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AdCare Health Systems, Inc. Reports 2009 Third Quarter Earnings Results; Third Consecutive Profitable Quarter

SPRINGFIELD, Ohio, November 16, 2009 /PRNewswire-FirstCall/ – AdCare Health Systems, Inc. (NYSE AMEX: ADK), an Ohio based long term care, home care and management company, today reported financial results for its third quarter of 2009.

Revenues for the quarter ended September 30, 2009 were $6,909,499 as compared to $6,185,760 for the same quarter in 2008, an increase of $723,739. The increase was mostly due to better occupancy at our skilled nursing centers and improved revenues at our home health care provider. Also, there was an increase in the number of patients covered by Medicare at our nursing centers as well as covered for services provided by our home health care agency.

The net income attributable to AdCare Health Systems for the quarter ended September 30, 2009 was $200,017 as compared to a loss of $664,449 for the third quarter ended September 30, 2008, an improvement of $864,466. Basic and diluted net income per share for the quarter ended September 30, 2009 was $0.05 as compared to a basic and diluted net loss per share of ($0.18) for the same quarter ended September 30, 2008, an improvement of $0.23 per share.

Revenues for the nine-months ended September 30, 2009 were $19,907,515 as compared to $18,194,838 for the same period in 2008, an increase of $1,712,677. Net income attributable to AdCare Health Systems for the nine-months ended September 30, 2009 was $442,932 as compared to a loss of $780,595 for the same period in 2008, an improvement of $1,223,527. The increase was again mostly due to better occupancy at our skilled nursing centers and improved revenues at our home health care division together with servicing more Medicare patients. The significant improvement in net income would have been higher without the $413,954 gain on the acquisition of the Lincoln Lodge in the second quarter of 2008. Basic and diluted net income per share for the nine-months ended September 30, 2009 was $0.12 as compared to a basic and diluted net loss per share of ($0.21) for the same nine-months period ended September 30, 2008, an improvement of $0.33 per share.

David A. Tenwick, Chairman of AdCare, stated that “all the hard work since becoming a public company is starting to pay off with three consecutive profitable quarters. We have been able to increase revenues and occupancy at several of our facilities, control expenses in this difficult economic environment; and at the same time, maintain our commitment to be the provider of choice in the areas we serve by providing quality care.” He continued, “Our financial performance continues to improve with income from operations for the first nine months of 2009, increasing to $1,429,701 from a loss of $131,766 for the same period last year. In addition, we continued to improve our working capital position by $919,020, since the end of 2008 with current assets now $378,998 more than current liabilities.” He added that “AdCare is now focusing on acquisition opportunities in the health care field that will expand our operations, and is confident that Chris Brogdon, recently appointed Chief Acquisition Officer, will be able to accelerate this expansion through his efforts to locate and assist in funding selective acquisitions of nursing homes and assisted living facilities.”

On November 10, 2009, AdCare refinanced its 30-unit assisted living facility located in Van Wert, Ohio. AdCare was the developer and is the owner and manager of the property. Red Mortgage Capital, Inc., as FHA/LEAN lender, processed and funded the total $2,181,200 Section 232/223(f) refinancing at an annual interest rate of 5.1% for a period of 35 years. The Company now has long term, fixed rate HUD financing in place on all eight properties in which the Company has ownership interests.

About AdCare Health Systems, Inc.

AdCare Health Systems, Inc. (NYSE AMEX: ADK - News) 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, management services and other services for patients and residents residing in 20 facilities, seven of which are assisted living facilities, twelve skilled nursing centers and one independent senior living community. 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.