BRENTWOOD, Tenn., Aug. 2, 2017 /PRNewswire/ -- AAC Holdings,
Inc. (NYSE: AAC) announced its results for the second quarter ended
June 30, 2017. All comparisons
included in this release are to the comparable prior-year period
unless otherwise noted.
Second Quarter 2017 Operational and Financial
Highlights:
- Total average census increased 6% to 961; average daily
residential census decreased 2% to 805; average sober living census
increased 77% to 156
- Client admissions increased 4% to 3,008
- Average daily residential revenue (ADR) increased 41% to
$843 and average revenue per
outpatient visit (ARV) increased 30% to $403
- Outpatient visits increased 18% to 15,463
- Client related revenues increased 11% to $75.7 million
- Net loss available to AAC Holdings, Inc. common stockholders
was $1.9 million, or $(0.08) per diluted common share, including a
pre-tax charge of $5.4 million, or
$0.23 per diluted common share, for
debt restructuring costs
- Adjusted EBITDA increased 15% to $14.5
million (see non-GAAP reconciliation herein)
- Adjusted earnings per diluted common share increased 44% to
$0.26 (see non-GAAP reconciliation
herein)
"We have an aggressive plan underway for 2017 to deliver
exceptional clinical quality, achieve operating efficiencies and
complete our bed expansion activity," noted Michael Cartwright, Chairman and Chief Executive
Officer of AAC Holdings, Inc. "Our focus on driving profitable
growth in admissions and census, which is reflected in our higher
facility revenue during the quarter and the year-over-year growth
in net income prior to the debt charges, should also lead to
greater margin and earnings improvement during the remainder of
2017. With the significant improvements we made in the last several
months by simplifying our balance sheet and providing adequate
liquidity and borrowing capacity, we also have greater flexibility
to fund our continued growth."
Capital Structure Improvements
On June 30, the Company simplified
its capital structure and expanded its borrowing capacity with a
new $210.0 million senior secured
term loan facility and $40.0 million
revolving credit facility maturing in June
2023 and June 2022,
respectively. Proceeds were used to payoff $205.4 million in existing term and revolving
credit facilities and the convertible and subordinated notes held
by affiliates of the Company's largest institutional
shareholder.
Second Quarter 2017 compared with Second Quarter 2016
AAC breaks down its revenues between client related revenue and
non-client related revenue. Client related revenue includes: (1)
residential treatment facility services and related professional
services; (2) outpatient facility services, related professional
services and sober living services; and (3) client related
diagnostic services, which includes point of care drug testing and
client related diagnostic laboratory services. Non-client related
revenue includes marketing and diagnostic services provided to
third parties. Prior-period results have been conformed to the
current-period presentation.
Residential treatment facility revenue increased 38% to
$61.8 million compared with
$44.9 million in the same period in
the prior year. Our ADR increased 41% to $843 compared with $600 in the same period in the prior year.
Outpatient and sober living facility revenue increased 55% to
$6.2 million compared with
$4.0 million in the same period in
the prior year. ARV increased 30% to $403 compared with $309 in the same period in the prior year.
The increases in our residential ADR and our ARV are a result of
improved billing and collections activity and an increase in billed
days at higher levels of care.
Client related diagnostic services revenue, which includes point
of care drug testing revenue and client related diagnostic
laboratory services revenue, was down 60% to $7.7 million compared with $19.3 million in the same period in the prior
year. The decrease in client related diagnostic services is a
result of previously anticipated lower reimbursements.
Non-client related revenue declined 30% to $2.4 million compared with $3.3 million in the same period in the prior
year.
Operating expenses, as a percentage of total revenues, decreased
by 5% from the prior year primarily as the result of a decrease in
salaries, wages and benefits. Salaries, wages and benefits,
as a percentage of total revenues, were 44% compared with 51% in
the prior year.
Net loss available to AAC Holdings, Inc. common stockholders was
$1.9 million, or $(0.08) per diluted common share, compared with
net income available to AAC Holdings, Inc. common stockholders of
$0.9 million, or $0.04 per diluted common share, in the prior-year
period. The current period net loss available to AAC Holdings,
Inc. common stockholders includes a loss on extinguishment of debt
related to our recent debt restructuring of $5.4 million, or $0.23 per diluted common share.
Adjusted EBITDA increased to $14.5
million compared with $12.5
million for the same period in the prior year. Adjusted net
income available to AAC Holdings, Inc. common stockholders
increased to $6.1 million, or
$0.26 per diluted common share,
compared with $4.1 million, or
$0.18 per diluted common share, for
the same period in the prior year. Adjusted EBITDA, adjusted net
income available to AAC Holdings, Inc. common stockholders, and
adjusted diluted earnings per share are non-GAAP financial
measures. Tables reconciling these non-GAAP measures to the most
directly comparable GAAP measures, net (loss) income available to
AAC Holdings, Inc. common stockholders, and diluted (loss) earnings
per common share, are included in this release.
De Novo Activity and Bed Expansion Pipeline
At the Oxford Treatment Center in Mississippi, we added an additional 24
residential beds in April 2017,
increasing total residential bed capacity to 124. In
addition, the construction of 48 sober living beds is expected to
be completed in the third quarter of 2017.
At New Orleans East Hospital, we currently anticipate having 36
in-network beds providing detoxification and residential treatment
services operational during the second half of 2017, subject to
receiving licensure.
At Resolutions Arlington, we currently anticipate
increasing available sober living beds from 80 to
155 by mid-year 2018.
