SOURCE: AdCare

AdCare

April 01, 2010 08:00 ET

AdCare Health Systems Reports Record Fiscal 2009 Results

Record Annual Revenues of $26.7 Million Drives Record Net Income of $0.10 per Share

SPRINGFIELD, OH--(Marketwire - April 1, 2010) - AdCare Health Systems, Inc. (NYSE Amex: ADK), an Ohio-based long-term care, home care and management company, reported record results for the fiscal year ended December 31, 2009.

Revenue in 2009 increased 8% to a record $26.7 million from $24.8 million in 2008. The improvement was primarily due to a 3.3% average occupancy increase in skilled nursing centers for the year.

For fiscal 2009, net income was a record $440,000 or $0.10 per diluted share, versus a net loss of $1.1 million or $(0.28) per basic and diluted share in 2008. Net income in 2008 included a $414,000 gain recognized upon the acquisition of the New Lincoln Lodge.

Cash and cash equivalents at December 31, 2009 totaled $4.5 million, as compared to $1.3 million at the end of fiscal 2008. The increase was due primarily to $1.9 million generated by operations in 2009 and a $2.4 million net equity financing completed in the fourth quarter of 2009.

"2009 was a milestone for AdCare, as our fifth consecutive year of revenue growth resulted in our first profitable year as a public company," said David A. Tenwick, AdCare's chairman. "The record results were the outcome of the solid foundation we laid in 2008, which allowed us to increase our occupancy while controlling our expenses. We accomplished this while maintaining the best quality of care and sustaining our position as the provider of choice in the areas we serve.

"In 2009, we also repositioned AdCare to grow more aggressively through acquisitions. In the fourth quarter we strengthened our balance sheet through the issuance of new equity and we expanded our board of directors, including appointing Christopher Brogdon as vice chairman.

"As our largest individual shareholder, Chris has demonstrated a strong, long-term commitment to AdCare. His extensive track record of building publicly-traded companies through strategic acquisitions has continued with us as our new chief acquisitions officer. Chris led the recent negotiations to acquire two nursing facilities, which is expected to close in the second quarter under favorable financing terms and expand our bottom line while adding more than 60% to our annualized top line."

Brogdon commented: "As the year advances, we continue to see tremendous opportunities in the highly fragmented health care segments of senior assisted living, elderly nursing care and home health care services. With several more potential acquisitions in our pipeline, we expect the foundation we laid in 2009 will make 2010 another milestone year for AdCare."

About AdCare Health Systems

AdCare Health Systems, Inc. (NYSE Amex: ADK) develops, owns and manages assisted living facilities, nursing homes and retirement communities and provides home health care services. Prior to becoming a publicly traded company in November of 2006, AdCare operated as a private company for 18 years. AdCare's 850 employees provide high-quality care, management services and other services for patients and residents residing in 19 facilities, six of which are assisted living facilities, 11 skilled nursing centers and two independent senior living communities. The company has ownership interests in eight of those facilities. In the ever-expanding marketplace of long-term care, AdCare's mission is to provide quality healthcare services to the elderly. For more information about AdCare, visit www.adcarehealth.com.

Safe Harbor Statement

Statements contained in this press release that are not historical facts may be forward-looking statements within the meaning of federal law, which can be identified by the use of forward-looking terminology such as "believes," "expects," "plans" or similar expressions. Statements in this announcement that are forward-looking include, but are not limited to statements made by Mr. Tenwick or Mr. Brogdon that recent negotiations to acquire two nursing facilities are expected to close in the second quarter under favorable financing terms and expand the company's bottom line while adding more than 60% to its annualized top line, and that the foundation the company laid in 2009 will make 2010 another milestone year 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 also 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.

