AdCare Health Systems Reports Fourth Quarter and Full-Year Financial 2016 Results
Business Update
- Signed a definitive purchase agreement to purchase an assisted living facility located in
Alabama with 106 operational beds for$5.5 million ; executed a long-term lease with an affiliate of C.Ross Management, LLC to lease the facility upon purchase. - Announced recertification by the
Centers for Medicare and Medicaid Services ("CMS") for itsJeffersonville and Oceanside facilities. - Refinanced short-term mortgage debt on its
Sumter, South Carolina property with$5.9 million of HUD-guaranteed debt maturing in 2046. - Reduced quarterly general and administrative expense to
$1.4 million in the fourth quarter, down 10.0% sequentially from the third quarter. - Repurchased 250,000 shares of common stock since
November 2016 for$0.4 million under a newly approved share buyback program of up to 1.0 million shares of common stock. - Filed a registration statement on Form S-4 with the
Securities and Exchange Commission (the "SEC ") in connection with a proposed reorganization ofAdCare's corporate structure intended to position the Company to regain compliance with certain NYSE MKT continued listing standards and to better positionAdCare to comply with certainU.S. federal tax rules applicable to REITs to the extent such rules relate to the common stock, as further discussed in such filing.
"We made noteworthy progress against each of the initiatives the board put in place to create sustainable shareholder value," stated
"We are moving forward with our efforts to purchase a 106-bed assisted living facility in
C.Ross Management, through its affiliates, operates 21 facilities in
On
If completed, the reorganization will provide
"The proposed reorganization and name change are consistent with our strategy of transitioning from an operating company to a property holding and leasing company, and we are exciting about operating under our new corporate name," commented
In the fourth quarter, the Company's Rent Coverage Before Management Fees was 1.53x and Rent Coverage After Management Fees was 1.12x.
"From an operational perspective, we further reduced overhead costs in the fourth quarter by nearly 10.0% sequentially from the third quarter through headcount reductions and non-compensation expense controls and expect further reductions in the next few quarters," added McBride. "We are also pleased that our portfolio operating metrics, including rent coverage ratios, were stable during the fourth quarter as compared to the third quarter. We expect additional improvements in portfolio operating metrics over the next few quarters."
Summary of Financial Results for the Three Months and Twelve Months Ended
Revenues in the fourth quarter of 2016 were
General and administrative costs decreased by
The loss from discontinued operations, net of tax for the quarter was
Net loss attributable to
Cash and cash equivalents at
Conference Call and Webcast
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Friday, March 24, 2017 at9 a.m. ET - Dial-in number: 1-800-967-7187 (domestic) or 1-719-325-2499 (international)
- Reference passcode: 4711431
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About
Important Cautions Regarding Forward-Looking Statements
This press release includes forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. Words such as "expects," "intends," "believes," "anticipates," "plans," "likely," "will," "seeks," "estimates" and variations of such words and similar expressions are intended to identify such forward-looking statements. Statements in this press release regarding future events and developments and our future performance, as well as management's expectations, beliefs, plans, estimates or projections relating to the future, are forward-looking statements. Forward-looking statements in this press release include, among others, statements regarding the proposed merger of
Forward-looking statements, by their nature, involve estimates, projections, goals, forecasts and assumptions and are subject to risks and uncertainties that could cause actual results to differ materially from those projected or contemplated by our forward-looking statements due to various factors, including, among others: our dependence on the operating success of our operators; the significant amount of, and our ability to service, our indebtedness; covenants in our debt agreements that may restrict our ability to make investments, incur additional indebtedness and refinance indebtedness on favorable terms; the availability and cost of capital; our ability to raise capital through equity and debt financings or through the sale of assets; the effect of increasing healthcare regulation and enforcement on our operators and the dependence of our operators on reimbursement from governmental and other third-party payors; the relatively illiquid nature of real estate investments; the impact of litigation and rising insurance costs on the business of our operators; the impact on us of litigation relating to our prior operation of our healthcare properties; the effect of our operators declaring bankruptcy, becoming insolvent or failing to pay rent as due; the ability of any of our operators in bankruptcy to reject unexpired lease obligations and to impede our ability to collect unpaid rent or interest during the pendency of a bankruptcy proceeding and retain security deposits for the debtor's obligations; our ability to find replacement operators and the impact of unforeseen costs in acquiring new properties; and other factors discussed from time to time in our news releases, public statements and documents filed by us with the
