Attached files
| file | filename |
|---|---|
| 8-K - ADK 8-K 032714 - REGIONAL HEALTH PROPERTIES, INC | adk8k032714.htm |
| EX-99.2 - EXHIBIT 99.2 EARNINGS CALL SLIDES - REGIONAL HEALTH PROPERTIES, INC | exhibit992earningscallsl.htm |
Exhibit 99.1
AdCare Health Systems Reports Continued Progress for Fourth Quarter and Full Year 2013
Revenue Increases 14.8% for Full Year 2013 and 4.6% for the Fourth Quarter;
Full Year EBITDAR Increases 11.9% to $19.4 Million
ATLANTA, GA, March 28, 2014-AdCare Health Systems, Inc. (NYSE MKT: ADK), (NYSE MKT: ADK.PA) a leading long-term care provider, reported results for the fourth quarter and full year ended December 31, 2013.
Fourth Quarter 2013 Financial Highlights
Ÿ | Revenues were $55.6 million, up 4.6% compared to $53.1 million in the year-ago period. |
• | Adjusted EBITDAR was $5.3 million, up 105.7% compared to $2.6 million in the prior-year fourth quarter (see “Use of Non-GAAP Financial Information,” below for more information). |
• | AdCare generated $2.5 million in cash flow from operations. |
• | Board of Directors declared a quarterly cash dividend payment of $0.68 per share on the Company's 10.875% Series A Preferred Stock which was paid on December 31, 2013 to holders of record at the close of business on December 20, 2013. |
Full Year 2013 Financial Highlights
• | Revenues were up 14.8% to $222.9 million from $194.1 million in the year-ago period. |
• | Adjusted EBITDAR was $19.4 million, an increase of 11.9% compared to $17.4 million in the prior year (see “Use of Non-GAAP Financial Information,” below for more information). |
• | AdCare’s full-year financial results included a non-cash derivative gain of $3.0 million compared to a $1.7 million loss in the prior year (see, "About the Derivative Liability," below for more information) along with approximately $2.4 million in expenses related to the audit committee review and inquiry. |
Key Financial Metrics ($ in thousands)
Q1 2012 | Q2 2012 | Q3 2012 | Q4 2012 | FY 2012 | Q1 2013 | Q2 2013 | Q3 2013 | Q4 2013 | FY 2013 | |||||||||||||||||||||
Revenue | $ | 41,647 | $ | 46,514 | $ | 52,786 | $ | 53,129 | $ | 194,077 | $ | 55,802 | $ | 56,010 | $ | 55,477 | $ | 55,558 | $ | 222,847 | ||||||||||
% growth - sequential | 11.8 | % | 11.7 | % | 13.5 | % | 0.6 | % | 53.9 | % | 5.0 | % | 0.4 | % | (1.0 | )% | 0.1 | % | 14.8 | % | ||||||||||
% growth - y/y | n/a | n/a | n/a | 42.6 | % | 53.9 | % | 34.0 | % | 20.4 | % | 5.1 | % | 4.6 | % | 14.8 | % | |||||||||||||
Cost of Services | $ | 34,367 | $ | 36,122 | $ | 44,105 | $ | 46,106 | $ | 160,700 | $ | 47,203 | $ | 47,046 | $ | 45,677 | $ | 45,687 | $ | 185,162 | ||||||||||
% of patient care revenue | 83.6 | % | 78.5 | % | 84.5 | % | 87.6 | % | 83.7 | % | 85.4 | % | 84.7 | % | 83.1 | % | 83.1 | % | 84.1 | % | ||||||||||
Adjusted EBITDAR | $ | 3,517 | $ | 6,279 | $ | 4,994 | $ | 2,579 | $ | 17,369 | $ | 3,932 | $ | 4,749 | $ | 5,403 | $ | 5,307 | $ | 19,391 | ||||||||||
% of total revenue | 8.4 | % | 13.5 | % | 9.5 | % | 4.9 | % | 8.9 | % | 7.0 | % | 8.5 | % | 9.7 | % | 9.6 | % | 8.7 | % | ||||||||||
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“We posted steady revenue growth in 2013 as we continue to build momentum from our efforts to expand our portfolio and certain enhancement programs within all of our facilities,” said Boyd Gentry, AdCare’s president and chief executive officer. “We continue to make incremental, measurable progress in our efforts to improve operations and overall efficiency, as evidenced by a 105.7% year-over-year improvement in Adjusted EBITDAR. Our focus is on growing occupancy rates, and doing so with the optimal mix of patients. We will achieve this goal by working closely with regional hospitals and deploying new programs that meet the changing needs of these hospitals. This strategy fully supports our existing model, with facilities clustered in key markets enabling us to use regionalized support staff to improve efficiencies. The end result of this strategy should be an optimization of our existing infrastructure, and greater visibility into our future revenues.”
