AdCare Reports Continued Progress in Strategic Transition; Receives HUD Approval for Five Facilities
Company Completes Transfer of Operations for North Carolina Facility
ATLANTA, June 25, 2015 /PRNewswire/ -- AdCare Health Systems, Inc. (NYSE MKT: ADK) (NYSE MKT: ADK.PRA), a self-managed healthcare real estate investment company that invests primarily in real estate purposed for senior living and long-term healthcare, today announced continued progress in its strategic transition to a property holding and leasing company.
Transition Update
The Company received approval from HUD with respect to four facilities in Ohio and one facility in Georgia and expects to complete the operations transfers of these facilities in the third quarter of 2015. The four Ohio facilities are subject to lease agreements previously executed with affiliates of Beacon Management and the Georgia facility is subject to a lease agreement previously executed with an affiliate of C-Ross Management. In the aggregate, the four Ohio facilities, plus an additional facility in Ohio which did not require HUD approval, and the Georgia facility, represent $4.1 million in initial year cash rent.
As expected, the Company completed the operations transfer of one skilled nursing facility in North Carolina, effective June 1, 2015, pursuant to a lease agreement previously signed with a wholly-owned subsidiary of Symmetry Healthcare Management, representing approximately $650,000 in initial year cash rent.
"Our commitment to completing the strategic transition of our company, along with timely communication of our progress, continues with the announcement of HUD approval on five facilities and the transfer of operations of one facility," stated Bill McBride, AdCare's Chairman and Chief Executive Officer. "We expect to transfer operations on substantially all of the remaining facilities in the third quarter."
Since the Board approved the strategic plan to transition the Company's business from an owner and operator of healthcare facilities to a healthcare property holding and leasing company, the Company has entered into agreements for 37 of its 40 healthcare facilities. Of these 37 healthcare facilities:
- Twenty-six facilities have transferred operations to third-party operators or are under a management contract with an indefinite term;
- Of the remaining 11 facilities pending transfer:
- Of the five facilities in Ohio, the Company has received HUD approval on four, and one facility does not require HUD approval. The Company expects to transfer operations to a third-party operator for these five facilities on August 1.
- Of the two facilities in Georgia, the Company has received HUD approval on one, and expects to transfer operations for this facility to a third-party operator, on July 1. Transfer of the second Georgia facility is subject to HUD approval.
- The Company expects to transition two facilities in Oklahoma to a third-party operator during the third quarter of 2015, subject to receipt of required licenses;
- The Company expects to close the sale of one facility in Oklahoma in the third quarter, subject to certain termination provisions and closing conditions; and
- The Company expects the sale of one Arkansas facility to close on July 1.
The remaining two facilities in Georgia and one facility in Arkansas are pending final disposition.
About AdCare Health Systems
AdCare Health Systems, Inc. (NYSE MKT: ADK) (NYSE MKT: ADK.PRA) is a self-managed healthcare real estate investment company that invests primarily in real estate purposed for senior living and long-term healthcare through facility lease and sub-lease transactions. The Company currently owns, leases or manages for third parties 40 facilities, primarily in the Southeast. For more information about AdCare, visit www.adcarehealth.com.
Important Cautions Regarding Forward-Looking Statements
Statements contained in this press release that are not historical facts may be forward-looking statements within the meaning of federal law. Such statements can be identified by the use of forward-looking terminology, such as "believes," "expects," "plans," "intends," "anticipates" and variations of such words or similar expressions, but their absence does not mean that the statement is not forward-looking. Statements in this press release that are forward-looking include, among other things, statements regarding the strategic plan to transition the Company to a healthcare facilities holding and leasing company, statements regarding the expected dates for transitioning facility operations to third-party operators and statements regarding the sale of the Oklahoma facility. Such forward-looking statements reflect management's beliefs and assumptions and are based upon information currently available to management and involve known and unknown risks, results, performance or achievements of AdCare, which may differ materially from those expressed or implied in such statements. Such factors are identified in the public filings made by AdCare with the Securities and Exchange Commission, including the Company's Annual Report on Form 10-K for the year ended December 31, 2014. There is no assurance that such factors or other factors will not affect the accuracy of such forward-looking statements. Except where required by law, AdCare undertakes no obligation to revise or update any forward-looking statements to reflect events or circumstances after the date of this press release.
In addition, each facility mentioned in this press release is operated by a separate, wholly owned, independent operating subsidiary that has its own management, employees and assets.
References to the consolidated company and its assets and activities, as well as the use of terms such as "we," "us," "our," and similar verbiage, is not meant to imply that AdCare Health Systems, Inc. has direct operating assets, employees or revenue or that any of the facilities, the home health business or other related businesses are operated by the same entity.
SOURCE AdCare Health Systems, Inc.
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