Pomerantz LLP announces that a class action lawsuit has been filed against Tivity Health, Inc. (“Tivity” or the “Company”) (NASDAQ: TVTY) and certain of its officers. The class action, filed in United States District Court, for the Middle District of Tennessee, and indexed under 20-cv-00165, is on behalf of a class consisting of all persons and entities other than Defendants who purchased or otherwise acquired Tivity securities between March 8, 2019, and February 19, 2020, both dates inclusive (the “Class Period”), seeking to recover damages caused by Defendants’ violations of the federal securities laws and to pursue remedies under Sections 10(b) and 20(a) of the Securities Exchange Act of 1934 (the “Exchange Act”) and Rule 10b-5 promulgated thereunder, against the Company and certain of its top officials.
Tivity provides fitness and health improvement programs in the United States. The Company was formerly known as Healthways, Inc. and changed its name to Tivity Health, Inc. in January 2017.
In December 2018, Tivity announced that it would acquire Nutrisystem, Inc. (“Nutrisystem”), a provider of weight management products and services (the “Nutrisystem Acquisition”). On March 8, 2019, Tivity announced the completion of the Nutrisystem Acquisition for approximately $1.3 billion in cash and stock.
The Complaint alleges that throughout the Class Period, Defendants made materially false and misleading statements regarding the Company’s business, operational and compliance policies. Specifically, Defendants made false and/or misleading statements and/or failed to disclose that: (i) following the Nutrisystem Acquisition, Tivity’s Nutrition segment faced significant operational challenges; (ii) the foregoing would foreseeably have a significant impact on Tivity’s revenues; and (iii) as a result, the Company’s public statements were materially false and misleading at all relevant times.
On February 19, 2020, Tivity issued a press release announcing the Company’s financial results for the fourth quarter and year ended December 31, 2019. Tivity disclosed, inter alia, that its “Nutrition segment had a disappointing end to 2019,” which included “a non-cash impairment charge of $(377.1) million,” contributing to a net loss for the Company of $272.8 million in the fourth quarter. Concurrently, Tivity announced the resignation of the Company’s Chief Executive Officer (“CEO”) Donato Tramuto, effective immediately. Discussing the Company’s financial results on an earnings call, the Company’s interim CEO, Robert Greczyn, stated that “[a]dmittedly, the nutrition business has not worked out as well as planned since the completion of the [Nutrisystem Acquisition] in March 2019.
On this news, Tivity’s stock price fell $10.43 per share, or 45.49%, to close at $12.50 per share on February 20, 2020.