Quorum drops after disclosing 'substantial doubt' on remaining 'going concern'
Quorum Health (QHC) shares are moving lower after the company disclosed in its quarterly filing that recent events "raised substantial doubt" about its ability to continue as a "going concern." Quorum Health stated, "In accordance with Accounting Standard Codification 205-40, Presentation of Financial Statements - Going Concern, management concluded that there were probable conditions or events that raised substantial doubt about the Company's ability to continue as a going concern due to the fact that the Company's maximum Secured Net Leverage Ratio permitted under the CS Agreement is reduced to 4.50 from 5.00 in the first quarter of 2020. The Company is in compliance with its financial covenants as of March 31, 2019 and believes that it is probable that the Company's current and anticipated future operating results alleviate the substantial doubt about the Company's ability to continue as a going concern for the one year period following the date these financial statements are issued." Quorum Health added that its recent agreement with R1 RCM (RCM), which includes end-to-end revenue cycle management services, should achieve costs savings and improve its net patient revenues through improvements in operational effectiveness and efficiencies. Quorum shares are down 7%, or 15c, to $1.93 in morning trading.