Starrett L S Co – ‘8-K’ for 9/1/04 – EX-99

On:  Wednesday, 9/1/04, at 12:08pm ET   ·   For:  9/1/04   ·   Accession #:  93676-4-33   ·   File #:  1-00367

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Current Report   —   Form 8-K
Filing Table of Contents

Document/Exhibit                   Description                      Pages   Size 

 1: 8-K         Cover                                                  2±     9K 
 2: EX-99       Press Release                                          2±     9K 

EX-99   —   Press Release

THE L.S. STARRETT COMPANY                                                       
121 Crescent Street                                                             
Athol, Massachusetts  01331                                                     

FOR IMMEDIATE RELEASE                                                           

ATHOL,Mass.-September 1, 2004-The L.S. Starrett Company announced today that    
it has reached a settlement with the U.S. Department of Justice which will      
result in the termination of the government's two-year investigation of the     
Company's CMM Division located in Mount Airy, North Carolina and the            
dismissal with prejudice of the false claims allegations in the qui tam         
complaint brought by a former independent contractor and former employee of     
the Company that gave rise to the investigation.  Under the terms of the        
settlement, the Company will pay the Government $500,000, and the Company       
and its officers, directors, employees and shareholders will be released        
from any causes of action relating to the false claims allegations in the       
complaint that were the subject of the Government's investigation. In           
anticipation of a resolution of this matter, the Company recognized the         
costs associated with this settlement in the fourth quarter of fiscal 2004,     
which ended on June 26, 2004.                                                   

The Company cooperated with the Government throughout its investigation, and    
has agreed to settle this matter solely to avoid the delay, expense,            
inconvenience and uncertainty of protracted litigation.  In this regard, the    
Company denies and contests the allegations made in the complaint and denies    
any wrongdoing in connection with those allegations.  The Company notes that    
the Government itself, notwithstanding two years of investigation, only         
intervened in this action for the purposes of settlement.  In addition, the     
United States Attorney for the District of Massachusetts in early August        
informed the Company in writing that based on the facts known to the Office     
of the United States Attorney, the United States Attorney's Office does not     
intend to seek criminal charges against the Company or its CMM Division in      
connection with allegations arising out of, or relating to, the manufacture,    
sale or service of CMMs.                                                        

According to Douglas A. Starrett, President and CEO of the Company, "We are     
pleased to resolve this matter and put the Government investigation behind      
us.  Of course, I would have preferred an opportunity to rebut these            
allegations in court, but given the cost of litigation, which can be            
substantial for a small company like ours, and its burden on our employees,     
we believe that this settlement is in the best interest of the Company and      
its stockholders.  Our customers and employees should understand that the       
decision to settle this matter was purely a financial decision.  We would       
rather focus our energies and resources on manufacturing the finest             
precision measuring instruments, hand tools and saw blades - something which    
we have been doing since 1880 - than to divert our resources in protracted      
litigation."                                                                    

CONTACT: Roger U. Wellington, Jr., Chief Financial Officer, The L.S.            
Starrett Company, at  (978) 249-3551.                                           

# # #                                                                           

Certain statements in this release may constitute forward-looking               
statements. They are based on management's current expectations and could be    
affected by numerous factors and are subject to various risks and               
uncertainties. Certain of those risks and uncertainties are discussed in the    
Company's filings with the Securities and Exchange Commission, including the    
Company's annual report on Form 10-K and quarterly reports on Form 10-Q. Do     
not rely on any forward-looking statement, as we cannot predict or control      
many of the factors that ultimately may affect our ability to achieve the       
results estimated. We make no promise to update any forward-looking             
statement, whether as a result of changes in underlying factors, new            
information, future events or otherwise.                                        

9490535_5.DOC   -2-                                                             
9490535_5.DOC                                                                   

Dates Referenced Herein   and   Documents Incorporated by Reference

This ‘8-K’ Filing		Date		Other Filings
Filed on / For Period End:		9/1/04
		6/26/04		10-K,  5
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