As part of our initiative to treat higher acuity clients at our
Laguna Treatment Hospital, effective August
31, we are consolidating operations at our 58-bed Forterus
facility in Temecula, California.
All programming, treatment, detoxification and sober living will be
coordinated through the Laguna facility.
We are relocating our Recovery First West Palm facility from
West Palm Beach, Florida to
Fort Lauderdale, Florida in the
third quarter of 2017. By relocating Recovery First West Palm
closer to our Recovery First facility, we expect to gain additional
operational efficiencies. Following the relocation, Recovery
First West Palm will become known as Recovery First Fort Lauderdale
East.
We expect development of the 150-bed residential treatment
center in Ringwood, New Jersey to
be completed by the end of 2018.
Balance Sheet and Cash Flows
As of June 30, 2017, AAC Holdings'
balance sheet reflected cash and cash equivalents of $10.8 million, net property and equipment of
$149.0 million and total debt of
$213.0 million, net of debt issuance
costs of $12.9 million. Capital
expenditures in the second quarter of 2017 totaled $8.0 million. Cash flows provided by operations
totaled $4.0 million for the second
quarter of 2017 compared with cash flows provided by operations of
$2.0 million in the prior-year
period. Days sales outstanding ("DSO") was 113 for the second
quarter of 2017 compared with 116 for the first quarter of 2017 and
95 for the prior-year period. Our DSO's continue to be impacted by
increased documentation requests by commercial payors prior to
payment, however, our cash collections increased 11% from the first
quarter of 2017 helping to reduce our DSO's during the current
quarter. Provision for doubtful accounts was 12% of total revenues
for the second quarter of 2017 compared with 7% of total revenues
for the prior-year period.
2017 Outlook
AAC maintains its previously issued guidance for total revenue
of $295 million to $305 million and
updates the composition of that revenue guidance as follows:
- Residential treatment facility revenue of approximately
$217 million to $221 million based on
an average daily residential census of 820 to 830 and an ADR of
$725 to $730 (excludes point of care
drug testing and diagnostic lab services)
- Outpatient and sober living facility revenue of approximately
$26 million to $28 million based on
total outpatient visits of 67,000 to 70,000 and an ARV of
$385 to $400 (excludes point of care
drug testing and diagnostic lab services)
- Client related diagnostic services revenue, including point of
care drug testing revenue and client related diagnostic lab
services revenue, of approximately $42
million to $44 million
- Non-client related revenue of approximately $10 million to $12 million related to Referral
Solutions Group and third party laboratory services
AAC maintains its previously issued full year guidance for
adjusted EBITDA of $52 million to $54
million and its full year guidance for adjusted earnings per
diluted common share of $0.50 to
$0.58. The Company expects an annual effective tax rate of
16% to 18% and diluted weighted-average common shares outstanding
of approximately 23 million for the year.
This outlook does not include the impact of any future
acquisitions, transaction-related costs, litigation settlement and
expenses related to legal defenses.
With respect to our "2017 Outlook" above, reconciliation of
adjusted EBITDA and adjusted earnings per diluted common share
guidance to the closest corresponding GAAP measure on a
forward-looking basis is not available without unreasonable
efforts. This inability results from the inherent difficulty in
forecasting generally and quantifying certain projected amounts
that are necessary for such reconciliations. In particular,
sufficient information is not available to calculate certain
adjustments required for such reconciliations, including de novo
start-up and other expense and acquisition-related expenses. We
expect these adjustments may have a potentially significant impact
on our future GAAP financial results.
Earnings Conference Call
The Company will host a conference call and live audio webcast,
both open for the general public to hear, on Thursday, August 3, 2017, at 8:00 a.m. CT to discuss financial results,
business highlights and 2017 guidance. The number to call for this
interactive teleconference is (412) 542-4144. A replay of the
conference call will be available through August 10, 2017, by dialing (412) 317-0088 and
entering the replay access code, 10110621.
The live audio webcast of the Company's quarterly conference
call will be available online at ir.americanaddictioncenters.org.
The online replay will be available on the website one hour after
the call.
About American Addiction Centers
American Addiction Centers is a leading provider of inpatient
and outpatient substance abuse treatment services. We treat clients
who are struggling with drug addiction, alcohol addiction, and
co-occurring mental/behavioral health issues. We currently operate
substance abuse treatment facilities located throughout
the United States. These
facilities are focused on delivering effective clinical care and
treatment solutions. For more information, please find us at
AmericanAddictionCenters.org or follow us on Twitter.
Forward Looking Statements
This release contains forward-looking statements within the
meaning of the federal securities laws. These forward-looking
statements are made only as of the date of this release. In some
cases, you can identify forward-looking statements by terms such as
"anticipates," "believes," "could," "estimates," "expects," "may,"
"potential," "predicts," "projects," "should," "will," "would," and
similar expressions intended to identify forward-looking
statements, although not all forward-looking statements contain
these words. Forward-looking statements may include information
concerning AAC Holdings, Inc.'s (collectively with its
subsidiaries; "Holdings" or the "Company") possible or assumed
future results of operations, including descriptions of Holdings'
revenues, profitability, outlook and overall business strategy.
