Prospect Medical Holdings, which operates four community hospitals in Southern California and manages medical care of 240,000 HMO enrollees, said it will delay filing its annual financial report with the Securities and Exchange Commission.
As previously disclosed, the Culver City, Calif.-based company plans to restate 2006 earnings for Alta Healthcare System, a four-hospital system in Los Angeles, which it purchased in August in a cash and stock deal valued at about $103 million. The company said it has retained independent counsel to advise its auditors on the matter.
Prospect Medical officials said they hope to complete the Alta Healthcare restatement and review within the 15-day extension period allotted by the SEC but that the company may not meet that deadline.
Any decrease in Altas 2006 pre-tax income is expected to be less than $5 million, Prospect Medical officials said. The company also acquired Pro-Med Healthcare, comprised of two physician associations in Southern California, for $48 million in June.
While these investments will impact our profitability in fiscal 2007, we are confident that the associated initiatives are positioning Prospect to capitalize on the significant opportunities in our industry, Jack Terner, chairman and chief executive officer of Prospect Medical, said in a written statement. -- by Rebecca Vesely
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