Publicly traded imaging center operator Akumin Inc. said it will miss a key upcoming financial filing deadline because it needs more time to comply.
Back in August, the Plantation, Florida, firm was forced to postpone the release of its second quarter earnings amid issues with auditors. The delay led to Akumin barring management from trading the company’s stock and prompted Moody’s to downgrade its outlook to “negative,” warning of a possible debt default.
The company originally hoped to file financials by Oct. 15, but in a Tuesday update said it’s not going to happen.
“Akumin is conducting a robust review process relating to its financial results which is taking more time than originally envisioned in light of the recent acquisition of Alliance HealthCare Services that was completed on September 1, 2021,” Riadh Zine, chairman and co-CEO, said referring to the recently closed $820 million merger deal. “Notwithstanding the delay in filing our financial statements, we remain confident and excited about the fundamentals of the combined business and thank our various stakeholders for their patience.”
Zine and colleagues said the audit has identified issues in the recording of write-offs and cash collections on acquired accounts receivable balances, impacting both 2021’s second quarter and prior periods. In addition, estimates of price concessions and expected collection rates were not reflective of the actual collections that occurred. Akumin estimated that these changes will result in an accounts receivable balance of $65-$70 million as of June 30, rather than the previously reported March 31 balance of $95.9 million.
The company said it expects to file the required reports prior to Nov. 15, which is the deadline for its third quarter financial statements. In September, Moody’s Investors Service said missing the 60-day, Oct. 15 deadline would “substantially increase the risk of a default event” and weaken the ratings service’s assessment of liquidity and corporate governance.
Combined with Alliance Healthcare Services, Akumin operates across 46 states, serving 1,000 hospital and health system customers, with 154 outpatient imaging centers and 34 more radiation therapy clinics.
Marty Stempniak has covered healthcare since 2012, with his byline appearing in the American Hospital Association's member magazine, Modern Healthcare and McKnight's. Prior to that, he wrote about village government and local business for his hometown newspaper in Oak Park, Illinois. He won a Peter Lisagor and Gold EXCEL awards in 2017 for his coverage of the opioid epidemic.