Q4 and 2013 Full Year Summary of Financial Results
Revenues in the fourth quarter of 2013 were $55.6 million, up 4.6% from $53.1 million in the prior year quarter. Revenue for the full year 2013 increased by 14.8% to $222.9 million from $194.1 million in 2012.
The net loss attributable to AdCare common shareholders in the fourth quarter of 2013 totaled $3.7 million or $(0.24) per basic and diluted share, compared to a net loss of $0.1 million, or $(0.01) per basic and diluted share, in the same year-ago quarter. Several non-recurring and non-operational expenses impacted the net loss for both periods, including:
Q4 2013
• | A $799,000 goodwill impairment charge related to a facility acquired in 2012 |
• | An $829,000 non-cash derivative gain |
• | $91,000 in non-recurring expense related to the Company’s reincorporation in Georgia |
• | $102,000 in non-recurring expense related to the audit committee’s investigation |
• | $202,000 related to the Company’s annual shareholder meeting |
Q4 2012
• | A $0.4 million non-cash derivative loss |
• | A $6.7 million net gain on sale of four Ohio assisted living facilities |
For the full year 2013, the net loss attributable to AdCare common stockholders was $14.1 million or ($0.94) per basic and diluted share, versus a net loss of $7.0 million or $(0.50) per basic and diluted share in 2012.
“Quarterly cost of services declined to 83.1% of revenues in the fourth quarter of 2013 compared to 87.6% of revenues in the prior year quarter due to our cost containment efforts,” commented Ronald Fleming, AdCare’s chief financial officer. “In addition, the costs related to the audit committee review, as well as the fluctuations from the derivative, are now behind us, resulting in a simpler financial profile going forward.”
Adjusted EBITDAR from continuing operations in the fourth quarter of 2013 totaled $5.3 million, a more than two-fold increase compared to $2.6 million in the fourth quarter of 2012. Adjusted EBITDAR from continuing operations for the full year 2013 totaled $19.4 million compared to $17.3 million for the full year 2012 (see “Use of Non-GAAP Financial Information,” below for the definition of Adjusted EBITDA from continuing operations and Adjusted EBITDAR from continuing operations, each, non-GAAP financial measures, as well as an important discussion about
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the use of these measures and their reconciliation to GAAP net loss, the most directly comparable GAAP financial measure).
Outlook
Management provided its outlook for fiscal 2014. This guidance is based on current expectations, and is subject to change. Currently, management expects:
• | Revenue of $225 million to $250 million, representing 3% to 12% growth compared to fiscal 2013. This is inclusive of the impact of lower revenues due to the Company exiting non-core facilities which AdCare manages but does not own. |
• | Year-over-year improvement in gross profit, operating income, and EBITDAR in actual dollars and as a percent of sales. |
Conference Call and Webcast
AdCare will hold a conference call to discuss its fourth quarter and 2013 full year financial results on Friday, March 28, 2014 at 10 a.m. Eastern time. Management will host the presentation, followed by a question and answer period.
• |
• | Date and time: Friday, March 28, 2014 at 10 a.m. ET |
• | Dial-in number: 1-877-941-1427 (domestic) or 1-480-629-9664 (international) |
• | Replay number: Dial 1-877-870-5176 (domestic) or 1-858-384-5517 (international). Please use passcode 4649187 to access the replay. The replay will be available until April 28, 2014. |
• | Webcast link: www.adcarehealth.com or http://public.viavid.com/index.php?id=108329 |
• | Slides: Management will provide slides to accompany the prepared comments. Slides will be available on the webcast, or can be downloaded in the investor relations section of AdCare’s website at www.adcarehealth.com. |
About the Derivative Liability
The derivative liability is the result of the Company issuing subordinated convertible promissory 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 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 subordinated convertible promissory 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.
These notes , which had an original maturity date of October 26, 2013, were extended to August 29, 2014 and the anti-dilution provision was eliminated so there will not be a derivative gain or loss recorded after Q4 13. At maturity, the Company will be required to redeem the notes for cash (unless they are earlier converted into common stock at the option of the holder). If the notes are converted, to common stock, the debt 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.
