According to the law firm press release, QSI develops and sells practice management software to medical and dental providers, including software related to scheduling and billing. The Complaint alleges that throughout the Class Period, QSI portrayed itself as a high-growth company, repeatedly touting its record growth in revenue and earnings, and robust pipeline of business that contained hundreds of millions of dollars of software sales that the Company sought to realize within the next six to eight months. QSI also repeatedly issued bullish annual guidance to investors, stating that it was confident that it would achieve annual growth rates in earnings per share (“EPS”) well in excess of 20%.
It is alleged that in truth, Defendants knew or recklessly disregarded that QSI’s growth was materially slowing. Indeed, throughout the Class Period, Defendants were privy to real-time data concerning the revenues and earnings of each of QSI’s operating divisions, and QSI’s guidance was continuously updated based on that real-time data. Accordingly, Defendants knew or recklessly disregarded that the fiscal 2012 guidance calling for earnings growth of as much as 33% was directly contradicted by the reality of QSI’s performance.
On May 7, 2012, the Company announced that it was experiencing delays in closing sales, which raised investor concerns about the Company’s fiscal 2012 performance. As a result of these concerns, QSI’s stock price declined 17% over the next two trading days, falling from a closing price of $36.99 on May 6 to a closing price of $30.99 on May 8, on very high volume.
A few days later, on May 10, 2012, QSI revealed that, contrary to its prior statements touting its continued record growth, its ability to generate earnings had materially slowed in fiscal 2012. Specifically, QSI announced that it would report EPS of between $1.27 and $1.30 for fiscal 2012 – or as much as 36% below its guidance. Following this announcement, QSI’s stock price immediately declined 6%, falling from $32.09 to $30.12 on May 10, on extremely high volume.
Then, before the market opened on July 26, 2012, Defendants announced that the Company’s EPS had materially declined from the year-ago quarter, and withdrew QSI’s highly favorable fiscal 2013 guidance. That disclosure caused the price of QSI stock to decline from $23.63 per share to $15.95 per share on July 26, 2012.
On February 4, 2014, the Court issued an Order appointing Lead Plaintiffs and approving the selection of Lead Counsel. Lead Plaintiffs filed an Amended Complaint on April 7.
On October 20, 2014, the Court issued an Order granting Defendants' Motion to Dismiss. Plaintiffs' Motion for Reconsideration of this Order was denied by the court on January 5, 2015. On January 30, Plaintiffs filed a Notice appealing the Orders of the District Court granting Defendants' Motion to Dismiss and denying Plaintiff's Motion for Reconsideration.
On July 28, 2017, the Court of Appeals issued an opinion reversing the decision of the District Court and remanding for proceedings consistent with their opinion. On October 10, the Court of appeals filed a formal mandate. On October 11, the District Court issued an Order reopening the case.
On July 16, 2018, the parties entered into a Stipulation of Settlement. The Settlement was preliminarily approved on July 30.