Apria’s Chief Fends Off Talk of Slippery Accounting

Apria Healthcare Group Inc.’s chief executive said he is comfortable with analysts’ expectations for the second quarter and dismissed as “ridiculous” accusations of accounting irregularities raised by short-sellers.

In an interview, Philip Carter said there is no truth to the market talk that Apria Healthcare, a Costa Mesa home health care company, is improperly adjusting its accounts-receivable figure.

The rumors apparently helped trigger an 11% drop in the company’s shares Wednesday. The shares fell $2.39 to $19.13, though they had been as low as $17.88 during the day.

Some eyebrows were raised when the company reported its first-quarter results and showed a write-off for accounts receivable that was “lower than it’s ever been,” Carter said.

In the first quarter, the provision for doubtful accounts was $8.6 million, compared with $13.8 million a year earlier.

Accounts receivable write-offs follow a strict formula that doesn’t allow for creative accounting, he said.

The lower figure was not the result of any accounting sleight of hand but “the fruit of the work that I was brought in here to do,” said Carter, an accountant hired a year ago in a management shake-up designed to help turn the struggling company around after deep losses and an aborted attempt to find a buyer.