Athenahealth announced its fourth-quarter earnings report March 15, several weeks later than planned. The results appeared to come as a relief to investors concerned that the company had delayed reporting fourth-quarter earnings in order to conduct an internal accounting policy review related to the timing of amortization for deferred implementation revenue.

During a conference call with investors March 16, athenahealth CEO Jonathan Bush said he called for the review as part of bringing the company’s new chief financial officer, Timothy Adams, on board. Bush stressed that the review was initiated by athenahealth.

Shares of the medical billing services company dropped 15 percent in a single day last month, from $43.50 to $36.80, when the company announced it would delay the release of fourth-quarter 2009 earnings in order to conduct an internal accounting review. The announcement was preceded by articles in several financial publications positing that executives at the company had sold large amounts of athenahealth stock during a period when stock prices might have been artificially inflated.

Monday’s restatement of earnings appears to have reassured investors. A high volume of trading followed the announcement. The stock reached $41 per share, before closing at $39.71. Over the past year, athenahealth stock has traded between $23.15 and $47.82 per share, generally climbing during 2009.

On Monday, the company reported record earnings of $54 million and a 34-percent increase in gross revenues since the fourth quarter of 2008. Bush noted that this was the tenth consecutive year in which the company had shown more than 30-percent growth. A change to the company’s policy of amortizing implementation revenues, however, surprised many analysts and investors.

Athenahealth had been amortizing implementation revenues over a one-year period. The figure is an indication of the estimated length of time customers will stay with the company. On Monday, athenahealth announced it would change the amortization period to 12 years — a figure that a number of analysts deemed exceptionally conservative.

During a conference call on the day following the announcement, Adams conceded that the 12-year amortization period could be a drag on short-term revenue growth, but said the 92-percent customer retention rate implied in the 12-year figure had been borne out historically.

Adams said the accounting changes related to a small portion of revenue and would not affect the company’s cash flow or underlying business, but several areas including the gross margin line, adjusted earnings before interest, taxes, depreciation and amortization, and the adjusted operating income margin could finish the year 2 to 4 percent below previous estimates.

Asked why the restatement didn’t affect last year’s earnings the way it was projected to affect earnings in 2010, Adams said, “Q4 [quarter four of 2009] was just a great quarter.”

Bush confirmed the questioner’s statement that the company had outperformed expectations in the final quarter of 2009 but said company officials did not want to bank on that kind of performance in the future.

“Our strategy is kind of going the other direction,” he said. “… This is a really big chance for market share for us and we don’t want to mess that up. Rather than insure ourselves with bottom line, we want to insure ourselves with awareness and sales funnel.”

[Editor’s note: A “sales funnel” is graphic representation of the sales process, wherein a large number of prospective customers at the top of the funnel shrinks during the stages of negotiation leading up to the sale. From a management perspective, when aspects of the negotiation process are improved, larger numbers of customers reach the bottom of the funnel.]

Athenahealth is based in Watertown, Mass. The company operates a 225-employee facility in Belfast.