Robbins Arroyo LLP: KLX, Inc. (KLXI) Misled Shareholders According to a Recently Filed Class Action
Shareholder rights law firm Robbins Arroyo LLP announces
that a class action complaint was filed in the U.S. District Court for
the Southern District of Florida. The complaint alleges that officers
and directors of KLX, Inc. (NASDAQGS: KLXI) violated the Securities
Exchange Act of 1934 between March 9, 2015 and November 11, 2015, by
making materially false and misleading statements about KLX's business
prospects. KLX, together with its subsidiaries, distributes aerospace
fasteners and consumables, and provides logistics services for the
commercial, business jet, and military markets worldwide. It also
provides oilfield services and associated rental equipment across North
America as KLX's Energy Services Group ("ESG").
View this information on the law firm's Shareholder Rights Blog:
www.robbinsarroyo.com/shareholders-rights-blog/klx-inc
KLX Accused of Misrepresenting the Value of its Assets
According to the complaint, KLX misrepresented the value of the
company’s assets, including the value of the identifiable tangible
assets and goodwill associated with ESG, along with its policies and
methodology related to the calculation of risk, goodwill, and asset
impairment. Specifically, on March 6, 2015, KLX filed a Form 10-K with
the U.S. Securities and Exchange Commission, stating that the net value
of its goodwill was $1,069.8 million as of December 31, 2013, and
$1,328.7 million as of December 31, 2014. In its 10-Q filed on May 28,
2015, the company represented the value of its goodwill to be $1,286.5
million as of January 31, 2015, and $1,284.8 million as of April 31,
2015.
Then, on August 25, 2015, KLX held a conference call to discuss their
second quarter 2015 results, acknowledging that ESG's financial
performance was negatively impacted by a 60% decrease in the price of
oil, as well as pricing pressures throughout the energy services sector.
Despite KLX's acknowledgement of the deterioration in the oil market and
its effects on the company's business, it continuously represented the
value of the goodwill associated with the ESG assets as worth more than
$300 million.
On November 12, 2015, KLX announced that as a result of its interim
asset impairment test, it expected to recognize a non-cash, after-tax
asset impairment charge of approximately $435 million related to ESG,
citing the downturn in the oil and gas industry. On this news, KLX's
stock plunged by nearly 18%, from $39.00 per share on November 11, 2015,
to close at $32.11 on November 12, 2015.
KLX Shareholders Have Legal Options
Concerned shareholders who would like more information about their
rights and potential remedies can contact attorney Darnell R. Donahue at
(800) 350-6003, DDonahue@robbinsarroyo.com,
or via the shareholder
information form on the firm's website.
Robbins Arroyo LLP is a nationally recognized leader in shareholder
rights law. The firm represents individual and institutional investors
in shareholder derivative and securities class action lawsuits, and has
helped its clients realize more than $1 billion of value for themselves
and the companies in which they have invested.
Attorney Advertising. Past results do not guarantee a similar outcome.
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