SOURCE: AdCare Health Systems, Inc.

AdCare Health Systems, Inc.

November 13, 2012 16:01 ET

AdCare Health Systems Reports Record Third Quarter 2012 Results

Revenues up 52% to Record $61.8 Million, Driving Record Adjusted EBITDA From Continuing Operations of $6.5 Million

ATLANTA, GA--(Marketwire - Nov 13, 2012) - AdCare Health Systems, Inc. (NYSE MKT: ADK), a leading long-term care provider, reported results for the third quarter ended September 30, 2012.

Q3 2012 Financial Highlights

  • Record revenues of $61.8 million, up 12% sequentially and up 52% from Q3 2011.

  • Income from operations was a record $4.0 million, up $2.2 million from Q3 2011.

  • Net income attributable to AdCare in the third quarter of 2012, before a $2.1 million non-cash derivative charge, increased to $403,000, or $0.03 per share, versus $326,000, or $0.02 per share, in the second quarter of 2012.

  • Including the non-cash derivative charge, net loss attributable to AdCare in the third quarter of 2012 totaled $1.7 million or $(0.11) per share. This compares to net income of $679,000, or $0.05 per share, in the second quarter of 2012 which included a non-cash derivative gain of $353,000 (see, "About the Derivative Liability," below for more information.)

  • Adjusted EBITDA from continuing operations was a record $6.5 million, up 8% sequentially and 127% versus Q3 2011.

  • Acquisitions completed during the quarter added $16.7 million in estimated annualized revenue run-rate.

"Our skilled nursing acquisition and optimization strategy once again drove strong quarterly results," said AdCare's president and chief executive officer, Boyd P. Gentry. "In fact, Q3 produced records in total revenues, income from operations and Adjusted EBITDA from continuing operations, and without the non-cash derivative charge, net income would have increased over the same year-ago quarter. Our optimization strategy involves improving the level of care, occupancy and Medicare payer mix of newly acquired facilities. We expect this strategy to continue to drive strong overall Adjusted EBITDA from continuing operations, which has generated year-over-year increases since we began our M&A program in the summer of 2010."

Q3 2012 Operational Highlights

  • Acquired three skilled nursing facilities: One in Georgia with 134 beds in service and an estimated $6.4 million in gross annualized revenues, and two in Oklahoma, with an aggregate of 230 beds in service and an estimated $10.3 million in gross annualized revenues.

  • Signed purchase agreements for two skilled nursing facilities: One in Arkansas with a projected 70 beds in service and a projected estimated $8.5 million in gross annualized revenues (based on management expectations), and one in South Carolina with 84 beds in service and an estimated $3.8 million in gross annualized revenues.

The stated gross annualized revenues of facilities acquired or put under contract are according to their most recent financial statements, unless otherwise indicated.

Q3 2012 Summary of Financial Results
Revenues in the third quarter of 2012 increased 52% to a record $61.8 million from $40.5 million in the same year-ago quarter. The increase in revenue was primarily due to acquisitions completed since September 1, 2011 as part of AdCare's M&A program. The company's skilled nursing facilities existing prior to that date also contributed to the improvement in revenue due to cost savings measures and Medicaid rate improvement. A more detailed discussion and analysis of the company's performance will be available in AdCare's Form 10-Q for the quarter ended September 30, 2012 as filed with the Securities and Exchange Commission.

Income from operations in the third quarter of 2012 was a record $4.0 million, increasing 119% from $1.8 million in the third quarter of 2011. The increase in income from operations was due to revenue optimization and expense controls, as well as from newly acquired facilities. The company's cost of services as a percentage of patient care revenues decreased to 80.1% in the third quarter of 2012 from 81.2% in the same year-ago quarter.

Including a non-cash derivative loss of $2.1 million, net loss attributable to AdCare in the third quarter of 2012 totaled $1.7 million or $(0.11) per basic and diluted share. This compares to a net gain of $3.5 million, or $0.27 per diluted share, in the same year-ago quarter, which included a non-cash derivative gain of $4.7 million.