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About AdCare Health Systems
AdCare Health Systems, Inc. (NYSE MKT: ADK) (NYSE MKT: ADK.PRA) 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 regarding drivers of operational growth; (ii) statements regarding expense reductions and expense run-rate; (iii) statements regarding improvements in the admissions process; (iv) statements regarding financial and operational improvements; and (v) statements regarding the Company’s current plans to issue equity instruments. 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, AdCare’s ability to refinance its current debt on more favorable terms, AdCare’s ability to expand its borrowing arrangement with certain existing lenders, AdCare’s ability to raise equity capital, AdCare’s ability to improve operating results, 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 is 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,
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derivative loss or gain and other non-routine adjustments; 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 and other non-routine adjustments.
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 and other non-routine adjustments.
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:
Ÿ | 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; |
Ÿ | 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 |
Ÿ | They provide data that assists management 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.
Company Contacts Investor Relations
Boyd Gentry, CEO Brett Maas, Managing Partner
AdCare Health Systems, Inc. Hayden IR
Tel (678) 869-5116 Tel (646) 536-7331
info@adcarehealth.com brett@haydenir.com
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ADCARE HEALTH SYSTEMS, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(Amounts in 000’s, except per share data)
(Unaudited)
Three Months Ended December 31, | Twelve Months Ended December 31, | ||||||||||||||
2013 | 2012 | 2013 | 2012 | ||||||||||||
Revenues: | |||||||||||||||
Patient care revenues | $ | 54,990 | $ | 52,611 | $ | 220,750 | $ | 191,921 | |||||||
Management revenues | 568 | 519 | 2,097 | 2,156 | |||||||||||
Total revenues | 55,558 | 53,129 | 222,847 | 194,077 | |||||||||||
Expenses: | |||||||||||||||
Cost of services (exclusive of facility rent, depreciation and amortization) | 45,687 | 46,106 | 185,612 | 160,700 | |||||||||||
General and administrative expense | 5,016 | 4,800 | 19,032 | 17,005 | |||||||||||
Audit committee investigation expense | 102 | — | 2,386 | — | |||||||||||
Facility rent expense | 1,772 | 1,790 | 7,028 | 7,068 | |||||||||||
Depreciation and amortization | 2,513 | 1,930 | 7,940 | 6,538 | |||||||||||
Salary retirement and continuation costs | — | 5 | 154 | 43 | |||||||||||
Total expenses | 55,089 | 54,631 | 222,152 | 191,354 | |||||||||||
Income from Operations | 469 | (1,502 | ) | 695 | 2,723 | ||||||||||
Other Income (Expense): | |||||||||||||||
Interest expense, net | (3,025 | ) | (3,618 | ) | (12,888 | ) | (12,687 | ) | |||||||
Acquisition costs, net of gains | 45 | (802 | ) | (562 | ) | (1,962 | ) | ||||||||
Derivative gain (loss) | 829 | (399 | ) | 3,006 | (1,741 | ) | |||||||||
(Loss) gain on extinguishment of debt | (77 | ) | — | (109 | ) | 500 | |||||||||
Loss on impairment | (799 | ) | — | (799 | ) | — | |||||||||