These statements involve known and unknown risks, uncertainties and
other factors that may cause our actual results and performance to
be materially different from the information contained in the
forward-looking statements. These risks, uncertainties and other
factors include, without limitation: (i) our inability to operate
our facilities; (ii) our reliance on our sales and marketing
program to continuously attract and enroll clients; (iii) a
reduction in reimbursement rates by certain third-party payors for
inpatient and outpatient services and point of care and definitive
lab testing; (iv) an increase in our provision for doubtful
accounts based on the aging of receivables; (v) our failure
to successfully achieve growth through acquisitions and de novo
expansions; (vi) uncertainties regarding the timing of the closing
of acquisitions; (vii) the possibility that a governmental entity
may prohibit, delay or refuse to grant approval for the
consummation of an acquisition; (viii) our failure to achieve
anticipated financial results from prior acquisitions; (ix) a
disruption in our ability to perform definitive drug testing
services; (x) maintaining compliance with applicable regulatory
authorities, licensure and permits to operate our facilities and
lab; (xi) a disruption in our business and reputation and potential
economic consequences with the civil securities claims brought by
shareholders; (xii) our inability to meet our covenants in the loan
documents; (xiii) our inability to integrate newly acquired
facilities; and (xiv) general economic conditions, as well as other
risks discussed in the "Risk Factors" section of the Company's
Annual Report on Form 10-K, and other filings with the Securities
and Exchange Commission. As a result of these factors, we cannot
assure you that the forward-looking statements in this release will
prove to be accurate. Investors should not place undue reliance
upon forward looking statements.
AAC HOLDINGS,
INC.
|
|
|
|
|
|
CONDENSED
CONSOLIDATED STATEMENTS OF OPERATIONS
|
|
|
|
|
|
Unaudited
|
|
|
|
|
|
(Dollars in
thousands, except per share amounts)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months
Ended
|
|
|
Six Months
Ended
|
|
|
|
|
|
June 30,
2017
|
|
|
June 30,
2016
|
|
|
June 30,
2017
|
|
|
June 30,
2016
|
|
|
Revenues
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Client related
revenue
|
$
|
75,692
|
|
|
$
|
68,226
|
|
|
$
|
146,911
|
|
|
$
|
130,932
|
|
|
Non-client related
revenue
|
|
2,350
|
|
|
|
3,316
|
|
|
|
4,170
|
|
|
|
5,958
|
|
|
Total
revenue
|
|
78,042
|
|
|
|
71,542
|
|
|
|
151,081
|
|
|
|
136,890
|
|
|
Operating
expenses
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Salaries, wages and
benefits
|
|
34,508
|
|
|
|
36,191
|
|
|
|
71,280
|
|
|
|
68,162
|
|
|
Client related
services
|
|
6,646
|
|
|
|
5,500
|
|
|
|
13,024
|
|
|
|
10,419
|
|
|
Provision for doubtful
accounts
|
|
9,496
|
|
|
|
4,943
|
|
|
|
16,083
|
|
|
|
10,426
|
|
|
Advertising and
marketing
|
|
3,266
|
|
|
|
4,509
|
|
|
|
7,041
|
|
|
|
8,906
|
|
|
Professional
fees
|
|
3,039
|
|
|
|
3,869
|
|
|
|
5,681
|
|
|
|
8,176
|
|
|
Other operating
expenses
|
|
8,199
|
|
|
|
7,297
|
|
|
|
16,988
|
|
|
|
13,951
|
|
|
Rentals and
leases
|
|
1,849
|
|
|
|
1,892
|
|
|
|
3,734
|
|
|
|
3,424
|
|
|
Depreciation and
amortization
|
|
5,058
|
|
|
|
4,225
|
|
|
|
10,527
|
|
|
|
8,140
|
|
|
Acquisition-related
expenses
|
|
42
|
|
|
|
1,196
|
|
|
|
225
|
|
|
|
1,960
|
|
|
Total operating
expenses
|
|
72,103
|
|
|
|
69,622
|
|
|
|
144,583
|
|
|
|
133,564
|
|
|
Income from
operations
|
|
5,939
|
|
|
|
1,920
|
|
|
|
6,498
|
|
|
|
3,326
|
|
|
Interest
expense
|
|
2,846
|
|
|
|
2,221
|
|
|
|
5,580
|
|
|
|
3,923
|
|
|
Loss on
extinguishment of debt
|
|
5,435
|
|
|
|
—
|
|
|
|
5,435
|
|
|
|
—
|
|
|
Other (income)
expense, net
|
|
(6)
|
|
|
|
(36)
|
|
|
|
28
|
|
|
|
(43)
|
|
|
Loss before income
tax expense (benefit)
|
|
(2,336)
|
|
|
|
(265)
|
|
|
|
(4,545)
|
|
|
|
(554)
|
|
|
Income tax expense
(benefit)
|
|
562
|
|
|
|
(107)
|
|
|
|
(3)
|
|
|
|
(127)
|
|
|
Net loss
|
|
(2,898)
|
|
|
|
(158)
|
|
|
|
(4,542)
|
|
|
|
(427)
|
|
|
Less: net loss
attributable to noncontrolling
interest
|
|
982
|
|
|
|
1,030
|
|
|
|
2,023
|
|
|
|
1,885
|
|
|
Net (loss) income
available to AAC
Holdings, Inc. common
stockholders
|
$
|
(1,916)
|
|
|
$
|
872
|
|
|
$
|
(2,519)
|
|
|
$
|
1,458
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic (loss) earnings
per common share
|
$
|
(0.08)
|
|
|
$
|
0.04
|
|
|
$
|
(0.11)
|
|
|
$
|
0.07
|
|
|
Diluted (loss)
earnings per common share
|
$
|
(0.08)
|
|
|
$
|
0.04
|
|
|
$
|
(0.11)
|
|
|
$
|
0.06
|
|
|
Weighted-average
common shares
outstanding:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic
|
|
23,242,177
|
|
|
|
22,761,671
|
|
|
|
23,203,081
|
|
|
|
22,429,948
|
|
|
Diluted
|
|
23,242,177
|
|
|
|
22,811,345
|
|
|
|
23,203,081
|
|
|
|
22,499,064
|
|
|
AAC HOLDINGS,
INC.