Adjusted EBITDA from continuing operations in the third quarter of 2012 totaled a record $6.5 million, up 8% from $6.0 million in the second quarter of 2012 (see "Use of Non-GAAP Financial Information," below for the definition of Adjusted EBITDA from continuing operations, a non-GAAP financial metric, as well as an important discussion about the use of this metric and its reconciliation to GAAP net income, the most directly comparable GAAP financial measure.)

Combined cash, current restricted cash and cash equivalents at September 30, 2012 totaled $12.7 million, as compared to $9.2 million at December 31, 2011.

Q3 Total Facility Count
At the end of the third quarter of 2012, the company, through its subsidiaries, operated or managed 51 facilities comprised of 41 skilled nursing centers, nine assisted living residences and one independent living/senior housing facility, with a total of 4,791 beds/units in service. Of these 51 facilities, 29 are owned, 12 are leased, six are consolidated variable interest entities, and four are managed for third parties. The facilities are located in Georgia, Arkansas, Ohio, Oklahoma, Alabama, North Carolina and Missouri.

Subsequent to the end of the third quarter, AdCare signed a definitive agreement to sell six assisted living facilities in Ohio for $22.3 million. The six facilities have an aggregate of 196 units in service. The transaction is expected to be complete before the end of the year. The company estimates that cash consideration received at closing will be approximately $6.7 million.

Chris Brogdon, AdCare's vice chairman, commented: "Excluding the facilities we're divesting, AdCare has put under contract 45 facilities since we began our M&A campaign and 14 since the beginning of 2012. Selling the six assisted living facilities in Ohio allows us to focus on our core skilled nursing competencies, strengthen our balance sheet, and provide capital to advance our very fruitful acquisition program."

Before the end of the year, AdCare plans to complete the acquisition of two facilities in South Carolina and one facility in Arkansas that it has already placed under contract.

Combining the company's current annualized run-rate with transactions in the process of closing, AdCare's estimated annualized revenue run-rate is expected to exceed $300 million. This would represent an increase of nearly 100% over the company's revenues in 2011, and an increase of more than 11 times revenues since initiating its M&A campaign.

Conference Call and Webcast
AdCare will hold a conference call to discuss its third quarter 2012 financial results tomorrow, Wednesday, November 14, 2012 at 8:30 a.m. Eastern time. Management will host the presentation, followed by a question and answer period.

Date: Wednesday, November 14, 2012
Time: 8:30 a.m. Eastern time (5:30 a.m. Pacific time)
Dial-In Number: 1-877-941-1427
International: 1-480-629-9664
Conference ID#: 4567193
Webcast: http://edge.media-server.com/m/p/7jw73smf/lan/en

The conference call will be webcast live and available for replay via the investors section of the company's website at www.adcarehealth.com.

Please call the conference telephone number 5-10 minutes prior to the start time. An operator will register your name and organization. If you have any difficulty connecting with the conference call, please contact Liolios Group at 949-574-3860.

A replay of the call will be available after 11:30 a.m. Eastern time on the same day and until December 14, 2012.

Toll-free replay number: 1-877-870-5176
International replay number: 1-858-384-5517
Replay pin number: 4567193

Summary of Closed and Pending Transactions Since Start of M&A Program

ALF = Assisted Living Facility SNF = Skilled Nursing Facility ARR= Annualize Revenue Run-rate1

