Abraham, Fruchter & Twersky, LLP announces that a class action lawsuit has been filed in the United States District Court for the Northern District of Illinois on behalf of purchasers of Addus HomeCare Corporation (“Addus” or the “Company”) (Nasdaq:ADUS) stock issued pursuant to the registration statement and prospectus (collectively, the “Registration Statement”) filed with the Securities and Exchange Commission (“SEC”) in connection with the Company’s October 27, 2009 initial public stock offering (the “IPO”).
The Complaint charges Addus, certain of the Company's executive officers and directors, and the underwriters of the Offering with violations of federal securities laws. The Complaint alleges that the Registration Statement was materially false and misleading and/or omitted facts necessary to make the statements made not misleading, including the following: (1) that the Company’s accounts receivable included at least $1.5 million in aging receivables that should have been reserved for; and (2) that the Company’s Home Health revenues were falling short of internal forecasts due to a slowdown in admissions from the Company’s Integrated Services program.
On March 18, 2010, after the market closed, the Company reported its financial results for the 2009 fiscal fourth quarter and year ending December 31, 2009, and reported a net loss of $3.7 million, or a loss of $0.48 per share for the fourth quarter. The Company indicated that Addus had to increase its bad debt reserve levels by $1.5 million, and that during the fourth quarter the Company’s Home Health revenues were short of internal forecasts due to a slowdown in admissions from the Company’s Integrated Services program due to the State of Illinois’ effort to develop new procedures for integrating care.
The following day, shares of the Company’s stock declined $2.60 per share, or approximately 29%, to close at $6.30 per share on March 19, 2010. This closing price represented a cumulative loss of $3.70, or 37%, of the value of Addus shares at the IPO price of $10 per share, just months earlier.