Accretive Health, Inc. (NYSE:AH) today announced that following
discussions with its independent auditors, the Company has
determined that although its work associated with its financial
restatement is substantially complete, it has taken longer than
anticipated and more time is needed. As a result, the Company will
not be in a position to complete its financial restatement by the
previously disclosed March 19, 2014 New York Stock Exchange (NYSE)
deadline to file its Annual Report on Form 10-K with the Securities
and Exchange Commission (SEC).
Accretive Health has made substantial progress on its Form 10-K
for the year ended December 31, 2013, including the financial
statements for the years ended December 31, 2013 and 2012 and the
restated financial statements for the year ended December 31, 2011,
on which audits are underway. The Company is currently in the
process of working with its auditors to complete the audits as soon
as possible.
As a result, the Company expects to receive a delisting
determination letter from the NYSE indicating that the Company’s
common stock will be suspended from trading on the NYSE effective
prior to the opening of the market on March 17, 2014. Immediately
following the suspension of NYSE listing, the Company expects that
trading will continue uninterrupted through the facilities of the
OTC Markets Group Inc. The Company has provided information
regarding the market change in the FAQ section of its investor
relations website.
The Company continues to expect the restatement will have no net
impact on total cash flows in any reporting period, or on the
Company’s cash balance. The Company’s cash and cash equivalents as
of December 31, 2013 were approximately $228 million. The Company
had no debt outstanding as of December 31, 2013.
“While we are disappointed with the delay, we continue our
relentless mission to deliver outstanding service to our clients.
We have used this time to strengthen our value proposition and
enhance our client focus, including increasing our investment in IT
and reinforcing our front-line teams. We are moving our entire
organization forward to help provider clients optimize their
financial performance, in the face of ongoing industry change, to
ensure the sustainability of their missions,” said Steve
Schuckenbrock, president and chief executive officer of Accretive
Health. “I have every confidence in our ability to complete the
necessary work to file our restatement and regain our stock
exchange listing. I would like to acknowledge all Accretive Health
employees, our auditors, and advisors for their extensive work and
contributions to the restatement process, and thank our clients and
our shareholders for their continued patience as we work to
complete this process.”
As previously disclosed, the Company’s Audit Committee on March
4, 2013 determined that the Company will restate its financial
statements to correct errors related to the timing of revenue
recognition under a significant number of its revenue cycle
management agreements. The Company subsequently determined that a
significant portion of the base fee revenues from its revenue cycle
management agreements should have been presented in the Company’s
previously reported financial statements net of associated
operating costs rather than based on the gross amount of base fees
billed to clients. In the Company’s Form 12b-25 filed with the SEC
on March 4, 2014, it disclosed it has also reviewed its
capitalization of internally developed software and has determined
that a portion should have been expensed as incurred rather than
initially capitalized and subsequently amortized to expense in
later periods. Accordingly, the Company will revise its financial
statements to correct these errors.
Operational Update
Accretive Health has taken substantial steps over the past year
to position the Company to capture additional growth opportunities
within the dynamic U.S. healthcare marketplace. In January 2014,
the Company implemented a strategic restructuring plan to reduce
costs, improve resource efficiency and enhance organizational
effectiveness. The Company believes this plan will further
strengthen its ability to help provider clients optimize their
financial performance to ensure the sustainability of their patient
care missions.
The Company has initiated a number of strategic initiatives
based on direct feedback from clients to more effectively allocate
the necessary resources to enhance client service and drive growth
and innovation. To date, the Company has made progress across the
following areas:
- Strengthening front-line teams –
The Company is redeploying corporate resources to its front-line
teams at client sites, including the relocation of resources closer
to clients, to enhance execution and client engagement. As part of
this initiative, the Company has also launched a certification
process for on-site employees to ensure that they are providing
best-in-class support and services.
- Increasing investment in IT – As
part of its initiative to enhance client service, the Company is
investing over one-third of its 2014 IT budget in technologies to
enable it to more seamlessly integrate with clients’ existing
technologies. The Company plans to continue to deploy resources to
bolster its already robust IT infrastructure to drive additional
value for clients. In February 2014, the Company hired Patrick
Funck as Chief Information Officer, an industry veteran with 25
years of experience.