Facility Type Count Beds/ Units Location   Transaction Type   ARR 1 Finance Terms   Completion Status
ALF 3 72 beds Ohio   Purchase (Remaining 50%)   $3.2M Cash   Closed 3-31-10
ALF 1 104 Units Hoover, AL   Consol. Variable Interest Entity (CVIE)   $1.4M 1-yr purchase option, expiring June 2013   Signed option to purchase. Currently a CVIE (Since 7/1/10)
SNF 5 600 beds Georgia   Lease   $38.8M 10-yr lease   Closed 7-30-10
SNF 3 269 beds Georgia   Lease   $18.4M 10-yr lease (combined with the above)   Closed 9-2-10
SNF 2 304 beds Alabama   Purchase   $19.5M Long-term fixed rate loan, USDA-backed   Closed 10-1-10
SNF 2 299 beds Atlanta, GA   Lease   $20.8M 12-yr lease with renewal option   Closed 11-2-10
SNF 1 106 beds Sylva, NC   Purchase   $8.0M Long-term fixed rate loan (USDA-backed)   Closed 12-31-10
SNF 3 329 beds Atlanta & Dublin, GA   Purchase   $18.0M Long-term fixed rate loan (USDA,SBA-backed and bank loans)   Closed two 5-1-2011; Closed third on 6-1-2011
SNF 5 314 beds Oklahoma   CVIE   $12.7M Long-term loan (SBA-backed)   Currently a CVIE (since 8-1-11)
SNF 5 482 beds Arkansas & Missouri   Purchase (four) and Lease (one)   $27.5M Long-term fixed rate loan (USDA-backed and bank loans), one 36 month lease   Closed purchases 9-8-11; closed lease 11-1-11
ALF & SNF 2 128 beds Mountain View, AR   Purchase   $5.4M Long-term loan (USDA-backed bank loan)   Closed 12-2-11
ALF & SNF 2 179 beds Springfield, OH   Purchase   $12.0M 30-year, fixed-rated, tax-exempt bond issuance, and bank loan   Closed 12-30-11
SNF 3 434 beds Arkansas   Purchase   $15.9M Bank loan   Closed 3-30-12
SNF 1 77 beds Arkansas   Purchase   $3.3M Bank loan   Closed 4-30-12
SNF 1 134 beds Glennville, GA   Purchase   $6.4M Long-term bank loan (USDA-backed)   Closed 7-2-12
SNF 1 109 beds Oklahoma City, OK   Purchase   $4.1M Long-term bank loan (SBA-backed)   Closed 7-3-12
SNF 1 121 beds Tulsa, OK   Purchase   $6.2M Bank loan   Closed 8-17-12
SNF (Pending) 1 96 beds Sumter, SC   Purchase   $6.7M SBA regular bank loan   Closing Expected Q4-12
SNF (Pending) 1 70 beds Cabot, Arkansas   Purchase   $8.5M Traditional bank loan   Closing Expected Q4-12
SNF (Pending) 1 84 beds Georgetown, SC   Purchase   $3.8M Traditional bank loan   Closing Expected Q4-12
SNF (Pending) 4 350 beds Oklahoma   Purchase   $10.5M Long-term bank loan (SBA-backed)   Closing Expected Q1-13
Total Closed 41 4,061         $221.6M      
Total Pending 7 600         $29.5M      
Grand Total 48 4,661         $251.1M      

1Annualized Revenue Run-rate (ARR) is estimated based on the most recent financial statement provided at the time of signing the purchase or lease agreement. ARR for facilities held at least 12 months is based on most recent quarter. Actual results may vary considerably.

Stock Dividend
On October 22, 2012, AdCare issued a 5% stock dividend to all AdCare shareholders of record on October 8, 2012.

About the Derivative Liability
The derivative liability is the result of the Company issuing subordinated convertible notes in 2010 that include an anti-dilution provision referred to as a "ratchet" provision. The derivative liability is a non-cash item. The notes are convertible into shares of common stock of the Company at a current conversion price of $3.73 (adjusted for various stock dividends) that is subject to future reductions if the Company issues equity instruments at a lower price (the "ratchet" provision). Because there is no minimum conversion price, an indeterminate number of shares may be issued in the future. Accordingly, the Company determined an embedded derivative existed that was required to be bifurcated from the subordinate convertible notes and accounted for separately as a derivative liability recorded at fair value. Pursuant to GAAP, the Company estimates the fair value of the derivative liability using the Black-Scholes Merton option-pricing model with changes in fair value being reported in the condensed consolidated statement of operations.