|
|
|
|
CONDENSED
CONSOLIDATED BALANCE SHEETS
|
|
|
|
Unaudited
|
|
|
|
(Dollars in
thousands)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
June
30,
|
|
|
December
31,
|
|
|
|
|
|
2017
|
|
|
2016
|
|
|
|
Assets
|
|
|
|
|
|
|
|
|
|
|
Current
assets
|
|
|
|
|
|
|
|
|
|
|
Cash and cash
equivalents
|
|
$
|
10,793
|
|
|
$
|
3,964
|
|
|
|
Accounts receivable,
net of allowances
|
|
|
96,527
|
|
|
|
87,334
|
|
|
|
Prepaid expenses and
other current assets
|
|
|
4,456
|
|
|
|
5,181
|
|
|
|
Total current
assets
|
|
|
111,776
|
|
|
|
96,479
|
|
|
|
Property and
equipment, net
|
|
|
148,965
|
|
|
|
141,307
|
|
|
|
Goodwill
|
|
|
134,396
|
|
|
|
134,396
|
|
|
|
Intangible assets,
net
|
|
|
9,551
|
|
|
|
10,356
|
|
|
|
Deferred tax
assets
|
|
|
1,180
|
|
|
|
598
|
|
|
|
Other
assets
|
|
|
783
|
|
|
|
748
|
|
|
|
Total
assets
|
|
$
|
406,651
|
|
|
$
|
383,884
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Liabilities and
Stockholders' Equity
|
|
|
|
|
|
|
|
|
|
|
Current
liabilities
|
|
|
|
|
|
|
|
|
|
|
Accounts
payable
|
|
$
|
10,441
|
|
|
$
|
9,155
|
|
|
|
Accrued
liabilities
|
|
|
24,800
|
|
|
|
26,742
|
|
|
|
Current portion of
long-term debt
|
|
|
4,503
|
|
|
|
9,445
|
|
|
|
Total current
liabilities
|
|
|
39,744
|
|
|
|
45,342
|
|
|
|
Long-term debt, net
of current portion and debt issuance costs
|
|
|
208,467
|
|
|
|
179,661
|
|
|
|
Other long-term
liabilities
|
|
|
3,782
|
|
|
|
4,093
|
|
|
|
Total
liabilities
|
|
|
251,993
|
|
|
|
229,096
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Stockholders'
equity
|
|
|
166,999
|
|
|
|
165,106
|
|
|
|
Noncontrolling
interest
|
|
|
(12,341)
|
|
|
|
(10,318)
|
|
|
|
Total stockholders'
equity including noncontrolling interest
|
|
|
154,658
|
|
|
|
154,788
|
|
|
|
Total liabilities
and stockholders' equity
|
|
$
|
406,651
|
|
|
$
|
383,884
|
|
|
|
AAC HOLDINGS,
INC.
|
|
|
|
CONDENSED
CONSOLIDATED STATEMENTS OF CASH FLOWS
|
|
|
|
Unaudited
|
|
|
|
(Dollars in
thousands)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Six Months
Ended
|
|
|
|
|
|
June 30,
2017
|
|
|
June 30,
2016
|
|
|
Cash flows from
operating activities:
|
|
|
|
|
|
|
|
|
|
Net loss
|
|
$
|
(4,542)
|
|
|
$
|
(427)
|
|
|
Adjustments to
reconcile net loss to net cash provided by operating
activities:
|
|
|
|
|
|
|
|
|
|
Provision for doubtful
accounts
|
|
|
16,083
|
|
|
|
10,426
|
|
|
Depreciation and
amortization
|
|
|
10,527
|
|
|
|
8,140
|
|
|
Equity
compensation
|
|
|
4,189
|
|
|
|
4,776
|
|
|
Loss on extinguishment
of debt
|
|
|
5,435
|
|
|
|
—
|
|
|
Amortization of debt
issuance costs
|
|
|
364
|
|
|
|
208
|
|
|
Deferred income
taxes
|
|
|
(582)
|
|
|
|
(145)
|
|
|
Changes in operating
assets and liabilities:
|
|
|
|
|
|
|
|
|
|
Accounts
receivable
|
|
|
(25,276)
|
|
|
|
(21,189)
|
|
|
Prepaid expenses and
other assets
|
|
|
690
|
|
|
|
920
|
|
|
Accounts
payable
|
|
|
1,286
|
|
|
|
1,169
|
|
|
Accrued
liabilities
|
|
|
526
|
|
|
|
2,422
|
|
|
Other long term
liabilities
|
|
|
(311)
|
|
|
|
18
|
|
|
Net cash provided by
operating activities
|
|
|
8,389
|
|
|
|
6,318
|
|
|
Cash flows from
investing activities:
|
|
|
|
|
|
|
|
|
|
Purchase of property
and equipment
|
|
|
(18,665)
|
|
|
|
(19,745)
|
|
|
Acquisition of
subsidiaries, net of cash acquired
|
|
|
—
|
|
|
|
(19,150)
|
|
|
Net cash used in
investing activities
|
|
|
(18,665)
|
|
|
|
(38,895)
|
|
|
Cash flows from
financing activities:
|
|
|
|
|
|
|
|
|
|
Payments on 2015
Credit Facility and Deerfield Facility, net of borrowings
on 2015 Credit Facility revolver
|
|
|
(193,094)
|
|
|
|
22,625
|
|
|
Proceeds from 2017
Revolving Facility, net of debt issuance costs
|
|
|
9,169
|
|
|
|
—
|
|
|
Proceeds from 2017
Term Loan, net of debt issuance costs
|
|
|
202,325
|
|
|
|
—
|
|
|
Payments on capital
leases
|
|
|
(400)
|
|
|
|
(334)
|
|
|
Payment of employee
taxes for net share settlement
|
|
|
(895)
|
|
|
|
—
|
|
|
Repayment of long-term
debt — related party
|
|
|
—
|
|
|
|
(1,195)
|
|
|
Net cash provided by
financing activities
|
|
|
17,105
|
|
|
|
21,096
|
|
|
Net change in cash
and cash equivalents
|
|
|
6,829
|
|
|
|
(11,481)
|
|
|
Cash and cash
equivalents, beginning of period
|
|
|
3,964
|
|
|
|
18,750
|
|
|
Cash and cash
equivalents, end of period
|
|
$
|
10,793
|
|
|
$
|
7,269
|
|
|
AAC HOLDINGS,
INC.
