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American Renal stock down 16% after a delay in earnings report
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The stock value in dialysis provider American Renal Associates Holdings plunged 16% on March 8 after the company announced it would delay the filing of its fourth-quarter and full-year earnings for fiscal year 2018. The Beverley, Massachusetts-based company, the fifth largest dialysis provider in the country, said in a press release that it was still reviewing reserve computations and other accounting practices that may have an impact on the company’s accounts receivable and revenue for the year. American Renal said it was also looking at similar computations for fiscal years 2014 to 2017.
The company’s audit committee “is continuing to evaluate whether and how any such adjustments will affect individual quarters and years during the affected period, and the company does not expect to comment further on the audit committee’s review until it is completed.”
This news follows an October 2018 request by the Securities and Exchange Commission for documents concerning American Renal’s revenue recognition practices, collections and other related matters.
“Following receipt of the SEC request, the company responded by producing documents and information to the staff and expects to continue to cooperate with the SEC by providing additional documents and information to the staff in the future,” American Renal said in the press release.
On the news, the company’s share price fell $2.05, a little more than 16%, closing at $10.46 on March 8, 2019. The price was down further, ending at $9.79 a share at the end of the day on March 11.
The company did provide some basic information to investors. As of Dec. 31, 2018, the company provided services at 241 outpatient dialysis clinics that served 16,543 patients compared to 228 outpatient dialysis clinics that served 15,637 patients at the end of 2017. Total dialysis treatments for the fourth quarter of 2018 were 600,190, representing an increase of 6.1% during the fourth quarter of 2017. Total dialysis treatments for the year ended Dec. 31, 2018 were 2,311,037, an increase of 5.5% during the prior year period.
During the fourth quarter of 2018, the company opened five de novo clinics and acquired one clinic. For the year ended Dec. 31, 2018, the company opened 13 de novo clinics, acquired one clinic and sold one clinic. As of Dec. 31, 2018, the company had 28 signed clinics scheduled to open in the future.
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