The Company currently has no plans to issue equity instruments at a price lower than the conversion price of $3.73, which would trigger the ratchet provision. These notes mature in October 2013 at which time the Company will be required to redeem them for cash (unless they are earlier converted into common stock at the option of the holder). Upon conversion to common stock, the debt and derivative liability will be extinguished, the current fair market value of the common stock will be reflected as common stock and additional paid-in capital, and there may be a resulting gain or loss on the debt extinguishment. If not converted to stock, upon settlement at the date of maturity, the debt and derivative liability will result in a gain on debt extinguishment for the remaining fair value of the derivative.

About AdCare Health Systems
AdCare Health Systems, Inc. (NYSE MKT: ADK) is a recognized provider of senior living and health care facility management. AdCare owns and manages, long-term care facilities and retirement communities, and since the company's inception in 1988, its mission has been to provide the highest quality of healthcare services to the elderly through its operating subsidiaries, including a broad range of skilled nursing and sub-acute care services. 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 statements 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: (i) statements that the company expects its optimization strategy to continue to drive strong overall Adjusted EBITDA from continuing operations; (ii) statements regarding the sale of six facilities; (iii) statements regarding the company's current plans to issue equity instruments; (iv) statements regarding the signing and closing of expected acquisitions; and (v) statements regarding the company's expected annualized run-rate. Such forward-looking statements reflect management's beliefs and assumptions and are based upon information currently available to management and involve known and unknown risks, results, performance or achievements of AdCare, which may differ materially from those expressed or implied in such statements. Such factors are identified in the public filings made by AdCare with the Securities and Exchange Commission and include, among others, AdCare'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 health care 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. Except where required by law, AdCare undertakes no obligation to revise or update any forward-looking statements to reflect events or circumstances after the date of this press release.

In addition, each facility mentioned in this press release is operated by a separate, wholly owned, independent operating subsidiary that has its own management, employees and assets.

References to the consolidated company and its assets and activities, as well as the use of terms such as "we," "us," "our," and similar verbiage, is not meant to imply that AdCare Health Systems, Inc. has direct operating assets, employees or revenue or that any of the facilities, the home health business or other related businesses are operated by the same entity.

Use of Non-GAAP Financial Information
Beginning with the reporting of results for the first quarter of 2011, the company began to report the measures of Adjusted EBITDA from continuing operations and Adjusted EBITDAR from continuing operations. These are measures of operating performance that are not calculated in accordance with U.S. generally accepted accounting principles ("GAAP"). The Company defines: (i) "Adjusted EBITDA from continuing operations " as net income (loss) from continuing operations before interest expense, income tax expense; depreciation and amortization (including amortization of non-cash stock-based compensation), acquisition costs (net of gains), loss on extinguishment of debt, derivative loss or gain, other non-routine adjustments (primarily a recovery of a receivable and a non-cash settlement gain), and retirement and salary continuation costs; and (ii) "Adjusted EBITDAR from continuing operations" as net income (loss) from continuing operations before interest expense; income tax expense, depreciation and amortization (including amortization of non-cash stock-based compensation), acquisition costs (net of gains), loss on extinguishment of debt, derivative loss; other non-routine adjustments (primarily a recovery of a receivable and a non-cash settlement gain), retirement and salary continuation costs and rent cost.

Adjusted EBITDA from continuing operations and Adjusted EBITDAR from continuing operations should not be considered in isolation or as a substitute for net income, income from operations or cash flows provided by, or used in, operations as determined in accordance with GAAP. Adjusted EBITDA from continuing operations and Adjusted EBITDAR from continuing operations are used by management to focus on operating performance and management without mixing in items of income and expense that relate to the financing and capitalization of the business, fixed rent or lease payments of facilities, derivative loss or gain, and certain acquisition related charges.