|
|
|
|
OPERATING
METRICS
|
|
|
|
Unaudited
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months
Ended
|
|
|
Six Months
Ended
|
|
|
|
|
June 30,
2017
|
|
|
June 30,
2016
|
|
|
June 30,
2017
|
|
|
June 30,
2016
|
|
|
Operating
Metrics:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
New
admissions1
|
|
3,008
|
|
|
|
2,890
|
|
|
|
6,224
|
|
|
|
5,513
|
|
|
Average daily
residential census2
|
|
805
|
|
|
|
821
|
|
|
|
804
|
|
|
|
793
|
|
|
Average daily sober
living census3
|
|
156
|
|
|
|
88
|
|
|
|
155
|
|
|
|
84
|
|
|
Total
census
|
|
961
|
|
|
|
909
|
|
|
|
959
|
|
|
|
877
|
|
|
Average episode
length (days)4
|
|
28
|
|
|
|
28
|
|
|
|
28
|
|
|
|
28
|
|
|
Average daily
residential revenue5
|
$
|
843
|
|
|
$
|
600
|
|
|
$
|
764
|
|
|
$
|
621
|
|
|
Average net daily
residential revenue6
|
$
|
752
|
|
|
$
|
566
|
|
|
$
|
696
|
|
|
$
|
582
|
|
|
Revenue per
admission7
|
$
|
25,164
|
|
|
$
|
23,608
|
|
|
$
|
23,604
|
|
|
$
|
23,684
|
|
|
Outpatient
visits8
|
|
15,463
|
|
|
|
13,079
|
|
|
|
32,013
|
|
|
|
18,057
|
|
|
Average revenue per
outpatient visit9
|
$
|
403
|
|
|
$
|
309
|
|
|
$
|
373
|
|
|
$
|
329
|
|
|
Client related
diagnostic services10
|
|
10
|
%
|
|
|
28
|
%
|
|
|
16
|
%
|
|
|
27
|
%
|
|
Residential bed count
at end of period11
|
|
1,100
|
|
|
|
1,139
|
|
|
|
1,100
|
|
|
|
1,139
|
|
|
Effective residential
bed count at end of
period12
|
|
957
|
|
|
|
1,064
|
|
|
|
957
|
|
|
|
1,064
|
|
|
Average effective
residential bed
utilization13
|
|
80
|
%
|
|
|
82
|
%
|
|
|
78
|
%
|
|
|
84
|
%
|
|
Days sales
outstanding (DSO)14
|
|
113
|
|
|
|
95
|
|
|
|
116
|
|
|
|
99
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1
|
Represents total
client admissions at our owned and leased residential facilities
for the period presented.
|
2
|
Represents average
daily client census at all of our residential
facilities.
|
3
|
Represents average
daily client census at Resolutions Oxford, Resolutions Las Vegas
and Resolutions Arlington.
|
4
|
Average episode
length is the consecutive number of days from admission
to discharge that a client stays at an AAC
residential facility and, when applicable, an AAC sober
living facility.
|
5
|
Average daily
residential revenue is calculated as total revenues from all of our
owned and leased residential facilities, less client related
diagnostic services revenue, during the period divided by the
product of the number of days in the period multiplied by average
daily residential census.
|
6
|
Average net daily
residential revenue is calculated as total revenues from all of our
owned and leased residential facilities, less client related
diagnostic services revenue, and less provision for doubtful
accounts during the period, divided by the product of the number of
days in the period multiplied by average daily residential
census.
|
7
|
Revenue per admission
is calculated by dividing client related revenue by new admissions.
