ATLANTA, March 29, 2016 /PRNewswire/ -- AdCare Health
Systems, Inc. (NYSE MKT: ADK) (NYSE MKT: ADK.PRA), a
self-managed healthcare real estate investment company that invests
primarily in real estate purposed for senior living and long-term
healthcare, today reported results for the fourth quarter and year
ended December 31, 2015.
Business and Financial Highlights
- Completed transition to a healthcare property holding and
leasing company by leasing, subleasing or selling all 40 of the
healthcare facilities it previously owned, operated or managed. All
operations transfers have been completed.
- Strengthened the company's investment portfolio by executing a
new master lease for nine of its healthcare facilities located in
Arkansas with a well-capitalized
operator at higher rent. The master lease is expected to commence
on April 1, 2016.
- Paid down or received commitments to refinance or extend
approximately $44 million in
short-term debt, with such commitments being subject to the
execution of definitive documentation and the satisfaction or
waiver of closing conditions.
- Continued to make progress in its efforts to reduce G&A
expenses, and management expects a continued decline in G&A as
personnel and other costs are eliminated.
- Given that the transition to a healthcare property holding and
leasing company is complete, the Board of Directors has begun to
explore strategic alternatives for the company.
"In 2015, we delivered on our commitment to transition to a
healthcare property holding and leasing company, and we enter 2016
focused on taking additional actions to increase shareholder
value," commented Bill McBride,
AdCare's Chairman and Chief Executive Officer. "Given that the
transition is complete, the Board has determined the time is right
to begin to explore strategic alternatives for the company, and
this process is underway. As part of the Board's efforts in
reviewing its strategic alternatives, it will be hiring legal and
financial advisers."
"As we consider these strategic alternatives, we are taking
specific steps to strengthen our portfolio, streamline our
organization, reduce interest costs, improve cash flow, and create
sustainable shareholder value, including using excess cash to
repurchase shares," added Mr. McBride. "Today, with a portfolio of
properties leased on long-term, triple-net basis, we are building
on our 2015 momentum with today's announcement that we paid down or
received commitments to refinance or extend $44 million in short-term debt and the previously
announced operator change for our Arkansas facilities. In addition, we are
pursuing the sale or sublease of non-core real estate assets that
are no longer necessary to support our new business model. We are
actively working to reduce our general and administrative expenses
by eliminating personnel and other costs and by collecting legacy
patient care accounts receivables."
Set forth below are operating metrics that management believes
measure the operating performance of the company's leased and
subleased portfolio:
Portfolio
Operating Metrics (1)
|
For the Three
Months
Ended December 31,
2015
|
Occupancy
(%)
|
82.4%
|
Skilled Mix
(%)(2)
|
12.0%
|
Rent Before
Management Fees
|
1.5x
|
Rent Coverage After
Management Fees
|
1.0x
|
(1)
Excludes Arkansas facilities and only includes facilities that were
leased for the full three month period ended December 31,
2015.
(2)
Skilled Mix refers to Medicare A and Managed Care RUGs.
|
Summary of Financial Results for the Fourth Quarter and Year
Ended December 31, 2015
Tables reporting the full year financial results are included in
this press release and will be reported in the company's Annual
Report on Form 10-K, to be filed with the U.S. Securities and
Exchange Commission on March 30,
2016.
Revenues in the fourth quarter of 2015 were $6.3 million, up 418% from $1.2 million in the fourth quarter of 2014.
Revenues for the year ended December 31,
2015 increased by 453% to $18.4
million from $3.3 million in
2014. The increase in revenues reflects AdCare's transition from an
operator of facilities to a healthcare property holding and leasing
company. The financial results for the fourth quarter and year
ended December 31, 2015 are not
necessarily indicative of full year results since leasing and
subleasing activity occurred throughout the year.
The net loss attributable to AdCare common stockholders in the
fourth quarter of 2015 totaled $10.2
million, or $0.50 per basic
and diluted share, compared with a net loss of $5.9 million, or $0.31 per basic and diluted share, in the fourth
quarter of 2014. For the year ended December
31, 2015, the net loss attributable to AdCare common
stockholders was $28.7 million, or
$1.46 per basic and diluted share,
compared with a net loss of $16.2
million, or $0.90 per basic
and diluted share, in the year-ago period. The net loss was
primarily attributed to weaker operating performance at AdCare's
facilities prior to the transfer of operations to new operators,
including higher bad debt expense.
Cash and cash equivalents at December 31,
2015 totaled $2.7 million, as
compared with $10.7 million at
December 31, 2014. Restricted
cash and investments at December 31,
2015 totaled $12.7 million, as
compared with $8.8 million at
December 31, 2014. Total debt
outstanding at December 31, 2015
totaled $125.5 million (which
includes $957,800 in liabilities of
disposal group held for sale), as compared with $151.4 million at December
31, 2014 which includes $5.2
million in liabilities of disposal group held for sale,
$4.0 million of liabilities of
disposal group held for use, and $6.0
million in liabilities of a variable interest entity held
for sale.