The company believes these measures are useful to investors in evaluating the company's performance, results of operations and financial position for the following reasons:

  • They are helpful in identifying trends in the company's day-to-day performance because the items excluded have little or no significance to the company's day-to-day operations;

  • They provide an assessment of controllable expenses and afford management the ability to make decisions which are expected to facilitate meeting current financial goals as well as achieve optimal financial performance; and

  • They are an indication to determine whether or not adjustments to current spending decisions are needed.

AdCare believes that the use of the measures provides a meaningful and consistent comparison of the company's underlying business between periods by eliminating certain items required by GAAP, which have little or no significance in the company's day-to-day operations.

   
ADCARE HEALTH SYSTEMS, INC. AND SUBSIDIARIES  
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS  
(Amounts in 000s, except per share data)  
(Unaudited)  
   
    Three Months Ended September 30,     Nine Months Ended September 30,  
    2012     2011     2012     2011  
Revenues:                                
    Patient care revenues   $ 61,342     $ 40,192     $ 165,793     $ 104,596  
    Management revenues     428       330       1,154       1,312  
      Total revenues     61,770       40,522       166,947       105,908  
                                 
Expenses:                                
    Cost of services (exclusive of facility rent, depreciation and amortization)     49,164       32,637       131,514       84,916  
    General and administrative     4,328       3,267       13,188       9,358  
    Facility rent expense     2,080       1,937       6,196       5,787  
    Depreciation and amortization     2,112       836       5,370       2,188  
    Salary retirement and continuation costs     38       --       38       622  
      Total expenses     57,722       38,677       156,306       102,871  
                                 
Income from Operations     4,048       1,845       10,641       3,037  
                                 
Other Income (Expense):                                
    Interest expense, net     (3,992 )     (2,223 )     (10,312 )     (5,511 )
    Acquisition costs, net of gains     (342 )     (1,147 )     (1,160 )     (789 )
    Derivative gain (loss)     (2,105 )     4,745       (1,342 )     807  
    Loss on extinguishment of debt     --       (58 )     --       (136 )
    Other income (expense)     271       (20 )     242       567  
      Total other income (expense), net     (6,168 )     1,297       (12,572 )     (5,062 )
                                 
Income (Loss) from Continuing Operations Before Income Taxes     (2,120 )     3,142       (1,931 )     (2,025 )
Income Tax Expense     (118 )     (204 )     (217 )     (414 )
Income (Loss) from Continuing Operations     (2,238 )     2,938       (2,148 )     (2,439 )
Loss from discontinued operations     (202 )     (158 )     (472 )     (285 )
Net Income (Loss)     (2,440 )     2,780       (2,620 )     (2,724 )
Net Loss Attributable to Noncontrolling Interests     738       748       1,390       1,090  
Net Income (Loss) Attributable to AdCare Health Systems   $ (1,702 )   $ 3,528     $ (1,230 )   $ (1,634 )
                                 
Net Income (Loss) per Common Share -- Basic:                                
  Continuing Operations   $ (0.10 )   $ 0.33     $ (0.05 )   $ (0.14 )
  Discontinued Operations     (0.01 )     (0.01 )     (0.03 )     (0.03 )
    $ (0.11 )   $ 0.32     $ (0.08 )   $ (0.17 )
Net Income (Loss) per Common Share -- Diluted:                                
  Continuing Operations   $ (0.10 )   $ 0.28     $ (0.05 )   $ (0.14 )
  Discontinued Operations     (0.01 )     (0.01 )     (0.03 )     (0.03 )
    $ (0.11 )   $ 0.27     $ (0.08 )   $ (0.17 )
   