- Simplifying the measurement
model – The Company has made progress in simplifying its model
to measure results for clients, and will provide a further update
upon the completion of its restatement.
- Improving the consistency of results
for clients – The Company has developed a more rigorous and
systematic approach to gather and apply the insights it gains from
daily operations across the entire client base. The Company intends
to leverage this scale and depth to drive innovation and
standardize processes to create a best-in-class operating
system.
- Boosting sales and marketing
efforts – New business development remains a priority at
Accretive Health, and the Company has continued to expand its sales
force with the addition of new sales personnel in recent months.
The Company is also integrating its marketing effort and has
launched a new client website. In addition, it has integrated its
AccretivePAS clinical sales capabilities with its revenue cycle
sales organization to offer clients multiple paths to engage with
Accretive Health’s core business.
About Accretive Health
At Accretive Health, our mission is to partner with healthcare
communities to serve as a catalyst for a healthier future for all.
For more information, visit www.accretivehealth.com.
Safe Harbor
This press release contains forward-looking statements,
including the Company’s statements regarding its ability to
complete its restatement and make required SEC filings, the
anticipated consequences of the restatement of the Company’s
financial statements described above, and statements regarding the
Company’s strategic initiatives. All forward-looking statements
contained in this press release involve risks and uncertainties.
Our actual results and outcomes could differ materially from those
anticipated in these forward-looking statements as a result of
various factors, including the possibility that any restatement
that may be required could have unanticipated consequences and the
factors set forth in our Quarterly Report on Form 10-Q for the
quarter ended September 30, 2012, filed with the SEC on November 8,
2012, under the heading “Risk Factors”. The words “strive,”
“objective,” “anticipates,” “believes,” “estimates,” “expects,”
“intends,” “may,” “plans,” “projects,” “would,” and similar
expressions are intended to identify forward-looking statements,
although not all forward-looking statements contain these
identifying words. The Company has based these forward-looking
statements on its current expectations and projections about future
events. Although the Company believes that the expectations
underlying any of its forward-looking statements are reasonable,
these expectations may prove to be incorrect and all of these
statements are subject to risks and uncertainties. Should one or
more of these risks and uncertainties materialize, or should
underlying assumptions, projections, or expectations prove
incorrect, actual results, performance, financial condition, or
events may vary materially and adversely from those anticipated,
estimated, or expected.
All forward-looking statements included in this press release
are expressly qualified in their entirety by these cautionary
statements. The Company cautions readers not to place undue
reliance on any forward-looking statement that speaks only as of
the date made and to recognize that forward-looking statements are
predictions of future results, which may not occur as anticipated.
Actual results could differ materially from those anticipated in
the forward-looking statements and from historical results, due to
the uncertainties and factors described above, as well as others
that the Company may consider immaterial or does not anticipate at
this time. Although the Company believes that the expectations
reflected in its forward-looking statements are reasonable, the
Company does not know whether its expectations may prove correct.
The Company’s expectations reflected in its forward-looking
statements can be affected by inaccurate assumptions it might make
or by known or unknown uncertainties and factors, including those
described above. The risks and uncertainties described above are
not exclusive, and further information concerning the Company and
its business, including factors that potentially could materially
affect its financial results or condition or relationships with
customers and potential customers, may emerge from time to time.
The Company assumes no, and it specifically disclaims any,
obligation to update, amend, or clarify forward-looking statements
to reflect actual results or changes in factors or assumptions
affecting such forward-looking statements. The Company advises
investors, however, to consult any further disclosures it makes on
related subjects in our periodic reports that it files with or
furnishes to the SEC.
Accretive Health, Inc.Investor Relations:Atif Rahim,
312-324-5476investorrelations@accretivehealth.comorMedia
Relations:Joele Frank, Wilkinson Brimmer KatcherAndrea Rose /
Mahmoud Siddig, 212-355-4449
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