(Loss) gain on disposal of assets | — | — | (10 | ) | 2 | ||||||||||
Other (expense) income | (321 | ) | 134 | (306 | ) | (124 | ) | ||||||||
Total other expense, net | (3,348 | ) | (4,685 | ) | (11,668 | ) | (16,012 | ) | |||||||
Loss from Continuing Operations Before Income Taxes | (2,879 | ) | (6,187 | ) | (10,973 | ) | (13,289 | ) | |||||||
Income tax benefit (expense) | (118 | ) | 35 | (142 | ) | (97 | ) | ||||||||
Loss from Continuing Operations | (2,997 | ) | (6,152 | ) | (11,115 | ) | (13,386 | ) | |||||||
(Loss) Income from Discontinued Operations, Net of Tax | (258 | ) | 6,009 | (2,248 | ) | 5,846 | |||||||||
Net Loss | (3,255 | ) | (143 | ) | (13,363 | ) | (7,540 | ) | |||||||
Net Loss Attributable to Noncontrolling Interests | 168 | 236 | 796 | 656 | |||||||||||
Net Loss Attributable to AdCare Health Systems, Inc. | (3,087 | ) | 93 | (12,567 | ) | (6,884 | ) | ||||||||
Preferred stock dividend | (646 | ) | (156 | ) | (1,564 | ) | (156 | ) | |||||||
Net Loss Attributable to AdCare Health Systems, Inc. Common Stockholders | $ | (3,733 | ) | $ | (62 | ) | $ | (14,131 | ) | $ | (7,040 | ) | |||
Net (loss) income per Common Share attributable to AdCare Health Systems, Inc. | |||||||||||||||
Common Stockholders - | |||||||||||||||
Basic: | |||||||||||||||
Continuing Operations | $ | (0.22 | ) | $ | (0.43 | ) | $ | (0.79 | ) | $ | (0.92 | ) | |||
Discontinued Operations | (0.02 | ) | 0.42 | (0.15 | ) | 0.42 | |||||||||
$ | (0.24 | ) | $ | (0.01 | ) | $ | (0.94 | ) | $ | (0.50 | ) | ||||
Diluted: | |||||||||||||||
Continuing Operations | $ | (0.22 | ) | $ | (0.43 | ) | $ | (0.79 | ) | $ | (0.92 | ) | |||
Discontinued Operations | (0.02 | ) | 0.42 | (0.15 | ) | 0.42 | |||||||||
$ | (0.24 | ) | $ | (0.01 | ) | $ | (0.94 | ) | $ | (0.50 | ) | ||||
Weighted Average Common Shares Outstanding: | |||||||||||||||
Basic | 15,746 | 14,215 | 15,044 | 14,033 | |||||||||||
Diluted | 15,746 | 14,215 | 15,044 | 14,033 | |||||||||||
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ADCARE HEALTH SYSTEMS, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(Amounts in 000’s)
December 31, | ||||||||
2013 | 2012 | |||||||
(unaudited) | ||||||||
ASSETS | ||||||||
Current assets: | ||||||||
Cash and cash equivalents | $ | 19,374 | $ | 15,937 | ||||
Restricted cash and investments | 3,801 | 1,742 | ||||||
Accounts receivable, net of allowance of $4,989 and $3,729 | 23,598 | 26,832 | ||||||
Prepaid expenses and other | 483 | 489 | ||||||
Assets of disposal group held for sale | 400 | 6,159 | ||||||
Assets of disposal group held for use | — | 778 | ||||||
Assets of variable interest entity held for sale | 5,945 | — | ||||||
Total current assets | 53,601 | 51,937 | ||||||
Restricted cash and investments | 11,606 | 7,215 | ||||||
Property and equipment, net | 143,368 | 151,007 | ||||||
Intangible assets - bed licenses | 2,471 | 2,471 | ||||||
Intangible assets - lease rights, net | 4,889 | 6,123 | ||||||
Goodwill | 4,224 | 5,023 | ||||||
Lease deposits | 1,715 | 1,720 | ||||||
Deferred loan costs, net | 4,542 | 6,137 | ||||||
Other assets | 12 | 3,611 | ||||||
Total assets | $ | 226,428 | $ | 235,244 | ||||
LIABILITIES AND EQUITY | ||||||||
Current liabilities: | ||||||||
Current portion of notes payable and other debt | $ | 12,027 | $ | 6,941 | ||||
