SPRINGFIELD, Ohio, Aug. 19 /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 2008.
Revenues for the quarter ended June 30, 2008 were $6,016,536 as compared to $5,872,377 for the same quarter in 2007, an increase of $144,159. The increase was mostly due to better occupancy at our skilled nursing centers and our assisted living communities and increased rentals at our assisted living communities.
The net income for the quarter ended June 30, 2008 was $22,963 as compared to a loss of $212,880 for the second quarter ended June 30, 2007, an improvement of $235,843. The improvement was due primarily to a gain of $413,593 recognized in the acquisition of the New Lincoln Lodge, a 50 unit retirement and assisted living facility located in Columbus, Ohio. Basic and diluted net income per share for the quarter ended June 30, 2008 was $0.01 as compared to a basic and diluted net loss per share of ($0.05) for the same quarter ended June 30, 2007.
Revenues for the six-months ended June 30, 2008 were $12,009,078 as compared to $11,696,726 for the same period in 2007, an increase of $312,352. Net loss for the six-months ended June 30, 2008 was $116,507 as compared to a loss of $347,657 for the same period in 2007, an improvement of $231,150. The improvement again was due primarily to the gain recognized in the acquisition of the New Lincoln Lodge in the second quarter. Basic and diluted net loss per share for the six-months ended June 30, 2008 was ($0.03) as compared to a basic and diluted net loss per share of ($0.09) for the same six-month period ended June 30, 2007.
David A. Tenwick, Chairman of AdCare, stated that "the Company is continuing to absorb the increased costs of being a public company and being listed on the American Stock Exchange. So far this year, we have refinanced three of our assisted living properties and one of our nursing homes with long term HUD financings. In addition, we continue to look for suitable acquisitions as well as raising additional capital. We believe that being a listed company is helpful in looking for potential acquisitions and raising more capital." The Chairman had two additional announcements to make. Mr. Tenwick stated, "On August 15, 2008, J. Michael Williams, AdCare's Executive Vice President and COO, announced his retirement from AdCare." Mr. Tenwick added, "We wish Mike well and Gary Wade, in addition to his duties as President, will take on all of Mike's operating responsibilities." The second announcement from Mr. Tenwick is that at the special meeting of shareholders held on August 15, 2008, the shareholders approved the issuance of warrants to officers and directors of AdCare to purchase up to 1,092,305 shares of common stock of AdCare. As described in the definitive proxy filed with the SEC on July 24, 2008, the warrants will vest over a period of five years.
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 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 June 30, December 31,
2008 2007
ASSETS (Unaudited)
Current Assets:
Cash $1,053,332 $926,625
Certificate of deposit, restricted 214,363 209,637
Accounts receivable:
Long-term care resident receivables, net 2,041,199 2,115,364
Management, consulting and development
receivables, net 256,086 259,778
Advances and receivables from affiliates 21,187 27,558
Prepaid expenses and other 581,074 453,219
Total current assets 4,167,241 3,992,181 Restricted Cash 712,369 973,975
Property and Equipment, Net 16,965,197 14,425,868
Note Receivable, Net - 221,413
License, Net 1,189,307 1,189,307
Goodwill 2,638,193 2,638,193
Other Assets 1,033,726 1,050,506
Total assets $26,706,033 $24,491,443 LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities:
Current portion of notes payable and other
debt $724,588 $773,279
Current portion of notes payable to stockholder 9,432 9,026
Accounts payable 1,531,418 1,416,313
Accrued expenses 1,901,010 2,060,222
Forward purchase contract 900,000 900,000
Total current liabilities 5,066,448 5,158,840 Notes Payable and Other Debt, Net of Current
Portion 15,217,668 12,813,338
Notes Payable to Stockholder, Net of Current
Portion 801,776 810,084
Other Liabilities 480,521 559,509
Deferred Tax Liability 21,284 -
Minority Interest in Equity of Consolidated
Entities 291,411 255,070
Total liabilities 21,879,108 19,596,841 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; 3,786,129 shares authorized;
3,786,129 shares issued and outstanding 14,112,424 14,063,956
Accumulated deficit (9,285,499) (9,169,354)
Total stockholders' equity 4,826,925 4,894,602
