Law Offices of Howard G. Smith, representing investors of Addus HomeCare Corporation (“Addus” or the “Company”) (NASDAQ:ADUS), has filed a class action lawsuit in United States District Court on behalf of a class (the “Class”) consisting of all persons or entities who purchased Addus common stock pursuant and/or traceable to the Registration Statement and Prospectus (collectively, the “Registration Statement”) issued in connection with the Company’s October 27, 2009, initial public offering (the “IPO”). The class action lawsuit was filed in the United States District Court for the Northern District of Illinois.
The Complaint charges Addus and certain of the Company’s executive officers and/or directors, among others, with violations of federal securities laws. Addus provides a variety of in-home social and medical services, including personal care and assistance with daily living activities, skilled nursing and rehabilitative therapies and adult day care to individuals with special needs who are at risk of hospitalization or institutionalization. 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) the Company’s accounts receivable included at least $1.5 million in aging receivables that should have been reserved for; and (2) 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 due to the State of Illinois’ effort to develop new procedures for integrating care.
On March 18, 2010, after the market closed, Addus reported its financial results for the fiscal fourth quarter and year ended December 31, 2009, and reported a fourth quarter net loss of $3.7 million, or $0.48 per share. 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.