Current portion of convertible debt, net of discounts | 11,389 | 10,948 | ||||||
Revolving credit facilities and lines of credit | 2,738 | 1,498 | ||||||
Accounts payable | 23,783 | 19,503 | ||||||
Accrued expenses | 13,264 | 14,525 | ||||||
Liabilities of disposal group held for sale | — | 3,662 | ||||||
Liabilities of variable interest entity held for sale | 6,034 | — | ||||||
Total current liabilities | 69,235 | 57,077 | ||||||
Notes payable and other debt, net of current portion: | ||||||||
Senior debt | 107,858 | 112,160 | ||||||
Bonds, net of discounts | 6,996 | 16,088 | ||||||
Revolving credit facilities | 5,765 | 7,706 | ||||||
Convertible debt, net of discounts | 7,500 | 12,009 | ||||||
Other debt | — | 864 | ||||||
Derivative liability | — | 3,630 | ||||||
Other liabilities | 1,589 | 1,394 | ||||||
Deferred tax liability | 191 | 104 | ||||||
Total liabilities | 199,134 | 211,032 | ||||||
Commitments and contingency | ||||||||
Preferred stock, no par value; 5,000 and 1,000 shares authorized; 950 and 450 shares issued and outstanding, redemption amount $23,750 and $11,250 at December 31, 2013 and 2012, respectively | 20,442 | 9,159 | ||||||
Stockholders’ equity: | ||||||||
Common stock and additional paid-in capital, no par value; 55,000 and 29,000 shares authorized; 16,016 and 14,659 shares issued and outstanding at December 31, 2013 and 2012, respectively | 48,370 | 41,644 | ||||||
Accumulated deficit | (39,884 | ) | (25,753 | ) | ||||
Total stockholders’ equity | 8,486 | 15,891 | ||||||
Noncontrolling interest in subsidiaries | (1,634 | ) | (838 | ) | ||||
Total equity | 6,852 | 15,053 | ||||||
Total liabilities and equity | $ | 226,428 | $ | 235,244 | ||||
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ADCARE HEALTH SYSTEMS, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
TRAILING SIX QUARTERS
(Amounts in 000’s)
(Unaudited)
For Three Months Ended | ||||||||||||||||||||||||
9/30/2012 | 12/31/2012 | 3/31/2013 | 6/30/2013 | 9/30/2013 | 12/31/2013 | |||||||||||||||||||
Revenues: | ||||||||||||||||||||||||
Patient care revenues | $ | 52,198 | $ | 52,611 | $ | 55,292 | $ | 55,512 | $ | 54,956 | $ | 54,990 | ||||||||||||
Management revenues | 588 | 519 | 510 | 498 | 521 | 568 | ||||||||||||||||||
Total revenues | 52,786 | 53,129 | 55,802 | 56,010 | 55,477 | 55,558 | ||||||||||||||||||
Expenses: | ||||||||||||||||||||||||
Cost of services (exclusive of facility rent, depreciation and amortization) | 44,105 | 46,106 | 47,203 | 47,046 | 45,677 | 45,687 | ||||||||||||||||||
General and administrative expense | 3,957 | 4,800 | 4,928 | 4,505 | 4,583 | 5,016 | ||||||||||||||||||
Audit committee investigation expense | — | — | 1,134 | 848 | 302 | 102 | ||||||||||||||||||
Facility rent expense | 1,775 | 1,790 | 1,737 | 1,758 | 1,761 | 1,772 | ||||||||||||||||||
Depreciation and amortization | 1,717 | 1,930 | 1,759 | 1,823 | 1,844 | 2,513 | ||||||||||||||||||
Salary retirement and continuation costs | 38 | 5 | — | 149 | 5 | — | ||||||||||||||||||
Total expenses | 51,592 | 54,631 | 56,761 | 56,129 | 54,172 | 55,089 | ||||||||||||||||||
Income (Loss) from Operations | 1,195 | (1,502 | ) | (959 | ) | (119 | ) | 1,304 | 469 | |||||||||||||||
Other Income (Expense): | ||||||||||||||||||||||||
Interest expense, net | (3,561 | ) | (3,618 | ) | (3,302 | ) | (3,221 | ) | (3,341 | ) | (3,025 | ) | ||||||||||||
