This is not a fun day for athenahealth, and frankly with HIMSS coming up, not a fun time to have such a day. None of this has anything to do with their products or their client services, but late last night the company announced that it’s going to be restating its earnings. You can see a longer discussion on The Street.com but essentially it appears that athenahealth has been amortizing its installation costs over one year whereas they ought to have been doing it over more years. The net result is that they’ll have to restate some earnings and are going to miss the next earnings reporting deadline. The stock is off roughly 12% today.
What’s been happening is that the new CFO (Timothy Adams) has come in and cleaned house, and not liked what some of the old CFO (Carl Byers who moved to Chile!) had been doing. Long term this clean up is probably good news. The company is still operationally profitable (we assume!), and its business of running the back office and increasingly front offices of doctors using a combination of technology and forklifts/sweat remains a great way of both routinizing their businesses and aggregating data for overall process improvement.
So better to get any financial “irregularities” cleared out now and be more conservative. But while other than the shareholders (and the coming lawsuits) it probably doesn’t matter much, this may per chance slow down Jonathan Bush a touch next week. Or maybe not. We’ll see….