SOURCE: AdCare

AdCare

September 02, 2010 08:30 ET

AdCare Closes Lease of Three Additional Nursing Homes in Georgia, Adding $15.5 Million in Annualized Revenue

SPRINGFIELD, OH--(Marketwire - September 2, 2010) -  AdCare Health Systems, Inc. (NYSE Amex: ADK), a recognized innovator in senior living and health care facility management, has closed the lease of three nursing homes according to the previously announced agreement to lease five additional nursing homes in Georgia.

The three nursing homes, which have been leased under a 10-year term, have an aggregate of 280 beds that generate approximately $15.5 million in annualized revenue. With the addition of these three facilities and other transactions closed earlier in the year, AdCare's estimated annualized revenue run-rate now exceeds $79 million, as compared to $26.7 million for the year ended 2009.

Upon closing of the lease transaction, AdCare provided the lessor $195,000 for the first month's lease payment and a portion of the security deposit, with the balance of $337,000 to be paid over five months comprising the balance of the security deposit and an amount equal to two months lease payments.

"This transaction is the third we've closed since we began our M&A campaign at the end of last year," said Chris Brogdon, AdCare's vice chairman and chief acquisitions officer. "We expect all of these facilities to be significant cash generators for AdCare, especially as they come under our highly capable management and benefit from our larger economy of scale."

"As we work toward closing the currently pending transactions we've announced, including the lease of the remaining two nursing homes in Georgia, additional opportunities continue to emerge in the southern region of the U.S.," said Brogdon. "We are working to establish the terms and necessary financings for several new potential acquisitions in our pipeline of equal or greater potential."

Brogdon joined AdCare last September when the company announced a new M&A growth strategy to build upon its strong reputation for operational efficiency and high-quality living environments.

About AdCare Health Systems
AdCare Health Systems, Inc. (NYSE Amex: ADK) is a recognized innovator in senior living and health care facility management. AdCare develops, owns and manages assisted living facilities, nursing homes and retirement communities, as well as provides home health care services. Since its inception in 1988, AdCare's mission has been to provide the highest quality of healthcare services to the elderly. For more information about AdCare, visit www.adcarehealth.com.

Important Cautions Regarding Forward-Looking Statements
 
Statements contained in this press release that are not historical facts may be forward-looking statements within the meaning of federal law. Such statement can be identified by the use of forward-looking terminology, such as "believes," "expects," "plans," "intends," "anticipates" and variations of such words or similar expressions, but their absence does not mean that the statement is not forward-looking. Statements in this announcement that are forward-looking include, but are not limited to, statements that the company expects all of these new facilities to be significant cash generators for AdCare. Such forward-looking statements reflect management's beliefs and assumptions and are based on information currently available to management. The forward-looking statements involve known and unknown risks, results, performance or achievements of the Company to differ materially from those expressed or implied in such statements. Such factors are identified in the public filings made by the Company with the Securities and Exchange Commission and include the Company's ability to secure lines of credit and/or an acquisition credit facility, find suitable acquisition properties at favorable terms, changes in the health care industry because of political and economic influences, changes in regulations governing the industry, changes in reimbursement levels including those under the Medicare and Medicaid programs and changes in the competitive marketplace. There can be no assurance that such factors or other factors will not affect the accuracy of such forward-looking statements.

Contact Information

  • Company Contact
    Chris Brogdon, Vice Chairman & CAO
    AdCare Health Systems, Inc.
    Tel (937) 964-8974
    Email: Email Contact

    Investor Relations
    Ron Both or Geoffrey Plank
    Liolios Group, Inc.
    Tel (949) 574-3860
    Email: Email Contact