AdCare Health Systems, Inc. Reports Financial Results for 2007
Continues To Reduce Losses
SPRINGFIELD, Ohio, March 31 /PRNewswire-FirstCall/ -- AdCare Health
Systems, Inc. (Amex: ADK), an Ohio based long term care, home care and
management company today reported financial results for its year ending
December 31, 2007.
Revenues for the year ended December 31, 2007 were $23,667,756 as
compared to $22,549,485 in 2006, an increase of $1,118,271. The improvement
was primarily due to increased occupancy in our assisted living facilities
and an increase in visits made by our nurses and care givers at our home
health care division.
The loss before discontinued operations for the year ended December 31,
2007 was $627,552 as compared to a loss of $2,413,794 for 2006, an
improvement of $1,786,242 or 74%. In general, the improvement was due to
increased occupancy at our assisted living properties, more home health
care visits, lower interest expense as a result of the expenses related to
our mezzanine financing in 2005 being fully recognized in 2006, increasing
the reserve for our investment note in the Lincoln Lodge property and
recognizing an income tax benefit.
The net loss for the year ended December 31, 2007 was $218,928 as
compared to a net loss of $2,441,217 for 2006, an improvement of $2,222,289
or 89% and helped by recognizing a gain on the sale of assets in
discontinued operations. Basic and diluted net loss per share for 2007 was
$0.05 as compared to a basic and diluted net loss per share of $1.09 for
2006, an improvement of $1.04 per share.
David A. Tenwick, Chairman of AdCare, stated that, "AdCare reduced its
losses in each quarter of 2007 as compared to 2006 and continues to move
toward profitability in 2008. Going public in November of 2006 was the
prelude to expanding our operations, securing liquidity for our
shareholders and having the ability to use our stock for making
acquisitions." In that regard, Mr. Tenwick added that he is excited about
having GCC Capital Group and Prospect Financial Advisors "on board to
assist in identifying, evaluating and securing alternative capital,
financing and investment sources to further AdCare's expansion plans."
AdCare Health Systems, Inc. will host a conference call this afternoon,
Monday, March 31st at 4:15 EDT. The dial-in number is 1-800-218-0713. For a
replay through April 14, 2008, the dial-in number is 1-800-405-2236 and the
pass code is 11110628#.
About AdCare Health Systems, Inc.
AdCare Health Systems, Inc. (Amex: ADK) develops, owns and manages
assisted living facilities, nursing homes and retirement communities and
provides home health care services. Prior to becoming a publicly-traded
company in November of 2006, AdCare operated as a private company for 18
years. AdCare's 900 employees provide high-quality care for patients and
residents residing in the 15 facilities that they manage, seven of which
are assisted living facilities, six skilled nursing centers and two
independent senior living communities. The Company has ownership interests
in seven of those facilities. In the ever expanding marketplace of long
term care, AdCare's mission is to provide quality healthcare services to
the elderly.
Safe Harbor Statement
Statements contained in this press release that are not historical
facts may be forward-looking statements within the meaning of federal law.
Such forward-looking statements reflect management's beliefs and
assumptions and are based on information currently available to management.
The forward- looking statements involve known and unknown risks, results,
performance or achievements of the Company to differ materially from those
expressed or implied in such statements. Such factors are identified in the
public filings made by the Company with the Securities and Exchange
Commission and include the Company's ability to secure lines of credit
and/or an acquisition credit facility, find suitable acquisition properties
at favorable terms, changes in the health care industry because of
political and economic influences, changes in regulations governing the
industry, changes in reimbursement levels including those under the
Medicare and Medicaid programs and changes in the competitive marketplace.
There can be no assurance that such factors or other factors will not
affect the accuracy of such forward-looking statements.
ADCARE HEALTH SYSTEMS, INC.
AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
December 31,
2007 2006
ASSETS
Current Assets:
Cash $926,625 $2,136,414
Certificate of deposit, restricted 209,637 198,266
Accounts receivable:
Long-term care resident receivables, net 2,115,364 1,949,745
Management, consulting and development
receivables, net 259,778 254,321
Advances and receivables from affiliates, current 27,558 35,897
Assets of discontinued operations - 4,677
Prepaid expenses and other 453,219 337,638
Total current assets 3,992,181 4,916,958
Restricted Cash 973,975 914,941
Property and Equipment, net 14,425,868 13,750,870
Note Receivable, net 221,413 257,413
License, net 1,189,307 1,189,306
Goodwill 2,638,193 2,638,193
Assets of Discontinued Operations, net of Current
Portion - 880,430
Other Assets 1,050,506 838,283
Total Assets
$24,491,443 $25,386,394
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities:
Current portion of note payable and other debt $773,279 $744,131
Current portion of note payable to stockholder 9,026 828,344
Accounts payable and accrued expenses 3,476,535 3,804,590
Liabilities of discontinued operations - 22,177
Forward purchase contract 900,000 -
Total current liabilities 5,158,840 5,399,242
Notes Payable and Other Debt, Net of
Current Portion 12,813,338 12,909,162
Note Payable to Stockholder, Net of Current
Portion 810,084 -
Other Liabilities 559,509 262,597
Forward Purchase Contract - 900,000
Liabilities of Discontinued Operations - 848,394
Minority Interest in Equity of Consolidated
Entities 255,070 160,259
Total liabilities 19,596,841 20,479,654
Stockholders' equity:
Preferred stock, no par value; 500,000
shares authorized; no shares issued
or outstanding - -
Common stock and additional paid-in capital,
no par value; 14,500,000 shares authorized;
3,786,129 and 3,778,129 shares issued
and outstanding 14,063,956 13,857,166
Accumulated deficit (9,169,354) (8,950,426)
Total stockholders' equity 4,894,602 4,906,740
Total liabilities and stockholders' equity $24,491,443 $25,386,394
See notes to consolidated financial statements
ADCARE HEALTH SYSTEMS, INC.
AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
Year Ended
December 31,
2007 2006
Revenues:
Patient care revenues $21,928,808 $20,801,684
Management, consulting and development fee
revenue 1,738,948 1,747,801
Total revenue 23,667,756 22,549,485
Expenses:
Payroll and related payroll costs 14,762,090 14,279,275
Other operating expenses 7,746,505 7,114,252
Depreciation and amortization 847,440 748,312
Total expenses 23,356,035 22,141,839
Income from Operations 311,721 407,646
Other Income (Expense):
Interest income 59,300 26,571
Interest expense, others (978,731) (2,414,996)
Interest expense, related parties (66,432) (70,227)
Minority interest in earnings of consolidated
entities (94,811) 74,460
Increase reserve for note receivable - (437,023)
Other income (expense) (37,014) (225)
(1,117,688) (2,821,440)
Loss From Continuing Operations Before Income
Taxes (805,967) (2,413,794)
Income Tax Benefit 178,415 -
Loss from Continuing Operations (627,552) (2,413,794)
Discontinued Operations:
Income (Loss) from discontinued operations
(including gain on disposal of $619,605 in 2007) 587,039 (27,423)
Provision for income taxes (178,415) -
Income (loss) on discontinued operations 408,624 (27,423)
Net Loss $(218,928) $(2,441,217)
Net Income (Loss) Per Share, Basic and Diluted:
Continuing operations $(0.16) $(1.08)
Discontinued operations 0.11 (0.01)
$(0.05) $(1.09)
Weighted Average Common Shares Outstanding,
Basic 3,786,129 2,234,570
Diluted 3,786,129 2,234,570
See notes to consolidated financial statements
ADCARE HEALTH SYSTEMS, INC.
AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
Year Ended December 31,
2007 2006
Cash flows from operating activities:
Net Loss $(218,928) $(2,441,217)
Add back: (income) loss from discontinued
operations (587,039) 27,423
Net loss from continuing operations
$(805,967) $(2,413,79)
Adjustments to reconcile net loss from
continuing operations to net cash provided
by (used in) operating activities:
Depreciation and amortization 847,440 748,312
Reserve for notes receivable - 437,023
Warrants issued for services 58,149 21,390
Stock option compensation expense 27,326 6,296
Minority interest 94,811 (74,460)
Discount on convertible debentures - 1,134,000
Note receivable forgiveness exchanged for rent 36,000 18,000
Changes in certain assets and liabilities:
Accounts receivable (162,737) (46,262)
Prepaid expenses and other (171,461) (131,858)
Other assets (50,737) 442,117
Accounts payable and accrued expenses (350,232) 288,978
Other liabilities 67,991 (46,051)
Net cash provided by (used in) operating
activities of continuing operations (409,417) 383,691
Net cash provided by (used in) operating
activities of discontinued operations 302,080 (8,031)
Net cash provided by (used in) operating
activities (107,337) 375,660
Cash flow from investing activities:
Increase in restricted cash (59,034) (549,995)
Increase in certificate of deposit, restricted - (3,145)
Purchase of minority interest investment (11,382) -
Purchase of property plant and equipment (1,042,402) (473,701)
Net cash used in investing activities of (1,112,818) (1,026,841)
continuing operations
Net cash provided in investing activities of
discontinued operations:
Proceeds from sale of assets net of associated
costs 591,329 -
Net cash used in investing activities
(521,489) (1,026,841)
See notes to consolidated financial statements
ADCARE HEALTH SYSTEMS, INC.
AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Continued)
Year Ended December 31,
2007 2006
Cash flows from financing activities:
Proceeds from notes payable 91,197 35,543
Prepaid loan financing costs (172,857) -
Proceeds from issuance of common stock, net - 5,742,866
Offering costs - (1,393,662)
Cash received upon exercise of warrants 20,000 -
Proceeds from note payable to stockholder - 835,000
Repayment of note payable to stockholder (9,234) (895,123)
Repayment on notes payable (497,335) (2,727,608)
Net cash provided by (used in) financing
activities of continuing operations (568,229) 1,597,016
Net cash used in financing activities of
discontinued operations:
Repayment on notes payable of discontinued
operations (12,734) (18,177)
Net cash (used in) provided by financing
activities (580,963) 1,578,839
Net (Decrease) Increase in Cash (1,209,789) 927,658
Cash, Beginning 2,136,414 1,208,756
Cash, Ending $926,625 $2,136,414
Supplemental Disclosure of Cash Flow Information:
Cash paid during the year for:
Interest $1,044,755 $553,884
Supplemental Disclosure of Non-Cash Activities:
Rent in exchange of note receivable repayment $36,000 $18,000
Payoff of existing mortgage at closing of
discontinued operations $609,839 $-
Purchase of business assets in exchange
for debt $337,361 $-
See notes to consolidated financial statements
SOURCE AdCare Health Systems, Inc.
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