Accretive Health, a Chicago-based revenue-cycle management firm that is evaluating its future, saw its own revenue take a dive in the second quarter after losing customers.
Last month the company hired legal and financial advisers to determine its next move after turning down a takeover offer from Ascension.
Its second-quarter results posted Wednesday showed a $26.3 million net loss on $22.1 million in revenue compared with a $16.8 million net loss on $59 million in revenue in the same quarter last year.
Accretive's earnings tend to be weaker in the first half of the year because of the timing of when it recognizes incentive payments and operating fees, executives said on an earnings call.
In early 2013, the company changed when it records revenue from its contracts, prompting it to restate financial results from as far back as 2011. The move delayed the release of earnings results for 2012 and subsequent periods, and ultimately caused it to be delisted from the New York Stock Exchange. Shares traded around $12 before Accretive's February 2013 disclosure that its 2012 results would be delayed.
With the second-quarter results Wednesday, Accretive is now up to date with its Securities and Exchange Commission filings and will resume normal reporting going forward, CEO Dr. Emad Rizk said on the earnings call.
Accretive had once expected to apply for a relisting after completing its financial restatement, but that plan is now on hold. The company does not meet the minimum $4 per share threshold to trade on the New York Stock Exchange or Nasdaq, said Peter Csapo, its chief financial officer.
Rizk declined to comment on the strategic review process, saying only, “The process is ongoing and we expect it to be a thorough one.”
Accretive turned down a bid from Ascension—its largest client, representing about half of its revenue—after deeming it too low. The midpoint of the preliminary offer represented only 50% of Accretive's market value on the day the offer was made public, the company said.
But since then, Accretive's shares have slid from $5.42 to about $2.70.
Ascension also notified Accretive that it does not intend to renew its professional service agreement with Accretive when it expires in August 2017.
Accretive's business hit turbulence in 2011 when the Minnesota attorney general alleged the company misused patient data and engaged in overly aggressive collection tactics. Under a settlement, Accretive paid a fine and agreed to temporarily stop doing business in the state.
Its troubles escalated with the delays in its financial reporting, and the company has been trying to regain its footing with a corporate restructuring and management shake-up.
Rizk expressed optimism about the company's future.
“Almost all of our internal indicators of performance have improved,” Rizk told analysts and investors. “We continue to pursue opportunities to expand our business," he said. "Our goals are unchanged.”