Acquisition costs, net of gains | (342 | ) | (802 | ) | (97 | ) | (477 | ) | (33 | ) | 45 | |||||||||||||
Derivative gain (loss) | (2,105 | ) | (399 | ) | 2,136 | (1,947 | ) | 1,989 | 829 | |||||||||||||||
Gain (loss) on extinguishment of debt | 500 | — | (2 | ) | (25 | ) | (6 | ) | (77 | ) | ||||||||||||||
Loss on impairment | — | — | — | — | — | (799 | ) | |||||||||||||||||
Loss on disposal of assets | — | — | — | (4 | ) | (6 | ) | — | ||||||||||||||||
Other income (expense) | (229 | ) | 134 | — | — | 15 | (321 | ) | ||||||||||||||||
Total other expense, net | (5,737 | ) | (4,685 | ) | (1,264 | ) | (5,675 | ) | (1,381 | ) | (3,348 | ) | ||||||||||||
Loss from Continuing Operations Before Income Taxes | (4,542 | ) | (6,187 | ) | (2,223 | ) | (5,794 | ) | (77 | ) | (2,879 | ) | ||||||||||||
Income tax benefit (expense) | (112 | ) | 35 | (78 | ) | — | 54 | (118 | ) | |||||||||||||||
Loss from Continuing Operations | (4,654 | ) | (6,152 | ) | (2,301 | ) | (5,794 | ) | (23 | ) | (2,997 | ) | ||||||||||||
Income (Loss) Income from Discontinued Operations, Net of Tax | 14 | 6,009 | (449 | ) | (1,151 | ) | (390 | ) | (258 | ) | ||||||||||||||
Net Loss | (4,641 | ) | (143 | ) | (2,750 | ) | (6,945 | ) | (413 | ) | (3,255 | ) | ||||||||||||
Net Loss Attributable to Noncontrolling Interests | 134 | 236 | 192 | 241 | 195 | 168 | ||||||||||||||||||
Net Loss Attributable to AdCare Health Systems, Inc. | (4,507 | ) | 94 | (2,557 | ) | (6,704 | ) | (218 | ) | (3,087 | ) | |||||||||||||
Preferred stock dividend | — | (156 | ) | (306 | ) | (306 | ) | (306 | ) | (646 | ) | |||||||||||||
Net Loss Attributable to AdCare Health Systems, Inc. Common Stockholders | $ | (4,506 | ) | $ | (62 | ) | $ | (2,863 | ) | $ | (7,010 | ) | $ | (524 | ) | $ | (3,733 | ) | ||||||
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ADCARE HEALTH SYSTEMS, INC. AND SUBSIDIARIES
RECONCILIATION OF NET LOSS TO ADJUSTED EBITDA FROM CONTINUING OPERATIONS AND
ADJUSTED EBITDAR FROM CONTINUING OPERATIONS
(Amounts in 000’s)
(Unaudited)
For Three Months Ended | ||||||||||||||||||||||||
9/30/2012 | 12/31/2012 | 3/31/2013 | 6/30/2013 | 9/30/2013 | 12/31/2013 | |||||||||||||||||||
Net loss | $ | (4,641 | ) | $ | (143 | ) | $ | (2,750 | ) | $ | (6,945 | ) | $ | (413 | ) | $ | (3,255 | ) | ||||||
Impact of discontinued operations | (14 | ) | (6,009 | ) | 449 | 1,151 | 390 | 258 | ||||||||||||||||
Net loss from continuing operations | (4,654 | ) | (6,152 | ) | (2,301 | ) | (5,794 | ) | (23 | ) | (2,997 | ) | ||||||||||||
Interest expense, net | 3,561 | 3,618 | 3,302 | 3,221 | 3,341 | 3,025 | ||||||||||||||||||
Income tax expense (benefit) | 112 | (35 | ) | 78 | — | (54 | ) | 118 | ||||||||||||||||
Amortization of stock based compensation | 269 | 356 | 260 | 291 | 186 | 360 | ||||||||||||||||||
Depreciation and amortization | 1,717 | 1,930 | 1,759 | 1,823 | 1,844 | 2,513 | ||||||||||||||||||
Acquisition costs, net of gain | 342 | 802 | 97 | 477 | 33 | (45 | ) | |||||||||||||||||
Derivative (gain) loss | 2,105 | 399 | (2,136 | ) | 1,947 | (1,989 | ) | (829 | ) | |||||||||||||||
(Gain) loss on extinguishment of debt | (500 | ) | — | 2 | 25 | 6 | 77 | |||||||||||||||||
Loss on impairment - Goodwill | — | — | — | — | — | 799 | ||||||||||||||||||
Loss on disposal of assets | — | — | — | 4 | 6 | — | ||||||||||||||||||
