Orthofix International ($OFIX) is confronting yet another indignity in what has been a tough couple of years. The Texas orthopedic device maker disclosed that Nasdaq smacked it with an expected delisting notice, a measure threatened months ago because the company missed filing its 2013 second-quarter financials on time (a violation of listing rules).
Nasdaq's notice follows a 2012 Medicare kickback scandal and a shareholder lawsuit alleging it misrepresented its revenue in 2011, 2012 and the 2013 first quarter.
Orthofix explained that a delayed filing of financials for fiscal quarters ending both June 30, 2013 and Sept. 30, 2013 triggered the notice it finally received on Feb. 11. The delisting goes into effect unless Orthofix requests a hearing before the Nasdaq Listing Qualifications Panel. Orthofix said it plans to do just that, and also request a delisting stay in the interim. A hearing request delays the delisting at least until March 5, 2014.
Orthofix traded at $21.53 on Feb. 13 in late morning trading, up 1.4%.
Orthofix's problems came to a head a few years ago, when news broke that the company and some of its top managers had been charged with using kickbacks to encourage doctors to use its bone growth stimulator products, leading to alleged Medicare fraud. Orthofix settled the case in December 2012, pleading guilty to a single felony county of obstructing an audit, paid a $7.6 million fine and settled a number of civilian claims in a deal that cost it $34.2 million plus interest.
Managers involved in the case have since been sentenced. But fallout has continued. Last summer, Orthofix disclosed it had misstated revenue for fiscal 2011, fiscal 2012 and the 2013 first quarter. A shareholder lawsuit followed, and Nasdaq began to threaten delisting after Orthofix missed filing its 2013 second-quarter financials.
- read the release