Milberg Weiss Announces The Filing Of A Class Action Suit Against DreamWorks Animation SKG, Inc.

12 June 2005

The law firm of Milberg Weiss Bershad & Schulman LLP announces that a class action lawsuit was filed today on behalf of purchasers of the securities of DreamWorks Animation SKG, Inc. ("DreamWorks" or the "Company") (Nasdaq: DWA) between October 28, 2004 and May 10, 2005, inclusive (the "Class Period"), seeking to pursue remedies under the Securities Exchange Act of 1934 (the "Exchange Act").

The action is pending in the United States District Court for the Central District of California against defendants DreamWorks, Ann Daly (COO), Jeffrey Katzenberg (CEO) and Kristina M. Leslie (CFO). A copy of the complaint filed in this action is available from the Court, or can be viewed on Milberg Weiss's website at: www.milbergweiss.com

The complaint alleges that defendants made materially false and misleading statements with respect to DreamWorks's sales of Shrek 2 home video units that dramatically inflated the price of DreamWorks's common shares. At the commencement of the Class Period, on October 28, 2005, in the Prospectus issued in connection with DreamWorks's Initial Public Offering, defendants claimed that they estimated the future returns of unsold home video units based on enumerated factors. Three days after the November 5, 2004 release of the Shrek 2 home video units, the Company proclaimed that the Shrek 2 release had given "retailers a fairytale beginning to the holiday season."

The complaint alleges that on January 3, 2005, defendants stated that they had already sold 37 million home video units and, thereafter, variously projected sales of 40 million and 55 million Shrek 2 home video units by the end of the first quarter of 2005. Both before and during the Class Period, defendants assured investors that they had in place procedures that enabled them to track home video unit sales and that they were capable of establishing reserves for returned home video units based on actual sales data and "their historical experience with similar types of sales."

The complaint further alleges that, in truth and in fact, defendants flooded the market with Shrek 2 home video units and reported corresponding sales and revenues for each shipped unit, all the while knowing or recklessly disregarding that: (a) the Company could not sustain the high rate of initial sales; (b) a material number of home video units were and would be returned and that, therefore, (c) defendants' statements with respect to both the present and projected volume of Shrek 2 home video unit sales were materially false and misleading.

The complaint alleges that the truth was revealed on May 10, 2005. On that date, the Company was forced to announce that Shrek 2 home video sales had fallen well short of forecasts of sales of at least 40 million, that the Company was not reporting any first-quarter revenue attributable to sales of Shrek 2 home video units and that the Company's first quarter net income would be $46 million, or $0.44 per share, on revenue of $167 million -- a far cry from Company-sponsored and endorsed analyst estimates of $0.58 per share. On this news, DreamWorks's share price tumbled 15.6%, from a closing price of $36.50 on May 10, 2005 to a low of $30.80 on May 11, 2005. Insiders, including several of the defendants named herein, profited handsomely from defendants' materially false and misleading statements during the Class Period, having sold shares of DreamWorks's stock for proceeds of more than $188,274,108.

If you bought the securities of DreamWorks between October 28, 2004 and May 10, 2005 and sustained damages you may, no later than August 1, 2005, request that the Court appoint you as lead plaintiff. A lead plaintiff is a representative party that acts on behalf of other class members in directing the litigation. In order to be appointed lead plaintiff, the Court must determine that the class member's claim is typical of the claims of other class members, and that the class member will adequately represent the class. Under certain circumstances, one or more class members may together serve as "lead plaintiff." Your ability to share in any recovery is not, however, affected by the decision whether or not to serve as a lead plaintiff. You may retain Milberg Weiss Bershad & Schulman LLP, or other counsel of your choice, to serve as your counsel in this action.

Milberg Weiss Bershad & Schulman LLP (www.milbergweiss.com) is a firm with over 100 lawyers with offices in New York City, Los Angeles, Boca Raton, Delaware, Seattle and Washington, D.C. and is active in major litigations pending in federal and state courts throughout the United States. Milberg Weiss has taken a leading role in many important actions on behalf of defrauded investors, consumers, and others for nearly 40 years. Please contact the Milberg Weiss website for more information about the firm.

Source: Business Wire

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