Additional Information
This press release does not constitute an offer to sell or the solicitation of an offer to buy securities or a solicitation of any vote or approval. RHE has filed with the
ADCARE HEALTH SYSTEMS, INC. AND SUBSIDIARIES |
||
|
||
ASSETS |
2016 |
2015 |
(Amounts in 000's) |
||
Current assets: |
||
Cash and cash equivalents |
$ 14,045 |
$ 2,720 |
Restricted cash |
1,600 |
9,169 |
Accounts receivable, net of allowance of |
2,429 |
8,805 |
Prepaid expenses and other |
2,395 |
3,214 |
Assets of disposal group held for sale |
- |
1,249 |
Total current assets |
20,469 |
25,157 |
Restricted cash and investments |
3,864 |
3,558 |
Property and equipment, net |
79,168 |
126,676 |
Intangible assets - bed licenses |
2,471 |
2,471 |
Intangible assets - lease rights, net |
2,754 |
3,420 |
|
2,105 |
4,183 |
Lease deposits |
1,411 |
1,812 |
Other assets |
7,244 |
1,996 |
Total assets |
$ 119,486 |
$ 169,273 |
LIABILITIES AND DEFICIT |
||
Current liabilities: |
||
Current portion of notes payable and other debt |
$ 4,018 |
$ 50,960 |
Current portion of convertible debt, net |
9,136 |
- |
Accounts payable |
3,037 |
8,741 |
Accrued expenses and other |
9,077 |
3,125 |
Liabilities of disposal group held for sale |
- |
958 |
Total current liabilities |
25,268 |
63,784 |
Notes payable and other debt, net of current portion: |
||
Senior debt, net |
60,189 |
54,742 |
Bonds, net |
6,586 |
6,600 |
Convertible debt, net |
- |
8,968 |
Other debt, net |
41 |
531 |
Other liabilities |
3,677 |
3,380 |
Deferred tax liability |
226 |
389 |
Total liabilities |
95,987 |
138,394 |
Preferred stock, no par value; 5,000 shares authorized; 2,762 and 2,427 shares issued and outstanding, redemption amount |
||
61,446 |
54,714 |
|
Stockholders' deficit: |
||
Common stock and additional paid-in capital, no par value; 55,000 shares authorized; 19,927 and 19,861 shares issued and outstanding at |
||
61,643 |
60,958 |
|
Accumulated deficit |
(99,590) |
(84,793) |
Total stockholders' deficit |
(37,947) |
(23,835) |
Total liabilities and stockholders' deficit |
$ 119,486 |
$ 169,273 |
ADCARE HEALTH SYSTEMS, INC. AND SUBSIDIARIES |
||||
Three Months Ended |
Twelve Months Ended |
|||
(Amounts in 000's) |
2016 |
2015 |
2016 |
2015 |
Revenues: |
||||
Rental revenues |
$ 5,636 |
$ 5,932 |
$ 26,287 |
$ 17,254 |
Management fee and other revenues |
290 |
319 |
1,050 |
1,146 |
Total revenues |
5,926 |
6,251 |
27,337 |
18,400 |
Expenses: |
||||
Facility rent expense |
2,171 |
2,206 |
8,694 |
5,758 |
Depreciation and amortization |
1,120 |
2,086 |
5,296 |
7,345 |
General and administrative expense |
1,439 |
2,530 |
7,714 |
10,544 |
Other operating expense |
(35) |
1,864 |
1,378 |
2,394 |
Total expenses |
4,695 |
8,686 |
23,082 |
26,041 |
Income (loss) from operations |
1,231 |
(2,435) |
4,255 |
(7,641) |
Other (income) expense: |
||||
Interest expense, net |
1,508 |
1,874 |
6,885 |
8,462 |
Loss on extinguishment of debt |
245 |
- |
245 |
680 |
Gain on disposal of assets |
(8,750) |
- |
(8,750) |
- |
Other expense |
21 |
163 |
72 |
918 |
Total other (income) expense, net |
(6,976) |
2,037 |
(1,548) |
10,060 |
Income (loss) from continuing operations before income taxes |
8,207 |
(4,472) |
5,803 |
(17,701) |
Income tax (benefit) expense |
(166) |
91 |
(163) |
110 |
Income (loss) from continuing operations |
8,373 |
(4,563) |
5,966 |
(17,811) |
Loss from discontinued operations, net of tax |
(6,915) |
(2,431) |
(13,428) |
(4,892) |
Net income (loss) |
1,458 |
(6,994) |
(7,462) |
(22,703) |
Loss attributable to noncontrolling interests |
- |
(1,600) |
- |
(815) |
Net income (loss) attributable to |
1,458 |
(8,594) |
(7,462) |
(23,518) |
Preferred stock dividends |
(1,878) |
(1,627) |
(7,335) |
(5,208) |
Net loss attributable to |
||||
Stockholders |
$ (420) |
$ (10,221) |
$ (14,797) |
$ (28,726) |
Net loss per share of common stock attributable to |
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|
||||
Basic and diluted: |
||||
Continuing operations |
$ 0.33 |
$ (0.31) |
$ (0.07) |
$ (1.17) |
Discontinued operations |
$ (0.35) |
$ (0.19) |
$ (0.67) |
$ (0.29) |
$ (0.02) |
$ (0.50) |
$ (0.74) |
$ (1.46) |
|
Weighted average shares of common stock outstanding: |
||||
Basic and diluted |
19,891 |
19,856 |
19,892 |
19,680 |
ADCARE HEALTH SYSTEMS, INC. AND SUBSIDIARIES |
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Three Months Ended |
Three Months Ended |
Three Months Ended |
Three Months Ended |
|
Portfolio Operating Metrics (1) |
|
|
|
|
Occupancy (%) |
82.3% |
81.7% |
82.6% |
82.6% |
Skilled Mix (2) |
24.9% |
24.6% |
23.7% |
23.1% |
Rent Coverage Before Management Fees |
1.36 |
1.32 |
1.53 |
1.53 |
Rent Coverage After Management Fees |
0.95 |
0.93 |
1.12 |
1.12 |
(1) |
Excludes nine |
(2) |
Quality Mix refers to all payor types less |
To view the original version on PR Newswire, visit:http://www.prnewswire.com/news-releases/adcare-health-systems-reports-fourth-quarter-and-full-year-financial-2016-results-300428851.html
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