This metric includes community based revenue.
|
8
|
Represents the total
number of outpatient visits at our standalone outpatient centers
during the period.
|
9
|
Average revenue per
outpatient visit is calculated as total revenues from all of our
owned and leased standalone outpatient facilities, less client
related diagnostic services revenue, during the period divided by
the number of outpatient visits during the period.
|
10
|
Client related
diagnostic services revenue, as a percentage of client related
revenue, includes point-of-care and client related diagnostic
laboratory services.
|
11
|
Residential bed count
at end of period includes all beds at owned and leased inpatient
facilities.
|
12
|
Effective bed count
at end of period represents the number of beds for which our
facilities are staffed based on planned census.
|
13
|
Average effective
residential bed utilization represents average daily residential
census divided by the average effective residential bed count
during the quarter.
|
14
|
Days sales
outstanding is calculated as accounts receivable, net of allowance
for doubtful accounts, at the end of the period divided by revenues
per day. Revenues per day is calculated by dividing revenues for
the period by the number of days in the period.
|
AAC HOLDINGS,
INC.
|
|
|
|
SUPPLEMENTAL
RECONCILIATION OF NON-GAAP DISCLOSURES
|
|
|
|
Unaudited
|
|
|
|
(Dollars in
thousands)
|
|
|
|
|
|
|
|
Reconciliation of
Adjusted EBITDA to Net (Loss) Income Available to AAC Holdings,
Inc. Common
Stockholders
|
|
|
|
|
|
|
|
|
Three Months
Ended
|
|
|
Six Months
Ended
|
|
|
|
|
June 30,
2017
|
|
|
June 30,
2016
|
|
|
June 30,
2017
|
|
|
June 30,
2016
|
|
|
Net (loss) income
available to AAC Holdings,
Inc. common stockholders
|
$
|
(1,916)
|
|
|
$
|
872
|
|
|
$
|
(2,519)
|
|
|
$
|
1,458
|
|
|
Non-GAAP
Adjustments:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest
expense
|
|
2,846
|
|
|
|
2,221
|
|
|
|
5,580
|
|
|
|
3,923
|
|
|
Depreciation and
amortization
|
|
5,058
|
|
|
|
4,225
|
|
|
|
10,527
|
|
|
|
8,140
|
|
|
Income tax expense
(benefit)
|
|
562
|
|
|
|
(107)
|
|
|
|
(3)
|
|
|
|
(127)
|
|
|
Net loss attributable
to noncontrolling interest
|
|
(982)
|
|
|
|
(1,030)
|
|
|
|
(2,023)
|
|
|
|
(1,885)
|
|
|
Stock-based
compensation and related tax
reimbursements
|
|
2,052
|
|
|
|
2,137
|
|
|
|
4,189
|
|
|
|
4,775
|
|
|
Litigation settlement
and California matter
related expense
|
|
402
|
|
|
|
1,311
|
|
|
|
561
|
|
|
|
3,636
|
|
|
Acquisition-related
expense
|
|
42
|
|
|
|
1,298
|
|
|
|
314
|
|
|
|
2,158
|
|
|
De novo start-up and
other expense
|
|
928
|
|
|
|
1,243
|
|
|
|
4,282
|
|
|
|
2,105
|
|
|
Employee severance
expense
|
|
46
|
|
|
|
—
|
|
|
|
789
|
|
|
|
—
|
|
|
Loss on extinguishment
of debt
|
|
5,435
|
|
|
|
—
|
|
|
|
5,435
|
|
|
|
—
|
|
|
Facility closure
operating losses and expense
|
|
—
|
|
|
|
367
|
|
|
|
—
|
|
|
|
367
|
|
|
Adjusted
EBITDA
|
$
|
14,473
|
|
|
$
|
12,537
|
|
|
$
|
27,132
|
|
|
$
|
24,550
|
|
|
Adjusted EBITDA, adjusted net income available to AAC Holdings,
Inc. common stockholders, and adjusted diluted earnings per common
share (herein collectively referred to as "Non-GAAP Disclosures")
are "non-GAAP financial measures" as defined under the rules and
regulations promulgated by the U.S. Securities and Exchange
Commission, each of which are defined below. Management
believes the Non-GAAP Disclosures provide investors with additional
meaningful financial information that should be considered when
assessing our underlying business performance and trends. We
believe the Non-GAAP Disclosures also enhance investors' ability to
compare period-to-period financial results. The Non-GAAP
Disclosures should not be considered as measures of financial
performance under U.S. generally accepted accounting principles
("GAAP"). The items excluded from the Non-GAAP Disclosures
are significant components in understanding and assessing our
financial performance and should not be considered as an
alternative to net income or other financial statement items
presented in the condensed consolidated financial statements.
Because the Non-GAAP Disclosures are not measures determined in
accordance with GAAP, the Non-GAAP Disclosures may not be
comparable to other similarly titled measures of other
companies.
Management defines adjusted EBITDA as net (loss) income
available to AAC Holdings, Inc. common stockholders adjusted for
interest expense, depreciation and amortization expense, income tax
benefit, net loss attributable to noncontrolling interest,
stock-based compensation and related tax reimbursements, litigation
settlement and California matter
related expense, acquisition-related expense (which includes
professional services for accounting, legal, valuation services and
licensing expenses), de novo start-up and other expenses, employee
severance expense, loss on extinguishment of debt, and facility
closure operating losses and expense.