              ADCARE HEALTH SYSTEMS, INC. AND SUBSIDIARIES
                  CONSOLIDATED STATEMENTS OF OPERATIONS
                              (unaudited)


                                                        Year Ended
                                                       December 31,
                                                --------------------------
                                                    2009          2008
                                                ------------  ------------
Revenues:
  Patient care revenues                         $ 24,834,831  $ 23,008,754
  Management, consulting and development fee
   revenue                                         1,856,269     1,784,540
                                                ------------  ------------
    Total revenue                                 26,691,100    24,793,294
                                                ------------  ------------

Expenses:
  Payroll and related payroll costs               15,371,150    15,649,862
  Other operating expenses                         8,626,987     8,248,157
  Depreciation and amortization                      918,851       882,900
                                                ------------  ------------
    Total expenses                                24,916,988    24,780,919
                                                ------------  ------------

Income from Operations                             1,774,112        12,375
                                                ------------  ------------
Other Income (Expense):
  Interest income                                      5,472        23,287
  Interest expense, others                        (1,207,749)   (1,265,622)
  Interest expense, related parties                   (2,177)      (36,446)
  Other (expense) income                             (46,745)        4,200
                                                ------------  ------------
    Total other (expenses)                        (1,251,199)   (1,274,581)
                                                ------------  ------------

Gain on Acquisition                                        -       413,954
                                                ------------  ------------

Income (Loss) Before Income Taxes                    522,913      (848,252)
Income Tax (Expense)                                 (42,567)     (170,007)
                                                ------------  ------------
Net Income (Loss)                                    480,346    (1,018,259)
Net (Income) Attributable to Noncontrolling
 Interests                                           (40,063)      (57,919)
                                                ------------  ------------
Net Income (Loss) Attributable to AdCare Health
 Systems                                        $    440,283  $ (1,076,178)
                                                ============  ============

Net Income (Loss) Per Share, Basic:             $       0.11  $      (0.28)
                                                ============  ============
Net Income (Loss) Per Share, Diluted:           $       0.10  $      (0.28)
                                                ============  ============

Weighted Average Common Shares Outstanding,
  Basic                                            3,917,286     3,786,129
                                                ============  ============
  Diluted                                          4,425,631     3,786,129
                                                ============  ============




             ADCARE HEALTH SYSTEMS, INC. AND SUBSIDIARIES
                      CONSOLIDATED BALANCE SHEETS
                              (unaudited)


                                                       December 31,
                                                --------------------------
                 ASSETS                             2009          2008
                                                ------------  ------------
Current Assets:
Cash                                            $  4,481,100  $  1,266,315
Accounts receivable:
  Long-term care resident receivables, net         1,838,560     2,008,847
  Management, consulting and development
   receivables, net                                  124,761       258,811
  Advances and receivables from affiliates            16,407        17,635
Prepaid expenses and other                           541,958       478,534
                                                ------------  ------------
      Total current assets                         7,002,786     4,030,142
                                                ------------  ------------

Restricted cash                                    1,430,674     1,155,596
Property and equipment, net                       16,445,028    16,772,660
License, net                                       1,189,307     1,189,307
Goodwill                                           2,679,482     2,679,482
Other assets                                       1,357,160     1,012,340
                                                ------------  ------------
      Total assets                              $ 30,104,437  $ 26,839,527
                                                ============  ============

      LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities:
  Current portion of notes payable and other
   debt                                         $    698,504  $    713,323
  Current portion of notes payable to
   stockholder                                         9,432         9,432
  Accounts payable                                 1,039,422     1,009,002
  Accrued expenses                                 2,597,151     2,838,407
                                                ------------  ------------
      Total current liabilities                    4,344,509     4,570,164
                                                ------------  ------------

Notes payable and other debt, net of current
 portion                                          16,701,028    16,974,788
Notes payable to stockholder, net of current
 portion                                              24,444        34,626
Other liabilities                                    746,074       299,314
Income tax payable                                   212,574       170,007
                                                ------------  ------------
    Total liabilities                             22,028,629    22,048,899

Stockholders' equity:
  Preferred stock, no par value; 500,000 shares
   authorized; no shares issued or outstanding             -             -
  Common stock and additional paid-in capital,
   no par value; 14,500,000 shares authorized;
   5,360,007 shares issued and outstanding        17,571,801    14,766,967
  Accumulated deficit                             (9,805,249)  (10,245,532)
                                                ------------  ------------
    Total stockholders' equity                     7,766,552     4,521,435
  Noncontrolling interest in subsidiaries            309,256       269,193
                                                ------------  ------------
    Total equity                                   8,075,808     4,790,628
                                                ------------  ------------
    Total liabilities and stockholders' equity  $ 30,104,437  $ 26,839,527
                                                ============  ============


Contact Information

  • Company Contact
    David A. Tenwick, Chairman
    AdCare Health Systems, Inc.
    Tel (740) 549-0400
    Email: Email Contact

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