Athenahealth Inc. (NSDQ:ATHN) is taking its lumps from investors and analysts after postponing a scheduled earnings announcement while company officials work to complete a year-end audit and internal accounting policy review.
In announcing the delay, executives with the Watertown, Mass.-based provider of web-based processing of insurance claims for physician practices did not indicate when they expect to complete the review. They said the company would be filing documentation with the federal Securities & Exchange Commission next week, seeking an additional five days before issuing its financial results for the three months and fiscal year ended Dec. 31, 2009.
The company already had been experiencing some upheaval connected with its accounting. It announced on Jan. 11 that Timothy Adams had been appointed as its new chief financial officer, replacing Carl Byers, who had been in that position at Athenahealth since its 1997 founding. Byers said last summer he planned to step down in early 2010 but was planning to stay on as an advisor to the company.
Athenahealth earlier this month also said it was changing the way it would account for its non-GAAP adjusted net income.
Several analysts were quick to downgrade the company’s stock, which on Feb. 26 opened down $5 a share, or about 12 percent, from its previous close. Through the first hour of trading, volume was about six times the stock’s activity for a full session. Robert W. Baird and JMP Securities dropped their respective outlooks for the stock, with JMP lowering its rating for Athenahealth from “Outperform” to “Market Perform” while Baird reduced its rating from “Outperform” to “Neutral.”
In a statement Feb. 25, Athenahealth said its accounting review “related to the timing of amortization for deferred implementation revenue.” Through the first nine months of 2009, the company had reported nearly $7.6 million in implementation and other revenues, or about 5.5 percent of the company’s total revenues for the period.
According to recent financial statements, implementation revenues largely consist of “professional services fees related to assisting clients with the implementation of our services and for ongoing training and related support services.”
Through Sept. 30, Athenahealth reported total revenues of $137.5 million.