AdCare Health Systems, Inc. Reports Financial Results for 2008
Revenues for the year ended
The loss from continuing operations for the year ended
The net loss for the year ended
About AdCare Health Systems, Inc.
AdCare Health Systems, Inc. (NYSE Alternext US: 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 920 employees provide high-quality care for patients and residents residing in the 16 facilities that they manage, seven of which are assisted living facilities, six skilled nursing centers and three independent senior living communities. The Company has ownership interests in eight 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,
ASSETS 2008 2007
Current Assets:
Cash and cash equivalents $1,266,315 $926,625
Certificate of deposit, restricted - 209,637
Accounts receivable:
Long-term care resident receivables, net 2,008,847 2,115,364
Management, consulting and development
receivables, net 258,811 259,778
Advances and receivables from affiliates 17,635 27,558
Prepaid expenses and other 478,534 453,219
Total current assets 4,030,142 3,992,181
Restricted cash 1,155,596 973,975
Property and equipment, net 16,772,660 14,425,868
Note receivable, net - 221,413
License, net 1,189,307 1,189,307
Goodwill 2,679,482 2,638,193
Other assets 1,012,340 1,050,506
Total Assets $26,839,527 $24,491,443
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities:
Current portion of notes payable and other
debt $713,323 $773,279
Current portion of note payable to
stockholder 9,432 9,026
Accounts payable 1,009,002 1,416,313
Accrued expenses 2,838,407 2,060,222
Forward purchase contract - 900,000
Total current liabilities 4,570,164 5,158,840
Notes payable and other debt, net of current
portion 16,974,788 12,813,338
Note payable to stockholder, net of current
portion 34,626 810,084
Other liabilities 299,314 559,509
Income tax payable 170,007 -
Minority Interest in Equity of Consolidated
Entities 269,193 255,070
Total Liabilities 22,318,092 19,296,841
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 shares issued and
outstanding 14,766,967 14,063,956
Accumulated deficit (10,245,532) (9,169,354)
Total stockholders' equity 4,521,435 4,894,602
Total liabilities and stockholders'
equity $26,839,527 $24,491,443
See notes to consolidated financial statements
ADCARE HEALTH SYSTEMS, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
Year Ended
December 31,
2008 2007
Revenues:
Patient care revenues $23,008,754 $21,928,808
Management, consulting and development fee
revenue 1,784,540 1,738,948
Total revenue 24,793,294 23,667,756
Expenses:
Payroll and related payroll costs 15,649,862 14,762,090
Other operating expenses 8,248,157 7,746,505
Depreciation and amortization 882,900 847,440
Total expenses 24,780,919 23,356,035
Income from Operations 12,375 311,721
Other Income (Expense):
Interest income 23,287 59,300
Interest expense, others (1,265,622) (978,731)
Interest expense, related parties (36,446) (66,432)
Minority interest in earnings of
consolidated entities (57,919) (94,811)
Other income (expense) 4,200 (37,014)
Total other (expenses) (1,332,500) (1,117,688)
Gain on Acquisition 413,954 -
Loss from continuing operations before
income taxes (906,171) (805,967)
Income Tax Benefit (Expense) (170,007) 178,415
Loss from Continuing Operations (1,076,178) (627,552)
Discontinued Operations:
Income from discontinued operations
(including gain on disposal of $619,605
in 2007) - 587,039
Provision for income taxes - (178,415)
Income on discontinued operations - 408,624
Net loss $(1,076,178) $(218,928)
Net (Loss) Income Per Share, Basic and Diluted:
Continuing operations $(0.28) $(0.16)
Discontinued operations - 0.11
$(0.28) $(0.05)
Weighted Average Common Shares Outstanding:
Basic 3,786,129 3,786,129
Diluted 3,786,129 3,786,129
See notes to consolidated financial statements
ADCARE HEALTH SYSTEMS, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
Year Ended December 31,
2008 2007
Cash flows from operating activities:
Net Loss $(1,076,178) $(218,928)
Add back: income from discontinued
operations - (587,039)
Net loss from continuing operations $(1,076,178) $(805,967)
Adjustments to reconcile net loss from
continuing operations to net cash
provided by (used in) operating
activities:
Depreciation and amortization 882,900 847,440
Warrants issued for services 150,831 58,149
Stock option compensation expense 641,004 27,326
Minority interest 57,919 94,811
Note receivable forgiveness exchanged
for rent 9,000 36,000
Gain on acquisition (413,952) -
Changes in certain assets and
liabilities:
Accounts receivable 111,805 (162,737)
Prepaid expenses and other (90,851) (171,461)
Other assets (24,982) (50,737)
Accounts payable and accrued expenses 300,635 (350,232)
Income tax liability 170,007 -
Other liabilities (278,696) 67,991
Net cash provided by (used in) operating
activities of continuing operations 439,442 (409,417)
Net cash provided by operating activities
of discontinued operations - 302,080
Net cash provided by (used in) operating
activities 439,442 (107,337)
Cash flow from investing activities:
Increase (decrease) in restricted cash 47,829 (59,034)
Forward purchase contract buyout (941,289) -
Distribution to minority shareholders (50,000) -
Purchase of minority interest investment (448) (11,382)
Purchase of property plant and equipment (477,092) (1,042,402)
Net cash used in investing activities of
Continuing operations (1,421,000) (1,112,818)
Net cash provided by investing activities
of discontinued operations:
Proceeds from sale of assets, net of
associated costs 2,500 591,329
Net cash used in investing activities (1,418,500) (521,489)
See notes to consolidated financial statements
ADCARE HEALTH SYSTEMS, INC. AND SUBSIDIARIES.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Continued)
Year Ended December 31,
2008 2007
Cash flows from financing activities:
Proceeds from notes payable 6,469,171 91,197
Prepaid loan financing costs - (172,857)
Cash received upon exercise of warrants - 20,000
Prepaid Financing Costs 159,130 -
Repayment of note payable to stockholder (760,000) (9,234)
Repayment on notes payable (4,549,553) (497,335)
Net cash provided by (used in) financing
activities of continuing operations 1,318,748 (568,229)
Net cash used in financing activities of
Discontinued operations:
Repayment on notes payable of
discontinued operations - (12,734)
Net cash provided (used in) by financing
activities 1, 318,748 (580,963)
Net Increase (Decrease) in Cash 339,690 (1,209,789)
Cash, Beginning 926,625 2,136,414
Cash, Ending $1,266,315 $926,625
Supplemental Disclosure of Cash Flow Information:
Cash paid during the year for:
Interest $1,012,813 $1,044,755
Supplemental Disclosure of Non-Cash Activities:
Rent in exchange of note receivable
repayment $9,000 $36,000
Payoff of existing mortgage at closing of
Discontinued operations - $609,839
Acquisition of assets in exchange for
note forgiveness $2,740,584 -
Purchase of business assets in exchange
for debt $266,300 $337,361
See notes to consolidated financial statements
SOURCE AdCare Health Systems, Inc.
RELATED LINKS
http://www.adcarehealth.com
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