Audit committee investigation expense | — | — | 1,134 | 848 | 302 | 102 | ||||||||||||||||||
Reincorporation - Georgia | — | — | — | — | — | 91 | ||||||||||||||||||
Other expense (income) | 229 | (134 | ) | — | — | (15 | ) | 321 | ||||||||||||||||
Salary retirement and continuation costs | 38 | 5 | — | 149 | 5 | — | ||||||||||||||||||
Adjusted EBITDA from continuing operations | 3,219 | 789 | 2,195 | 2,991 | 3,642 | 3,535 | ||||||||||||||||||
Facility rent expense | 1,775 | 1,790 | 1,737 | 1,758 | 1,761 | 1,772 | ||||||||||||||||||
Adjusted EBITDAR from continuing operations | $ | 4,994 | $ | 2,579 | $ | 3,932 | $ | 4,749 | $ | 5,403 | $ | 5,307 | ||||||||||||
Page 9
ADCARE HEALTH SYSTEMS, INC. AND SUBSIDIARIES
SUPPLEMENTARY SCHEDULES
(Unaudited)
2012 | 2013 | ||||||||||||||||||||||||||||||
End of Period Data | Q1 | Q2 | Q3 | Q4 | 12 Mo. YTD | Q1 | Q2 | Q3 | Q4 | 12 Mo. YTD | |||||||||||||||||||||
Number of Facilities | |||||||||||||||||||||||||||||||
SNF | |||||||||||||||||||||||||||||||
Owned | 17 | 18 | 21 | 24 | 24 | 24 | 24 | 24 | 24 | 24 | |||||||||||||||||||||
Leased | 9 | 9 | 9 | 9 | 9 | 9 | 9 | 9 | 9 | 9 | |||||||||||||||||||||
Managed | 10 | 10 | 10 | 10 | 10 | 10 | 10 | 10 | 10 | 10 | |||||||||||||||||||||
ALF | |||||||||||||||||||||||||||||||
Owned | 2 | 2 | 2 | 2 | 2 | 2 | 2 | 2 | 2 | 2 | |||||||||||||||||||||
IL | |||||||||||||||||||||||||||||||
Managed | 1 | 1 | 1 | 1 | 1 | 1 | 1 | 1 | 1 | 1 | |||||||||||||||||||||
Total | 39 | 40 | 43 | 46 | 46 | 46 | 46 | 46 | 46 | 46 | |||||||||||||||||||||
Number of Operational Beds | |||||||||||||||||||||||||||||||
SNF | |||||||||||||||||||||||||||||||
Owned | 1,870 | 1,947 | 2,311 | 2,579 | 2,579 | 2,579 | 2,579 | 2,579 | 2,579 | 2,579 | |||||||||||||||||||||
Leased | 1,090 | 1,090 | 1,090 | 1,090 | 1,090 | 1,090 | 1,090 | 1,090 | 1,090 | 1,090 | |||||||||||||||||||||
Managed | 813 | 813 | 813 | 813 | 813 | 813 | 813 | 813 | 813 | 813 | |||||||||||||||||||||
ALF | |||||||||||||||||||||||||||||||
Owned | 112 | 112 | 112 | 112 | 112 | 112 | 112 | 112 | 112 | 112 | |||||||||||||||||||||
IL | |||||||||||||||||||||||||||||||
Managed | 83 | 83 | 83 | 83 | 83 | 83 | 83 | 83 | 83 | 83 | |||||||||||||||||||||
Total at Period End | 3,968 | 4,045 | 4,409 | 4,677 | 4,677 | 4,677 | 4,677 | 4,677 | 4,677 | 4,677 | |||||||||||||||||||||
Total Weighted Average (d) | 2,638 | 3,097 | 3,453 | 3,513 | 3,177 | 3,781 | 3,781 | 3,781 | 3,781 | 3,781 | |||||||||||||||||||||
SNF + ALF % Owned | 64.5 | % | 65.4 | % | 69.0 | % | 71.2 | % | 71.2 | % | 71.2 | % | 71.2 | % | 71.2 | % | 71.2 | % | 71.2 | % | |||||||||||
SNF + ALF % Leased | 35.5 | % | 34.6 | % | 31.0 | % | 28.8 | % | 28.8 | % | 28.8 | % | 28.8 | % | 28.8 | % | 28.8 | % | 28.8 | % | |||||||||||
Revenue Mix % (b) | |||||||||||||||||||||||||||||||
Skilled (c) | 31.4 | % | 30.2 | % | 27.0 | % | 30.7 | % | 29.7 | % | 32.6 | % | 31.7 | % | 29.0 | % | 29.0 | % | 30.6 | % | |||||||||||
Medicaid | 53.3 | % | 54.0 | % | 57.0 | % | 53.4 | % | 54.5 | % | 52.1 | % | 53.3 | % | 53.8 | % | 53.4 | % | 53.1 | % | |||||||||||
Private + Other | 15.3 | % | 15.7 | % | 16.0 | % | 15.9 | % | 15.8 | % | 15.4 | % | 15.0 | % | 17.2 | % | 17.6 | % | 16.3 | % | |||||||||||
Total | 100.0 | % | 100.0 | % | 100.0 | % | 100.0 | % | 100.0 | % | 100.0 | % | 100.0 | % | 100.0 | % | 100.0 | % | 100.0 | % | |||||||||||
