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Doctors' helper takes a dive
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March 3, 1998: 12:05 p.m. ET
Physician Computer Network stock plummets as audit lags, losses mount
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NEW YORK (CNNfn) - Shares of Physician Computer Network, Inc., a provider of health-care information systems to doctors, lost more than two-thirds of their value Tuesday after the company said it expects to report operating losses for 1997 ranging from $27 million to $31 million.
The company's stock skidded 2-7/8 in mid-morning trading to 1-3/8 on news that its independent auditors, KPMG Peat Marwick, had delayed completion of the company's 1997 audit after identifying certain instances in which Physician Computer Network (PCNI) had "improperly recognized" items of revenue and expense.
The company said it expects to report a loss from operations in the fourth quarter, ended Dec. 31. It also anticipates losses in restated results in each of the previous three quarters.
The company also said its president, Jack Mortell, has taken a temporary leave of absence pending the completion of the audit.
Compounding these concerns, the company said final results are likely to include one-time, special charges unrelated to the revenue and expense misstatements. These losses could amount to $25 million.
Physician Network develops practice management software used by doctors. It also makes interactive communications software that enables doctors to link their practices with hospitals, Medicare and Medicaid carriers, commercial insurance carriers and pharmacies and health maintenance organizations.
Despite the dour outlook, the company said it will continue to maintain its large data base of customers. It also expressed confidence that its leading software product, the PCN Health Network Information System, is not in jeopardy.
Product releases for 1998 will remain on schedule while the auditors continue to examine the scope and nature of the losses, the company said. 
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