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.
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