AAC HOLDINGS,
INC.
|
|
|
|
SUPPLEMENTAL
RECONCILIATION OF NON-GAAP DISCLOSURES
|
|
|
|
Unaudited
|
|
|
|
(Dollars in
thousands, except per share amounts)
|
|
|
|
Reconciliation of
Adjusted Net Income Available to AAC Holdings, Inc. Common
Stockholders to Net (Loss)
Income Available to AAC Holdings, Inc. Common
Stockholders
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months
Ended
|
|
|
Six Months
Ended
|
|
|
|
|
June 30,
2017
|
|
|
June 30,
2016
|
|
|
June 30,
2017
|
|
|
June 30,
2016
|
|
|
Net (loss)
income available to AAC Holdings,
Inc. common stockholders
|
$
|
(1,916)
|
|
|
$
|
872
|
|
|
$
|
(2,519)
|
|
|
$
|
1,458
|
|
|
Non-GAAP
Adjustments:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Litigation settlement
and California matter
related expense
|
|
402
|
|
|
|
1,311
|
|
|
|
561
|
|
|
|
3,636
|
|
|
Acquisition-related
expense
|
|
42
|
|
|
|
1,298
|
|
|
|
314
|
|
|
|
2,158
|
|
|
De novo start-up and
other expense
|
|
928
|
|
|
|
1,243
|
|
|
|
4,282
|
|
|
|
2,105
|
|
|
Employee severance
expense
|
|
46
|
|
|
|
—
|
|
|
|
789
|
|
|
|
—
|
|
|
Loss on extinguishment
of debt
|
|
5,435
|
|
|
|
—
|
|
|
|
5,435
|
|
|
|
—
|
|
|
Facility closure
operating losses and expense
|
|
—
|
|
|
|
367
|
|
|
|
—
|
|
|
|
367
|
|
|
Income tax effect of
non-GAAP adjustments
|
|
1,158
|
|
|
|
(967)
|
|
|
|
—
|
|
|
|
(1,247)
|
|
|
Adjusted net income
available to AAC Holdings,
Inc. common stockholders
|
$
|
6,095
|
|
|
$
|
4,124
|
|
|
$
|
8,862
|
|
|
$
|
8,477
|
|
|
Weighted-average
common shares outstanding -
diluted
|
|
23,242,177
|
|
|
|
22,811,345
|
|
|
|
23,203,081
|
|
|
|
22,499,064
|
|
|
GAAP diluted earnings
per common share
|
$
|
(0.08)
|
|
|
$
|
0.04
|
|
|
$
|
(0.11)
|
|
|
$
|
0.06
|
|
|
Adjusted diluted
earnings per common share
|
$
|
0.26
|
|
|
$
|
0.18
|
|
|
$
|
0.38
|
|
|
$
|
0.38
|
|
|
Management defines adjusted net income available to AAC
Holdings, Inc. common stockholders as net income (loss) available
to AAC Holdings, Inc. common stockholders adjusted for litigation
settlement and California matter
related expense, acquisition-related expense (which includes
professional services for accounting, legal, valuation services and
licensing expenses), de novo start-up and other expenses, employee
severance expense, loss on extinguishment of debt, facility closure
operating losses and expense, and the income tax effect of the
non-GAAP adjustments at the then applicable effective tax rate.
Adjusted diluted earnings per common share represents diluted
earnings per common share calculated using adjusted net income
available to AAC Holdings, Inc. common stockholders as opposed to
net income available to AAC Holdings, Inc. common stockholders.
With respect to our "2017 Outlook" above, reconciliation of
adjusted EBITDA and adjusted earnings per diluted common share
guidance to the closest corresponding GAAP measure on a
forward-looking basis is not available without unreasonable
efforts. This inability results from the inherent difficulty in
forecasting generally and quantifying certain projected amounts
that are necessary for such reconciliations. In particular,
sufficient information is not available to calculate certain
adjustments required for such reconciliations, including
acquisition-related expenses and de novo start-up and other
expense. We expect these adjustments may have a potentially
significant impact on our future GAAP financial results.
AAC HOLDINGS,
INC.
|
|
|
|
SUPPLEMENTAL
RECONCILIATION OF NON-GAAP DISCLOSURES
|
|
|
|
Unaudited
|
|
|
|
(Dollars in
thousands)
|
|
|
|
|
|
|
|
Reconciliation of
Client Related Revenue Net of De novo and Certain Operating
Expenses to Client Related
Revenue and Certain Operating Expenses
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
The table below
provides supplemental detail on how certain Non-GAAP adjustments
impact client related revenue and certain operating expenses.