Conference Call and Webcast
AdCare will hold a conference call to discuss its fourth quarter
and full-year 2015 financial results on Tuesday, March 29, 2016 at 4:30 p.m. ET.
Date and time: Tuesday, March 29,
2016 at 4:30 p.m. ET
- Dial-in number: 1-888-395-3227 (domestic) or 1-719-325-2329
(international). Reference passcode: 5714686
- Replay number: Dial 1-877-870-5176 (domestic) or 1-858-384-5517
(international). Reference passcode: 5714686. The replay will be
available until April 5, 2016.
- Webcast link: http://public.viavid.com/index.php?id=118627
About AdCare Health Systems
AdCare Health Systems, Inc. (NYSE MKT: ADK) (NYSE MKT: ADK.PRA)
is a self-managed healthcare real estate investment company that
invests primarily in real estate purposed for senior living and
long-term healthcare through facility lease and sub-lease
transactions. The Company currently owns, leases or manages for
third parties 38 facilities. 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 press release
that are forward-looking include, among other things, statements
regarding the company's transition to a healthcare property holding
and leasing company, the leasing of the Arkansas facilities to a new operator, the
reduction of general and administrative expenses, the collection of
legacy patient care accounts receivables and the refinance or
extension of short-term debt. 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, including
AdCare's Annual Report on Form 10-K for the year ended December 31, 2015. 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.
ADCARE HEALTH
SYSTEMS, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE
SHEETS
(Amounts in
000's)
|
|
|
|
December
31,
|
|
|
2015
|
|
2014
|
ASSETS
|
|
|
|
|
Current
Assets:
|
|
|
|
|
Cash and cash
equivalents
|
|
$ 2,720
|
|
$ 10,735
|
Restricted cash and
investments
|
|
9,169
|
|
3,321
|
Accounts receivable,
net of allowance of $12,487 and $6,708
|
|
8,805
|
|
24,294
|
Prepaid expenses and
other
|
|
3,214
|
|
1,746
|
Deferred tax
asset
|
|
—
|
|
569
|
Assets of disposal
group held for sale
|
|
1,249
|
|
5,813
|
Assets of disposal
group held for use
|
|
—
|
|
4,592
|
Assets of variable
interest entity held for sale
|
|
—
|
|
5,924
|
Total current
assets
|
|
25,157
|
|
56,994
|
|
|
|
|
|
Restricted cash and
investments
|
|
3,558
|
|
5,456
|
Property and
equipment, net
|
|
126,676
|
|
130,993
|
Intangible assets—bed
licenses
|
|
2,471
|
|
2,471
|
Intangible
assets—lease rights, net
|
|
3,420
|
|
4,087
|
Goodwill
|
|
4,183
|
|
4,224
|
Lease
deposits
|
|
1,812
|
|
1,683
|
Deferred loan costs,
net
|
|
2,913
|
|
3,464
|
Other
assets
|
|
1,795
|
|
590
|
Total
assets
|
|
$ 171,985
|
|
$ 209,962
|
LIABILITIES AND
EQUITY
|
|
|
|
|
Current
Liabilities:
|
|
|
|
|
Current portion of
notes payable and other debt
|
|
$ 50,960
|
|
$ 2,436
|
Current portion of
convertible debt
|
|
—
|
|
14,000
|
Revolving credit
facilities and lines of credit
|
|
—
|
|
5,576
|
Accounts
payable
|
|
8,741
|
|
16,434
|
Accrued
expenses
|
|
3,125
|
|
15,653
|
Liabilities of
disposal group held for sale
|
|
958
|
|
5,197
|
Liabilities of
disposal group held for use
|
|
—
|
|
4,035
|
Liabilities of
variable interest entity held for sale
|
|
—
|
|
5,956
|
Total current
liabilities
|
|
63,784
|
|
69,287
|
Notes payable and
other debt, net of current portion:
|
|
|
|
|
Senior debt,
net of discounts
|
|
56,871
|
|
106,089
|
Bonds, net of
discounts
|
|
6,940
|
|
7,011
|
Convertible
debt
|
|
9,200
|
|
—
|
Revolving
credit facilities
|
|
—
|
|
1,059
|
Other
debt
|
|
542
|
|
—
|
Other
liabilities
|
|
3,380
|
|
2,130
|
Deferred tax
liability
