Healthcare Services investors may receive additional information about the case by clicking the link "Submit Your Information" above.
According to the complaint, Healthcare Services engages in the management, administrative, and operating services to the housekeeping, laundry, linen, facility maintenance, and dietary service departments to nursing homes, retirement complexes, rehabilitation centers, and hospitals in the United States. Healthcare Services operates through two segments, Housekeeping and Dietary. The Housekeeping segment engages in the cleaning, disinfecting, and sanitizing of resident rooms and common areas of a client’s facility, as well as laundering and processing of the bed linens, uniforms, resident personal clothing, and other assorted linen items utilized at a client facility. The Dietary segment is involved in the food purchasing and meal preparation activities, as well as in the provision of professional dietitian services, which include the development of menus that meet the dietary needs of residents. After years of purported growth and strong earnings on the part of Healthcare Service, on March 22, 2017, Monocle Accounting Research (“Monocle”) published an article on Seeking Alpha, entitled “Healthcare Services Group: A Decade of Strategic Rounding.”
The Class Period commences on April 11, 2017, when Healthcare Services reported that revenues for the three months ended March 31, 2017 increased approximately 5% to $404.5 million, and that net income for the three months ended March 31, 2017 was $22.0 million, or $0.30 per basic and diluted common share, compared to the three months ended March 31, 2016 net income of $18.6 million, or $0.26 per basic and diluted common share.
The complaint alleges that, on March 4, 2019, in a Form 8-K filed with the SEC, Healthcare Services disclosed that it had received a letter in November 2017 from the SEC regarding an inquiry that the SEC was conducting into earnings per share (“EPS”) calculation practices and requesting that Healthcare Services voluntarily provide certain information and documents relating to its EPS rounding and reporting practices. The March 4, 2019 Form 8-K further disclosed that Healthcare Services also had received a subpoena in March 2018 from the SEC in connection with these matters and that it had been providing information and documents to the SEC. Also, on March 4, 2019, Monocle published an article entitled “‘Strategic Rounding’ At Healthcare Services Group: A Subpoena From The SEC And An Internal Investigation,” stating that “Healthcare Services Group’s decade of apparent earnings manipulation through the ‘strategic rounding’ of its quarterly EPS has finally bitten the company and its investors.”
Following this news, Healthcare Services’ stock price fell $4.96 per share, or 13.14%, to close at $32.78 on March 4, 2019.
The complaint alleges that throughout the Class Period: (1) Theodore “Ted” Wahl, the CEO and President of Healthcare Services, either knew or was reckless in not knowing that Healthcare Services had been accused of strategically rounding quarterly EPS and therefore, investors could not rely upon Healthcare Services’ track record without conducting a thorough investigation into the allegations; (2) the defendants concealed from investors the fact that the SEC had written to Healthcare Services in November 2017 to inquire into its EPS rounding practices; (3) Healthcare Services concealed from investors the fact that the SEC delivered a subpoena to Healthcare Services in March 2018 commanding the company to produce documents to the SEC in connection with how it calculated EPS; and (4) as a result, the defendants’ statements about the Healthcare Services’ business, operations and prospects were materially false and misleading and/or lacked a reasonable basis at all relevant times.
If you are a member of the class described above, you may no later than May 21, 2019 move the Court to serve as lead plaintiff of the class, if you so choose.
A lead plaintiff is a representative party that acts on behalf of other class members in directing the litigation. In order to be appointed lead plaintiff, the Court must determine that the class member’s claim is typical of the claims of other class members, and that the class member will adequately represent the class. Your ability to share in any recovery is not, however, affected by the decision whether or not to serve as a lead plaintiff. Any member of the purported class may move the court to serve as a lead plaintiff through counsel of their choice, or may choose to do nothing and remain an inactive class member.
Kessler Topaz Meltzer & Check, LLP has not filed a complaint in this matter. If you wish to discuss this action or have any questions concerning this notice or your rights or interests with respect to these matters, please contact Kessler Topaz Meltzer & Check, LLP toll free at 1-888-299-7706 or 1-610-667-7706, or via e-mail at info@ktmc.com. If you would like additional information about the suit, please click on the link "Submit Your Information" above and fill out the form as promptly as possible.
CONTACT:
Kessler Topaz Meltzer & Check, LLP
James Maro, Esq. or Adrienne Bell, Esq.
280 King of Prussia Road
Radnor, PA 19087
1-888-299-7706 (toll free) or 1-610-667-7706
Or by e-mail at info@ktmc.com