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AdCare Health Systems, Inc. Reports 2007 Second Quarter Earnings Results, Continues to Reduce Losses
SPRINGFIELD, Ohio, Aug. 14 /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 second quarter of 2007.
Revenues for the quarter ended June 30th, 2007 were $5,872,377 as compared to $5,567,582 for the same quarter in 2006, an increase of $304,795, or 5.5%. The increase was mostly due to improved occupancy at our properties 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 quarter ended June 30th, 2007 was $202,309 as compared to a loss of $591,736 for the quarter ended June 30th, 2006, an improvement of $389,427. The improvement was due to increased occupancy at our assisted living properties, more visits made by our staff at our home health care division and lower interest expense as a result of all the expenses related to the mezzanine financing in 2005 being fully recognized in 2006. Basic and diluted net loss per share for the quarter ended June 30th, 2007 was $0.05 as compared to a basis and diluted net loss per share of $0.32 for the quarter ended June 30th, 2006, an improvement of $0.27 per share.
"I am pleased that AdCare is making progress and continuing to reduce its losses in 2007," commented David A. Tenwick, Chairman of AdCare. "For the second quarter of 2007, our net loss was reduced by $409,898 to $212,880, an improvement of 64% as compared to the same period last year. And for the first six months of 2007, our net loss was reduced by $930,205 to $347,657, an improvement of 73% as compared to the same period last year. Although much of that improvement was due to the elimination of the expenses of the bridge financing done in the third quarter of 2005 that helped us go public in November of 2006, AdCare continues to see improvement in the occupancy of its assisted living properties and the growth of its revenue base at its home health care division. Another factor that needs to be considered is that, as a public company, we now have additional expenses to budget for that we did not have last year." Mr. Tenwick further stated "While we do not make earnings projections, we are not satisfied with a loss and I look for continued improvement for the second half of 2007. We are in the process of refinancing some of our properties to improve cash flow, and continue to look for suitable acquisitions and new management contracts to expand operations and further the growth of the Company."
The Company, as part of its business plan, has an investment banking agreement with Capital City Partners to look for acquisitions in the health care industry that would be an appropriate fit for AdCare. In connection with the announcement of AdCare's definitive merger agreement with Family Home Health Services on June 6, 2007, AdCare is in the process of doing its due diligence and the drafting of a Form S-4 registration statement which will include a joint proxy statement/prospectus of AdCare and Family and other relevant materials related to the proposed transaction to be filed with the SEC.
AdCare Health Systems, Inc. will host a conference call on Tuesday, August 14th, 2007 at 4:15 PM EST. The dial-in number is 1-800-257-7063.
ADCARE HEALTH SYSTEMS, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
June 30, December 31,
2007 2006
(Unaudited)
ASSETS
Current Assets:
Cash $1,302,378 $2,136,414
Certificate of deposit, restricted 202,769 198,266
Accounts receivable:
Long-term care resident receivables,
net 2,081,163 1,949,745
Management, consulting and development
receivables, net 217,794 254,321
Advances and receivables from affiliates 27,631 35,897
Assets of discontinued operations 5,933 4,677
Prepaid expenses and other 605,478 337,638
Total current assets 4,443,146 4,916,958
Restricted Cash 906,693 914,941
Property and Equipment, Net 13,977,909 13,750,870
Note Receivable, Net 239,413 257,413
License, Net 1,189,306 1,189,306
Goodwill 2,638,193 2,638,193
Assets of Discontinued Operations,
Net of Current Portion 859,428 880,430
Other Assets 848,103 838,283
Total assets $25,102,191 $25,386,394
LIABILITIES AND STOCKHOLDERS'
EQUITY
Current Liabilities:
Current portion of notes payable and
other debt $766,835 $744,131
Current portion of note payable to
stockholder 9,466 828,344
Accounts payable and accrued expenses 3,739,382 3,804,590
Liabilities of discontinued operations 21,525 22,177
Total current liabilities 4,537,208 5,399,242
Notes Payable and Other Debt, Net of
Current Portion 12,743,748 12,909,162
Note Payable to Stockholder, Net of
Current Portion 814,232 -
Other Liabilities 293,104 262,597
Forward Purchase Contract 900,000 900,000
Liabilities of Discontinued Operations 854,342 848,394
Minority Interest in Equity of Consolidated
Entities 224,267 160,259
Total liabilities 20,366,901 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 14,033,373 13,857,166
Accumulated deficit (9,298,083) (8,950,426)
Total stockholders' equity 4,735,290 4,906,740
Total liabilities and stockholders'
equity $25,102,191 $25,386,394
ADCARE HEALTH SYSTEMS, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(UNAUDITED)
Three-Months Ended Six-Months Ended
June 30, June 30,
2007 2006 2007 2006
Revenues:
Patient care revenues $5,457,475 $5,159,850 $10,824,117 10,125,515
Management, consulting
and development fee
revenue 414,902 407,732 872,609 837,673
Total revenue 5,872,377 5,567,582 11,696,726 10,963,188
Expenses:
Payroll and related
payroll costs 3,653,871 3,476,800 7,342,447 6,999,432
Other operating expenses 1,924,627 1,859,647 3,704,381 3,511,837
Depreciation and
amortization 237,093 198,597 409,283 372,544
Total expenses 5,815,591 5,535,044 11,456,111 10,883,813
Income from Continuing
Operations 56,786 32,538 240,615 79,375
Other Income (Expense):
Interest income 16,728 430 33,308 2,448
Interest expense, others (221,963) (640,245) (500,749) (1,350,507)
Interest expense, related
parties (17,726) (20,578) (35,683) (42,116)
Minority interest in
(earnings) losses of
consolidated entities (36,134) 36,119 (64,008) 57,534
(259,095) (624,274) (567,132) (1,332,641)
Loss Before Discontinued
Operations (202,309) (591,736) (326,517) (1,253,266)
Discontinued Operations:
Loss from discontinued
operations (10,571) (31,042) (21,140) (24,596)
Net Loss (212,880) (622,778) (347,657) (1,277,862)
Net Loss Per Share, Basic
and Diluted:
Continuing operations $(0.05) $(0.30) $(0.09) $(0.63)
Discontinued operations 0.00 (0.02) 0.00 (0.01)
$(0.05) $(0.32) $(0.09) $(0.64)
Weighted Average Common Shares
Outstanding,
Basic 3,786,129 1,996,072 3,786,129 1,996,072
Diluted 3,786,129 1,996,072 3,786,129 1,996,072
SOURCE AdCare Health Systems, Inc.
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 920 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.