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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