Patient Days (b) | |||||||||||||||||||||||||||||||
Skilled (c) | 29,814 | 31,601 | 32,169 | 37,150 | 130,734 | 40,794 | 40,360 | 35,828 | 35,516 | 152,498 | |||||||||||||||||||||
Medicaid | 140,265 | 154,704 | 177,601 | 173,813 | 646,383 | 178,768 | 185,292 | 188,268 | 184,626 | 736,954 | |||||||||||||||||||||
Private + Other | 31,104 | 34,115 | 39,102 | 40,133 | 144,454 | 41,082 | 39,934 | 43,431 | 46,887 | 171,334 | |||||||||||||||||||||
Total | 201,183 | 220,420 | 248,872 | 251,096 | 921,571 | 260,644 | 265,586 | 267,527 | 267,029 | 1,060,786 | |||||||||||||||||||||
Patient Day Mix % (a) | |||||||||||||||||||||||||||||||
Skilled (c) | 15.5 | % | 14.9 | % | 13.4 | % | 15.3 | % | 14.7 | % | 16.2 | % | 15.7 | % | 13.8 | % | 13.8 | % | 14.9 | % | |||||||||||
Medicaid | 71.9 | % | 72.3 | % | 73.2 | % | 71.1 | % | 72.1 | % | 70.3 | % | 71.5 | % | 72.0 | % | 71.0 | % | 71.2 | % | |||||||||||
Private + Other | 12.6 | % | 12.8 | % | 13.4 | % | 13.6 | % | 13.2 | % | 13.5 | % | 12.8 | % | 14.1 | % | 15.2 | % | 13.9 | % | |||||||||||
Total | 100.0 | % | 100.0 | % | 100.0 | % | 100.0 | % | 100.0 | % | 100.0 | % | 100.0 | % | 100.0 | % | 100.0 | % | 100.0 | % | |||||||||||
Revenue Rates Per Patient Day (a) | |||||||||||||||||||||||||||||||
Skilled (c) | $ | 432.82 | $ | 439.89 | $ | 437.38 | $ | 434.83 | $ | 436.22 | $ | 441.70 | $ | 436.07 | $ | 444.92 | $ | 448.81 | $ | 442.62 | |||||||||||
Medicaid | $ | 157.12 | $ | 161.35 | $ | 168.17 | $ | 162.11 | $ | 162.52 | $ | 161.59 | $ | 160.18 | $ | 157.66 | $ | 159.51 | $ | 159.71 | |||||||||||
Private + Other | $ | 174.23 | $ | 172.33 | $ | 167.69 | $ | 174.73 | $ | 172.12 | $ | 176.48 | $ | 175.86 | $ | 176.17 | $ | 176.92 | $ | 176.38 | |||||||||||
Weighted Average Total | $ | 210.09 | $ | 213.88 | $ | 214.26 | $ | 214.10 | $ | 213.22 | $ | 216.58 | $ | 213.46 | $ | 209.61 | $ | 210.52 | $ | 212.52 | |||||||||||
Average Daily Census (b) | |||||||||||||||||||||||||||||||
Skilled (c) | 328 | 347 | 350 | 404 | 357 | 453 | 444 | 389 | 386 | 418 | |||||||||||||||||||||
Medicaid | 1,541 | 1,700 | 1,930 | 1,889 | 1,766 | 1,986 | 2,033 | 2,046 | 2,007 | 2,019 | |||||||||||||||||||||
Private + Other | 342 | 375 | 425 | 436 | 395 | 456 | 442 | 472 | 510 | 469 | |||||||||||||||||||||
Total Average Daily Census | 2,211 | 2,422 | 2,705 | 2,729 | 2,518 | 2,896 | 2,919 | 2,908 | 2,902 | 2,906 | |||||||||||||||||||||
Occupancy (b) | 83.8 | % | 78.2 | % | 78.4 | % | 77.7 | % | 79.3 | % | 76.6 | % | 77.2 | % | 76.9 | % | 76.8 | % | 76.9 | % | |||||||||||
(in '000) | |||||||||||||||||||||||||||||||
Total Revenue (b) | $ | 41,647 | $ | 46,514 | $ | 52,786 | $ | 53,129 | $ | 194,077 | $ | 55,802 | $ | 56,010 | $ | 55,477 | $ | 55,558 | $ | 222,847 | |||||||||||
Adjusted EBITDAR (b) | $ | 3,517 | $ | 6,279 | $ | 4,994 | $ | 2,579 | $ | 17,369 | $ | 3,932 | $ | 4,750 | $ | 5,403 | $ | 5,307 | $ | 19,391 | |||||||||||
Adjusted EBITDA (b) | $ | 1,758 | $ | 4,534 | $ | 3,219 | $ | 789 | $ | 10,301 | $ | 2,195 | $ | 2,991 | $ | 3,642 | $ | 3,535 | $ | 12,363 | |||||||||||
(a) Skilled Nursing Only - Excludes Managed Facilities | |||||||||||||||||||||||||||||||
(b) AdCare Consolidated Incorporating Discontinued Operations for all periods presented | |||||||||||||||||||||||||||||||
(c) Skilled is defined as Medicare A + Managed Care RUGS | |||||||||||||||||||||||||||||||
Page 10