4-DAY DEADLINE ALERT Kessler Topaz Meltzer & Check, LLP Announces Deadline in Securities Fraud Class Action Lawsuit Filed Against Healthcare Services Group, Inc.
The law firm of Kessler Topaz Meltzer & Check, LLP reminds Healthcare Services Group, Inc. (Nasdaq: HCSG) (“Healthcare Services”) investors that a securities fraud class action lawsuit has been filed on behalf of purchasers of Healthcare Services securities between April 11, 2017 and March 4, 2019, inclusive (the “Class Period”).
REMINDER: Investors who purchased Healthcare Services securities during the Class Period may, no later than May 21, 2019, seek to be appointed as a lead plaintiff representative of the class. For additional information or to learn how to participate in this litigation please visit www.ktmc.com/healthcare-services-group-inc-securities-class-action.
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.”