A class action lawsuit was filed against Spirit AeroSystems Holdings, Inc. and certain of its officers in U.S. District Court, District of Kansas on behalf of a class that acquired Spirit AeroSystems stock between May 5, 2011 and October 24, 2012 (the “Class Period”).
The complaint accuses Spirit AeroSystems of filing financial statements with the SEC that contained 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) the Company was having difficulties in executing its diversification and growth strategy as it expanded its customer-base, manufacturing sites, and product design capabilities, while managing multiple development programs with significant design changes and schedule delays; (ii) the Company lacked adequate internal and financial controls, specifically adequate controls over cost overruns on its 787 program, G650 Wing program, BR725 program and the G280 Wing program; and (iii) as a result of the above, the Company’s financial statements were materially false and misleading at all relevant times.
On October 25, 2012, Spirit AeroSystems disclosed for the first time that it expected to record charges against 2012 earnings and to future years’ earnings, totaling $590 million. The company attributed the charges to significant operational problems across multiple product lines. Consequently, analysts suspected that defendants misled investors regarding the profitability of the 787 program, sustained free cash flows and the fact that there was an impending write-down which accounted for nearly 20% of the company’s contractual revenues. Spirit AeroSystems stock declined $6.55 per share or 30%, to close at $15.11 per share on this news.
Spirit AeroSystems designs and manufactures aerostructures fuselages, propulsion systems and wing systems for commercial and military aircrafts for its customers including Boeing and Airbus.