   
ADCARE HEALTH SYSTEMS, INC. AND SUBSIDIARIES  
CONDENSED CONSOLIDATED BALANCE SHEETS  
(Amounts in 000s)  
   
    September 30,     December 31,  
    2012     2011  
    (Unaudited)        
ASSETS                
Current Assets:                
  Cash and cash equivalents   $ 9,884     $ 7,364  
  Restricted cash and cash equivalents     2,825       1,883  
  Accounts receivable, net of allowance of $3,099 and $1,346     30,397       18,759  
  Prepaid expenses and other     892       663  
  Assets of disposal group held for sale     --       47  
      Total current assets     43,998       28,716  
                 
Restricted cash and investments     5,748       4,870  
Property and equipment, net     166,708       105,143  
Intangible assets -- bed licenses, net     2,558       1,189  
Intangible assets -- lease rights, net     7,658       8,460  
Goodwill     906       906  
Escrow deposits for acquisitions     812       3,172  
Lease deposits     1,704       1,685  
Deferred loan costs, net     6,630       4,818  
Other assets     169       122  
      Total assets   $ 236,891     $ 159,081  
                 
LIABILITIES AND STOCKHOLDERS' EQUITY                
Current Liabilities:                
  Current portion of notes payable and other debt   $ 11,991     $ 4,567  
  Revolving credit facilities and lines of credit     1,363       7,343  
  Accounts payable     20,324       12,075  
  Accrued expenses     12,615       9,858  
  Liabilities of disposal group held for sale     --       240  
      Total current liabilities     46,293       34,083  
                 
Notes payable and other debt, net of current portion:                
  Senior debt, net of discounts     134,003       87,771  
  Convertible debt, net of discounts     22,746       14,614  
  Revolving credit facilities     9,076       1,308  
  Other debt     887       1,400  
Derivative liability     3,231       1,889  
Other liabilities     1,728       2,437  
Deferred tax liability     99       86  
    Total liabilities     218,063       143,588  
                 
      --       --  
                 
Stockholders' equity:                
  Preferred stock, no par value; 1,000 shares authorized; no shares issued or outstanding     --       --  
  Common stock and additional paid-in capital, no par value; 29,000 shares authorized; 14,657 and 12,802 shares issued and outstanding     41,002       35,047  
  Accumulated deficit     (19,943 )     (18,713 )
    Total stockholders' equity     21,059       16,334  
  Noncontrolling interest in subsidiaries     (2,231 )     (841 )
    Total equity     18,828       15,493  
    Total liabilities and stockholders' equity   $ 236,891     $ 159,081  
   
   
ADCARE HEALTH SYSTEMS, INC. AND SUBSIDIARIES  
CONSOLIDATED STATEMENTS OF OPERATIONS  
TRAILING FIVE QUARTERS  
(Amounts in 000s)  
(UNAUDITED)  
   
