Healthways posts $5M Q4 loss

EPS shortfall due to $10M of business not recognized in 2013; sales come up short of October guidance

Healthways announced Thursday a net loss of $5 million, or 15 cents per share, in the fourth quarter, with a one-time accounting move pushing the company into the red. Without that item, Healthways' EPS would have come in at 2 cents, a penny below analysts' expectations. A year ago, the Franklin-based company posted net income of $0.6 million, or 2 cents per diluted share.

Revenues for the quarter came in below the company's guidance from last fall of $171 to $181 million, with total revenues at $169 million compared to $175 million in Q4 2012.

President and CEO Ben Leedle said in a statement that the below-guidance results were solely due to an accounting decision regarding $10 million worth of work the company did during the third and fourth quarters and was paid for last month. Leedle and his team made the decision to defer the revenues after "a comprehensive review with our independent auditor."

"We made a determination to recognize the $10 million during 2014 and 2015," Leedle said. "While this accounting conclusion has a disproportionate impact on fourth-quarter revenue and earnings, it will have an offsetting positive impact on our earnings over 2014 and 2015."

In response to a question on the company's earnings conference call, CFO Alfred Lumsdaine declined to detail the contractual details that pushed the revenue out of 2013, but said the company expected to book about $4 million in 2014 and $6 million in 2015.

Also on the call, Leedle told listeners that 2012 and 2013 were the "most successful business development years in the company's 33-year history," which is creating a clearer path to sustained profitable growth. Revenue guidance for 2014 was between $730 and $760 million, Lumsdaine said, with the company's three largest contracts retained and the low end of the range excluding any new business.

Shares of Healthways (Ticker: HWAY) were down more than 3 percent in after-hours trading Thursday to $13.40 per share. They're about 10 percent over the past three months.