|
|
389
|
|
605
|
Total
liabilities
|
|
141,106
|
|
186,181
|
|
|
|
|
|
Preferred stock, no
par value; 5,000 and 5,000 shares authorized; 2,427 and 950 shares
issued and outstanding, redemption amount $60,273 and $23,750 at
December 31, 2015 and 2014, respectively
|
|
54,714
|
|
20,392
|
Stockholders'
equity:
|
|
|
|
|
Common stock and
additional paid-in capital, no par value; 55,000 shares authorized;
19,861 and 19,151 shares issued and outstanding at December 31,
2015 and 2014, respectively
|
|
60,958
|
|
61,896
|
Accumulated
deficit
|
|
(84,793)
|
|
(56,067)
|
Total stockholders'
equity (deficit)
|
|
(23,835)
|
|
5,829
|
Noncontrolling
interest in subsidiaries
|
|
—
|
|
(2,440)
|
Total equity
(deficit)
|
|
(23,835)
|
|
3,389
|
Total liabilities and
equity (deficit)
|
|
$ 171,985
|
|
$ 209,962
|
ADCARE HEALTH
SYSTEMS, INC. AND SUBSIDIARIES
CONSOLIDATED
STATEMENTS OF OPERATIONS
(Amounts in 000's,
except per share data)
(Unaudited)
|
|
|
Three Months
Ended
December 31,
|
|
Year Ended
December 31,
|
|
2015
|
|
2014
|
|
2015
|
|
2014
|
Revenues:
|
|
|
|
|
|
|
|
Rental
revenues
|
$ 5,932
|
|
$ 852
|
|
$ 17,254
|
|
$ 1,832
|
Management fee
revenues
|
218
|
|
354
|
|
910
|
|
1,493
|
Other
revenues
|
101
|
|
—
|
|
236
|
|
—
|
Total
revenues
|
6,251
|
|
1,206
|
|
18,400
|
|
3,325
|
Expenses:
|
|
|
|
|
|
|
|
General and
administrative expenses
|
2,530
|
|
3,279
|
|
10,544
|
|
15,696
|
Facility rent
expense
|
2,206
|
|
468
|
|
5,758
|
|
1,512
|
Depreciation
and amortization
|
2,086
|
|
1,935
|
|
7,345
|
|
7,393
|
Other
operating expenses
|
1,864
|
|
34
|
|
2,394
|
|
2,922
|
Total
expenses
|
8,686
|
|
5,716
|
|
26,041
|
|
27,523
|
|
|
|
|
|
|
|
|
Loss from
operations
|
(2,435)
|
|
(4,510)
|
|
(7,641)
|
|
(24,198)
|
|
|
|
|
|
|
|
|
Other Income
(Expense):
|
|
|
|
|
|
|
|
Interest
expense, net
|
(1,874)
|
|
(167)
|
|
(8,462)
|
|
(10,677)
|
Loss on
extinguishment of debt
|
—
|
|
—
|
|
(680)
|
|
(1,803)
|
Loss on legal
settlement
|
—
|
|
(600)
|
|
—
|
|
(600)
|
Other
expense
|
(163)
|
|
(2,926)
|
|
(918)
|
|
(779)
|
Total other
expense, net
|
(2,037)
|
|
(3,693)
|
|
(10,060)
|
|
(13,859)
|
Loss from continuing
operations before income taxes
|
(4,472)
|
|
(8,203)
|
|
(17,701)
|
|
(38,057)
|
Income tax
expense
|
(91)
|
|
(367)
|
|
(110)
|
|
(131)
|
Loss from continuing
operations
|
(4,563)
|
|
(8,570)
|
|
(17,811)
|
|
(38,188)
|
(Loss) income from
discontinued operations, net of tax
|
(2,431)
|
|
3,031
|
|
(4,892)
|
|
23,783
|
Net loss
|
(6,994)
|
|
(5,539)
|
|
(22,703)
|
|
(14,405)
|
Net loss attributable
to noncontrolling interests
|
(1,600)
|
|
258
|
|
(815)
|
|
806
|
Net loss attributable
to AdCare Health Systems, Inc.
|
(8,594)
|
|
(5,281)
|
|
(23,518)
|
|
(13,599)
|
Preferred stock
dividend
|
(1,627)
|
|
(646)
|
|
(5,208)
|
|
(2,584)
|
Net loss attributable
to AdCare Health Systems, Inc. common stockholders
|
$ (10,221)
|
|
$ (5,927)
|
|
$ (28,726)
|
|
$ (16,183)
|
|
|
|
|
|
|
|
|
Net income (loss) per
common share attributable to AdCare Health Systems, Inc.
common stockholders
|
|
|
|
|
|
|
|
Basic and
diluted:
|
|
|
|
|
|
|
|
Continuing
operations
|
$ (0.31)
|
|
$ (0.48)
|
|
$ (1.17)
|
|
$ (2.27)
|
Discontinued
operations
|
(0.19)
|
|
0.17
|
|
(0.29)
|
|
1.37
|
|
$ (0.50)
|
|
$ (0.31)
|
|
$ (1.46)
|
|
$ (0.90)
|
Weighted average
common shares outstanding:
|
|
|
|
|
|
|
|
Basic and
diluted
|
19,856
|
|
18,926
|
|
19,680
|
|
17,930
|
To view the original version on PR Newswire,
visit:http://www.prnewswire.com/news-releases/adcare-health-systems-reports-fourth-quarter-and-full-year-2015-results-300242743.html
SOURCE AdCare Health Systems, Inc.