Shares of America Service Group (ASGR) were among the worst-performing health-related stocks Monday, falling 31% after the provider of prison health care services said it is conducting an internal investigation into accounting issues at its Secure Pharmacy Plus subsidiary.
America Service said it is specifically looking into whether "SPP provided pricing of pharmaceuticals in accordance with applicable client contract terms and whether some of the accruals and reserves maintained by SPP were established and utilized in accordance with generally accepted accounting principles."
America Service said the investigation is still in the early stages, so it doesn't know whether it will record any charges related to the probe. "We take allegations of impropriety very seriously, and we are conducting a thorough investigative process to determine if the issues described in this press release, as well as any other issues which may be identified as a result of the investigation, will impact the company's previously reported financial results," the company said. America Service said it has reported the accounting issues being investigated to the Securities and Exchange Commission.
America Service also said its previous full-year earnings guidance shouldn't be relied upon. In August, the company projected that it would earn $1.43 to $1.50 a share on sales of $640 million to $660 million during 2005. Analysts polled by Thomson First Call had forecast earnings of $1.46 a share and sales of $648.3 million. Shares recently were down $5.67 to $12.49.United Natural Foods (UNFI - Get Report) tumbled 10% after the distributor and retailer of natural foods announced the immediate resignation and retirement of its chief executive. The company said Steven Townsend is leaving United Natural to "devote more time to his other investments and business interests." Townsend, 52, will remain with the company as chairman during a transitional period. Director Michael Funk, meanwhile, will succeed Townsend. Funk served as CEO of the company from 1999 to 2002. Shares dropped $3.37 to $30.09.