    For the Three Months Ended  
    9/30/2011     12/31/2011     3/31/2012     6/30/2012     9/30/2012  
Revenues:                                        
  Patient care revenues   $ 40,192     $ 45,137     $ 49,808     $ 54,642     $ 61,342  
  Management revenue     330       307       363       363       428  
Total revenues     40,522       45,444       50,171       55,005       61,770  
Expenses:                                        
  Cost of services     32,637       37,303       40,123       42,227       49,164  
  General and administrative     3,267       3,922       3,931       4,929       4,328  
  Facility rent expense     1,937       2,008       2,065       2,050       2,080  
  Depreciation and amortization     836       1,749       1,497       1,761       2,112  
  Salary retirement and continuation costs     -       830       -       -       38  
Total expenses     38,677       45,812       47,616       50,967       57,722  
Income (Loss) from Operations     1,845       (368 )     2,555       4,038       4,048  
Other Income (Expense):                                        
  Interest expense, net     (2,223 )     (2,688 )     (2,954 )     (3,366 )     (3,992 )
  Loss on extinguishment of debt     (58 )     (5 )     -       -       -  
  Derivative gain (loss)     4,745       151       410       353       (2,105 )
  Acquisition costs, net of gains     (1,147 )     (373 )     (293 )     (524 )     (342 )
  Other income (expense)     (20 )     (17 )     (16 )     (13 )     271  
Total other income (expense), net     1,297       (2,932 )     (2,853 )     (3,550 )     (6,168 )
Income (Loss) from Continuing Operations                                        
Before Income Taxes     3,142       (3,300 )     (298 )     488       (2,120 )
Income tax benefit (expense)     (204 )     151       (54 )     (45 )     (118 )
Income (Loss) from Continuing Operations     2,938       (3,149 )     (352 )     443       (2,238 )
Loss from discontinued operations, net of tax     (158 )     (1,679 )     (109 )     (160 )     (202 )
Net Income (Loss)     2,780       (4,828 )     (461 )     283       (2,440 )
Net Loss Attributable to Noncontrolling Interest     748       298       255       396       738  
Net Income (Loss) Attributable to AdCare Health Systems, Inc.   $ 3,528     $ (4,530 )   $ (206 )   $ 679     $ (1,702 )
   
   
ADCARE HEALTH SYSTEMS, INC. AND SUBSIDIARIES  
RECONCILIATION OF NET INCOME (LOSS) TO ADJUSTED EBITDA FROM CONTINUING  
OPERATIONS AND ADJUSTED EBITDAR FROM CONTINUING OPERATIONS  
(Amounts in 000s)  
(Unaudited)  
   
    For the Three Months Ended  
    9/30/2011     12/31/2011     3/31/2012     6/30/2012     9/30/2012  
                                         
Net Income (Loss)   $ 2,780     $ (4,828 )   $ (461 )   $ 283     $ (2,440 )
  Impact of discontinued operations     158       1,679       109       160       202  
Net Income (Loss) from continuing operations     2,938       (3,149 )     (352 )     443       (2,238 )
                                         
  Interest expense, net     2,223       2,688       2,954       3,366       3,992  
                                           
  Income tax (benefit) expense     204       (151 )     54       45       118  
  Amortization of stock based compensation     184       277       165       182       269  
                                           
  Depreciation and amortization     836       1,749       1,497       1,761       2,112  
                                           
  Acquisition costs, net of gains     1,147       373       293       524       342  
                                           
  Loss on extinguishment of debt     58       5       -       -       -  
                                           
  Derivative (gain) loss     (4,745 )     (151 )     (410 )     (353 )     2,105  
  Other non-routine Adjustments     -       -       -       -       (282 )
  Salary retirement and continuation costs     -       830       -       -       38  
Adjusted EBITDA from continuing operations     2,845       2,471       4,201       5,968       6,456  
                                         
  Facility rent expense     1,937       2,008       2,065       2,050       2,080  
Adjusted EBITDAR from continuing operations   $ 4,782     $ 4,479     $ 6,266     $ 8,018     $ 8,536  
   
   
ADCARE HEALTH SYSTEMS, INC. AND SUBSIDIARIES  
SUPPLEMENTARY SCHEDULES  
(Unaudited)  
   
    2011   2012   Nine Months YTD  
End of Period Data   Q3   Q4   Q1   Q2   Q3   9/30/11   9/30/12  
Number of Facilities                                            
  SNF                                            
  Owned     12     13     14     18     21              
  Leased     11     12     12     12     12              
  VIE     5     5     5     5     5              
  Managed     3     3     3     3     3              
ALF                                            
  Owned     6     7     8     8     8              
  VIE     1     1     1     1     1              
  Managed     0     0     0     0     0              
IL                                            
  Managed     1     1     1     1     1              
Total     39     42     44     48     51              
                                             