Total liabilities and stockholders' equity $26,706,033 $24,491,443 ADCARE HEALTH SYSTEMS, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited) Three-Months Ended Six-Months Ended
June 30, June 30,
2008 2007 2008 2007
Revenues:
Patient care
revenues $5,574,114 $5,457,475 $11,142,175 $10,824,117
Management,
consulting and
development fee
revenue 442,422 414,902 866,903 872,609
Total revenue 6,016,536 5,872,377 12,009,078 11,696,726 Expenses:
Payroll and related
payroll costs 3,697,477 3,653,871 7,284,874 7,342,447
Other operating
expenses 2,113,128 1,924,627 4,136,385 3,704,381
Depreciation and
amortization 206,324 169,683 433,018 340,087
Total expenses 6,016,929 5,748,181 11,854,277 11,386,915 Income (Loss) from
Continuing Operations (393) 124,196 154,801 309,811
Other Income (Expense):
Interest income 5,096 16,728 14,228 33,308
Interest expense,
others (393,358) (289,373) (619,710) (569,945)
Interest expense,
related parties (13,574) (17,726) (28,446) (35,683)
Minority interest in
earnings (losses) of
consolidated entities 22,241 (36,134) (29,689) (64,008)
(379,595) (326,505) (663,617) (636,328) Gain on Acquisition 413,593 - 413,593 -
Income (Loss) From
Continuing Operations
Before Income Taxes 33,605 (202,309) (95,223) (326,517)
Income Tax Expense (10,642) - (21,284) -
Income (Loss) From
Continuing Operations 22,963 (202,309) (116,507) (326,517) Discontinued Operations:
Loss from discontinued
operations - (10,571) - (21,140)
Net Income (Loss) $22,963 $(212,880) $(116,507) $(347,657) Net Income (Loss) Per Share,
Basic:
Continuing operations $0.01 $(0.05) $(0.03) $(0.09)
Discontinued operations - - - -
$0.01 $(0.05) $(0.03) $(0.09)
Net Income (Loss) Per
Share, Diluted:
Continuing operations $0.01 $(0.05) $(0.03) $(0.09)
Discontinued operations - - - -
$0.01 $(0.05) $(0.03) $(0.09)
Weighted Average Common
Shares Outstanding,
Basic 3,786,129 3,786,129 3,786,129 3,786,129
Diluted 5,609,196 3,786,129 3,786,129 3,786,129 ADCARE HEALTH SYSTEMS, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited) Six-Months Ended June 30,
2008 2007
Cash flows from operating activities:
Net Loss $(116,507) $(347,657)
Add back: loss from discontinued operations - (10,571)
Net loss from continuing operations $(116,507) $(358,228) Adjustments to reconcile net loss from
continuing operations to net cash
provided by (used in) operating activities:
Depreciation and amortization 433,018 340,087
Warrants issued for services 55,105 8,123
Stock option compensation expense 19,151 6,330
Minority interest 29,689 64,008
Note receivable forgiveness exchanged for rent 9,000 18,000
Gain on acquisition (413,593) -
Changes in certain assets and liabilities:
Accounts receivable 78,627 (86,624)
Prepaid expenses and other 153,084 (192,513)
Other assets 780 (9,645)
Accounts payable and accrued expenses (114,350) (65,862)
Income tax liability 21,284 -
Other liabilities (97,485) 75,926
Net cash provided by (used in) operating
activities of continuing operations 57,803 (200,398)
Net cash used in operating activities of
discontinued operations - (4,278)
Net cash provided by (used in) operating
activities 57,803 (204,676)
Cash flow from investing activities:
Proceeds from the sale of assets net
of associated costs 2,500 -
Purchase of property plant and equipment (226,160) (569,895)
Net cash used in investing activities (223,660) (569,895)
Cash flows from financing activities:
Amortization of bond issuance costs 144,475 69,196
Decrease in restricted cash 276,693 8,248
Proceeds from notes payable - 54,000
Cash received upon exercise of warrants - 20,000
Repayment of notes payable to stockholder - (4,646)
Prepaid Financing Costs 111,984 -
Repayment on notes payable (240,588) (201,524)
Net cash provided by (used in) financing
activities of continuing operations 292,564 (54,726)
Net cash provided by (used in) financing
activities of discontinued operations:
Repayment on notes payable of discontinued
operations - (4,739)
Net cash used in financing activities 292,564 (59,465) Net Increase (Decrease) in Cash 126,707 (834,036)
Cash, Beginning 926,625 2,136,414
Cash, Ending $1,053,332 $1,302,378 Supplemental Disclosure of Cash Flow Information:
Cash paid during the year for Interest $265,760 $523,939
Supplemental Disclosure of Non-Cash Activities:
Rent in exchange of note receivable repayment $9,000 $18,000
Acquisition of assets in exchange for note
forgiveness $2,808,736 $-
DATASOURCE: AdCare Health Systems, Inc.
CONTACT: April Spittle, Manager of Corporate Communications, +1-703-893-0021 ext. 108, Web site: http://www.adcarehealth.com/
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