Management believes these Non-GAAP Disclosures provide investors
with additional meaningful financial information that should be
considered when assessing our underlying business performance and
trends and enhance the investors' ability to compare
period-to-period financial results.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months
Ended
|
|
|
Six Months
Ended
|
|
|
|
|
June 30,
2017
|
|
|
June 30,
2016
|
|
|
June 30,
2017
|
|
|
June 30,
2016
|
|
Client related
revenue
|
$
|
75,692
|
|
|
$
|
68,226
|
|
|
$
|
146,911
|
|
|
$
|
130,932
|
|
Non-GAAP
Adjustments:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
De novo start-up
expense and other(1)
|
|
(38)
|
|
|
|
(61)
|
|
|
|
(2,645)
|
|
|
|
(2,482)
|
|
Facility closure
operating losses and
expense(2)
|
|
—
|
|
|
|
12
|
|
|
|
—
|
|
|
|
12
|
|
Adjusted client
related revenue net of de
novo and facility closure operating losses
|
$
|
75,654
|
|
|
$
|
68,177
|
|
|
$
|
144,266
|
|
|
$
|
128,462
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Salaries, wages and
benefits
|
|
34,508
|
|
|
|
36,191
|
|
|
|
71,280
|
|
|
|
68,162
|
|
Non-GAAP
Adjustments:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Stock-based
compensation
|
|
(2,052)
|
|
|
|
(2,137)
|
|
|
|
(4,189)
|
|
|
|
(4,775)
|
|
De novo start-up
expense and other(1)
|
|
(524)
|
|
|
|
(876)
|
|
|
|
(3,381)
|
|
|
|
(2,805)
|
|
Acquisition-related
expense
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
(59)
|
|
Employee severance
expense
|
|
(46)
|
|
|
|
—
|
|
|
|
(789)
|
|
|
|
—
|
|
Facility closure
operating losses and
expense(2)
|
|
—
|
|
|
|
4
|
|
|
|
—
|
|
|
|
4
|
|
Adjusted salaries,
wages, and benefits
|
$
|
31,886
|
|
|
$
|
33,182
|
|
|
$
|
62,921
|
|
|
$
|
60,527
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Client related
services
|
$
|
6,646
|
|
|
$
|
5,500
|
|
|
$
|
13,024
|
|
|
$
|
10,419
|
|
Non-GAAP
Adjustments:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
De novo start-up
expense and other(1)
|
|
(81)
|
|
|
|
(19)
|
|
|
|
(590)
|
|
|
|
(289)
|
|
Adjusted client
related services
|
$
|
6,565
|
|
|
$
|
5,481
|
|
|
$
|
12,434
|
|
|
$
|
10,130
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Provision for
doubtful accounts
|
$
|
9,496
|
|
|
$
|
4,943
|
|
|
$
|
16,083
|
|
|
$
|
10,426
|
|
Non-GAAP
Adjustments:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
De novo start-up
expense and other(1)
|
|
—
|
|
|
|
—
|
|
|
|
(95)
|
|
|
|
(3)
|
|
Facility closure
operating losses and
expense(2)
|
|
—
|
|
|
|
(55)
|
|
|
|
—
|
|
|
|
(55)
|
|
Adjusted provision
for doubtful accounts
|
$
|
9,496
|
|
|
$
|
4,888
|
|
|
$
|
15,988
|
|
|
$
|
10,368
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Advertising and
marketing
|
$
|
3,266
|
|
|
$
|
4,509
|
|
|
$
|
7,041
|
|
|
$
|
8,906
|
|
Non-GAAP
Adjustments:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
De novo start-up
expense and other(1)
|
|
—
|
|
|
|
(1)
|
|
|
|
(1,319)
|
|
|
|
(440)
|
|
Adjusted advertising
and marketing
|
$
|
3,266
|
|
|
$
|
4,508
|
|
|
$
|
5,722
|
|
|
$
|
8,466
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Professional
fees
|
$
|
3,039
|
|
|
$
|
3,869
|
|
|
$
|
5,681
|
|
|
$
|
8,176
|
|
Non-GAAP
Adjustments:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Litigation settlement
and California
matter related expense
|
|
(402)
|
|
|
|
(1,311)
|
|
|
|
(561)
|
|
|
|
(3,636)
|
|
Acquisition-related
expense
|
|
—
|
|
|
|
(102)
|
|
|
|
(89)
|
|
|
|
(139)
|
|
De novo start-up
expense and other(1)
|
|
(2)
|
|
|
|
(6)
|
|
|
|
(47)
|
|
|
|
(11)
|
|
Facility closure
operating losses and
expense(2)
|
|
—
|
|
|
|
(5)
|
|
|
|
—
|
|
|
|
(5)
|
|
Adjusted professional
fees
|
$
|
2,635
|
|
|
$
|
2,445
|
|
|
$
|
4,984
|
|
|
$
|
4,385
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other operating
expenses
|
$
|
8,199
|
|
|
$
|
7,297
|
|
|
$
|
16,988
|
|
|
$
|
13,951
|
|
Non-GAAP
Adjustments:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
De novo start-up
expense and other(1)
|
|
(238)
|
|
|
|
(359)
|
|
|
|
(1,221)
|
|
|
|
(837)
|
|
Facility closure
operating losses and
expense(2)
|
|
—
|
|
|
|
(78)
|
|
|
|
—
|
|
|
|
(78)
|
|
Adjusted other
operating expenses
|
$
|
7,961
|
|
|
$
|
6,860
|
|
|
$
|
15,767
|
|
|
$
|
13,036
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Rentals and
leases
|
$
|
1,849
|
|
|
$
|
1,892
|
|
|
$
|
3,734
|
|
|
$
|
3,424
|
|
Non-GAAP
Adjustments:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
De novo start-up
expense and other(1)
|
|
(121)
|
|
|
|
—
|
|
|
|
(274)
|
|
|
|
(159)
|
|
Facility closure
operating losses and
expense(2)
|
|
—
|
|
|
|
(162)
|
|
|
|
—
|
|
|
|
(162)
|
|
Adjusted rentals and
leases
|
$
|
1,728
|
|
|
$
|
1,730
|
|
|
$
|
3,460
|
|
|
$
|
3,103
|
|
|
|
(1)
|
De novo start-up
expenses and other primarily relate to de novo facility net
operating losses with respect to the opening of a de novo facility
and continuing for a period of time after the facility has begun to
accept clients, historically six to nine months, as the operations
and census increase to what we believe are normalized operating
levels.
|
View original
content:http://www.prnewswire.com/news-releases/aac-holdings-inc-reports-second-quarter-2017-results-300498691.html
SOURCE American Addiction Centers