According to the Company’s FORM 10-Q for the quarterly period ended June 29, 2003, on June 16, 2003, the Company announced that the United States Court of Appeals for the Fourth Circuit affirmed the decision of the United States District Court for the District of Maryland to dismiss with prejudice the securities class action litigation filed in June 2001 against the Company and two of its executive officers. The litigation alleged that certain statements and information contained in the Company’s press releases and in the periodic reports filed by it with the Securities and Exchange Commission contained materially false and misleading information in violation of the federal securities laws. Both the District Court and the Court of Appeals rejected this contention.
As previously reported by the Company’ FORM 10-K for the fiscal year ended December 31, 2002, the Company filed a motion to dismiss the complaint. In response, the plaintiff filed an amended complaint which mooted the Company's motion to dismiss. The Company then filed a motion to dismiss the amended complaint, which the plaintiff opposed. In orders dated April 26, 2002, the District Court granted the motion to dismiss in its entirety and entered judgment in favor of the Company and the executive officers. On or about May 24, 2002, the plaintiff filed a notice of appeal. The appeal is currently pending in the United States Court of Appeals for the Fourth Circuit. The parties have completed their briefing and oral arguments are expected to be heard in May 2003.
The original class action law suit was filed against Duratek, Inc. The complaint accuses Duratek and two of its top officers with inflating the Company’s stock price by issuing false and misleading financial statements for 1999 and the first three quarters of 2000. On March 14, 2001, Duratek admitted that additional burial and transportation costs would adversely affect the Company’s fourth quarter and fiscal year 2000 financial results as well as the financial results for the first quarter of 2001. Moreover, the Company announced that a review of Duratek’s commercial waste processing operations had indicated “potentially negative variances in certain waste processing accounts.” On April 18, 2001, the Company further announced that it was restating its previously reported consolidated financial results for 1999 and the first three quarters of 2000 to reflect a reconciliation that had not been previously been performed.