of Adient shares down $8.88, or approximately 15.6%, to close at $48.10 that day.