Number of Operational Beds  
SNF                                            
  Owned     1,241     1,337     1,436     1,947     2,311              
  Leased     1,262     1,342     1,342     1,342     1,342              
  VIE     314     314     314     314     314              
  Managed     379     329     329     329     329              
ALF                                            
  Owned     196     228     308     308     308              
  VIE     104     104     104     104     104              
  Managed     0     0     0     0     0              
IL                                            
  Managed     83     83     83     83     83              
Total     3,579     3,737     3,916     4,427     4,791              
                                             
SNF + ALF % Owned     59.5 %   59.6 %   61.7 %   66.6 %   69.4 %            
SNF + ALF % Leased     40.5 %   40.4 %   38.3 %   33.4 %   30.6 %            
                                             
Revenue Mix (a)  
  Skilled (c)     30.8 %   29.9 %   31.0 %   29.4 %   26.8 %   32.0 %   28.9 %
  Medicaid     56.7 %   56.9 %   54.8 %   55.6 %   58.4 %   56.0 %   56.4 %
  Private + Other     12.5 %   13.2 %   14.2 %   15.0 %   14.8 %   12.0 %   14.7 %
                                             
Patient Days (a)  
  Skilled (c)     24,723     29,543     32,633     34,005     35,463     68,607     102,101  
  Medicaid     146,203     164,723     167,486     182,087     206,034     369,394     555,607  
  Private + Other     20,782     25,807     28,075     31,264     36,026     46,845     95,365  
Total     191,708     220,073     228,194     247,356     277,523     484,846     753,073  
                                             
Patient Day Mix (a)  
  Skilled (c)     12.9 %   13.4 %   14.3 %   13.7 %   12.8 %   14.2 %   13.6 %
  Medicaid     76.3 %   74.8 %   73.4 %   73.5 %   74.2 %   76.2 %   73.8 %
  Private + Other     10.8 %   11.8 %   12.3 %   12.8 %   13.0 %   9.6 %   12.6 %
                                             
Revenue Rates Per Patient Days (a)  
  Skilled (c)   $ 469.60   $ 430.64   $ 442.03   $ 443.46   $ 437.54   $ 453.59   $ 440.95  
  Medicaid   $ 146.44   $ 146.99   $ 152.21   $ 156.33   $ 164.42   $ 147.65   $ 158.09  
  Private + Other   $ 172.90   $ 167.20   $ 171.85   $ 170.56   $ 165.82   $ 189.81   $ 169.15  
Weighted Average Total   $ 196.80   $ 193.34   $ 203.97   $ 207.11   $ 208.91   $ 200.85   $ 206.82  
                                             
Average Daily Census (a)  
  Skilled (c)     304     330     359     378     390     313     412  
  Medicaid     1,798     1,839     1,841     2,020     2,264     1,688     2,240  
  Private + Other     255     290     308     350     396     214     385  
Total Average Daily Census     2,357     2,459     2,508     2,748     3,050     2,215     3,037  
                                             
Occupancy (a)     85.4 %   82.5 %   81.1 %   76.5 %   77.2 %   86.2 %   78.1 %
                                             
(000s)                                            
Total Revenues (b)   $ 40,522   $ 45,444   $ 50,171   $ 55,005   $ 61,770   $ 105,908   $ 166,947  
Adjusted EBITDAR (b)   $ 4,782   $ 4,479   $ 6,266   $ 8,018   $ 8,536   $ 12,311   $ 22,822  
Adjusted EBITDA (b)   $ 2,845   $ 2,471   $ 4,201   $ 5,968   $ 6,456   $ 6,524   $ 16,626  
                                             

(a) Skilled nursing only - excludes managed facilities
(b) AdCare consolidated incorporating discontinued operation
(c) Skilled is defined as Medicare change + managed Care RUGs

Contact Information

  • Company Contacts
    Boyd Gentry, CEO
    Chris Brogdon, Vice Chairman
    David A. Tenwick, Chairman of Board
    AdCare Health Systems, Inc.
    Tel (678) 869-5116
    Email Contact

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