SPRINGFIELD, Ohio, Nov. 14 /PRNewswire-FirstCall/ -- AdCare Health Systems, Inc. (NYSE:ADK), an Ohio based long term care, home health care and management company, today reported financial results for the third quarter of 2008.
Revenues for the quarter ended September 30, 2008 were $6,185,760 as compared to $5,906,326 for the same quarter in 2007, an increase of $279,434. The increase was mostly due to improved occupancy at the skilled nursing centers and increased rentals at the assisted living communities.
The loss from continuing operations for the quarter ended September 30, 2008 was $664,449 as compared to a loss of $212,838 for the same quarter in 2007, an increase of $451,611. This increase in loss was due primarily to an accrual of $162,000 in payroll expenses related to the retirement of the Company's former Chief Operating Officer and $223,000 in non-cash charges related to the new warrants issued to Officers and Directors which were approved by shareholders. Basic and diluted net loss from continuing operations per share for the quarter ended September 30, 2008 was ($0.18) as compared to a basic and diluted net loss from continuing operations per share of ($0.06) for the same quarter ended September 30, 2007.
Revenues for the nine-months ended September 30, 2008 were $18,194,838 as compared to $17,603,051 for the same period in 2007, an increase of $591,787. The loss from continuing operations for the nine-months ended September 30, 2008 was $780,595 as compared to a loss of $539,360 for the same period in 2007, an increase in the loss of $241,235. Basic and diluted net loss from continuing operations per share for the nine-months ended September 30, 2008 was ($0.21) as compared to a basic and diluted net loss from continuing operations per share of ($0.14) for the same nine-month period ended September 30, 2007.
During the third quarter, the Company completed the renovation of Hearth & Care of Greenfield, a 50-bed single story nursing home facility located in Greenfield, Ohio. With the addition of 10 private bedrooms and other improvements totaling 10,550 square feet, the Company was also able to refinance the facility and increase cash-on-hand and improve the balance sheet flexibility by recovering $800,000 previously invested in the renovation of the property. Red Mortgage Capital, Inc., an FHA/MAP lender, processed and funded the $2,524,800 232/223(f) refinancing at an annual interest rate of 6.50% for a period of 30 years. The Company now has long term, fixed rate HUD financing in place on seven of the eight properties in which the Company has ownership interests. The Company plans to start the process of refinancing its remaining property in the near future.
David A. Tenwick, Chairman of AdCare, stated that "the Company is now listed on the New York Stock Exchange Alternext US as a result of the New York and American Stock Exchange merger. We are excited about the change and believe the new listing can help us in the implementation of our acquisition strategy and improve our access to the capital markets. We need to grow in order to defray the cost of being a small public company in today's market. We have also re-engaged our Investment Banking Firm, GCC-Prospect Corp., to assist us in the process of evaluating several potential acquisitions and exploring other business opportunities, including new long term care management contracts and leases, which can help us to execute our growth strategy." About AdCare Health Systems, Inc.
AdCare Health Systems, Inc. (NYSE:ADK) develops, owns and manages assisted living facilities, nursing homes and retirement communities and provides home health care services. Prior to becoming a publicly trading 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
September 30, December 31,
2008 2007
ASSETS (Unaudited)
Current Assets:
Cash $1,961,314 $926,625
Certificate of deposit, restricted - 209,637
Accounts receivable:
Long-term care resident receivables, net 1,761,038 2,115,364
Management, consulting and development
receivables, net 294,763 259,778
Advances and receivables from affiliates 20,000 27,558
Prepaid expenses and other 472,696 453,219
Total current assets 4,509,811 3,992,181 Restricted Cash 1,105,973 973,975
Property and Equipment, Net 16,806,150 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 1,108,491 1,050,506
Total assets $27,357,925 $24,491,443 LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities:
Current portion of notes payable and
other debt $604,893 $ 773,279
Current portion of notes payable to
stockholder 9,432 9,026
Accounts payable 1,205,740 1,416,313
Accrued expenses 2,549,187 2,060,222
Forward purchase contract 900,000 900,000
Total current liabilities 5,269,252 5,158,840 Notes Payable and Other Debt, Net of
Current Portion 16,886,455 12,813,338
Notes Payable to Stockholder, Net of
Current Portion 38,313 810,084
Other Liabilities 489,689 559,509
Deferred Tax Liability 31,925 -
Minority Interest in Equity of
Consolidated Entities 240,853 255,070
Total liabilities 22,956,487 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; 14,500,000
shares authorized; 3,786,129 shares
issued and outstanding 14,351,387 14,063,956
Accumulated deficit (9,949,949) (9,169,354)
Total stockholders' equity 4,401,438 4,894,602
Total liabilities and stockholders'
equity $27,357,925 $24,491,443 See notes to consolidated financial statements ADCARE HEALTH SYSTEMS, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
Three-Months Ended Nine-Months Ended
September 30, September 30,
2008 2007 2008 2007
Revenues:
Patient care revenues $5,731,938 $5,468,027 $16,874,113 $16,292,143
Management, consulting
and development fee
revenue 453,822 438,299 1,320,725 1,310,908
Total revenue 6,185,760 5,906,326 18,194,838 17,603,051 Expenses:
Payroll and related
payroll costs 4,162,908 3,746,406 11,447,782 11,088,853
Other operating
expenses 2,086,919 1,855,225 6,223,303 5,559,608
Depreciation and
amortization 222,500 170,103 655,519 510,191
Total expenses 6,472,327 5,771,734 18,326,604 17,158,652 (Loss) Income from
Operations (286,567) 134,592 (131,766) 444,399
Other Income (Expense):
Interest income 6,381 13,586 20,609 46,894
Interest expense,
others (352,931) (303,431) (972,641) (873,377)
Interest expense,
related parties (14,598) (16,023) (43,044) (51,706)
Minority interest in
earnings of
consolidated entities (6,093) (4,548) (35,782) (68,556)
Other expense - (37,014) - (37,014)
(367,241) (347,430) (1,030,858) (983,759) Gain on Acquisition - - 413,954 -
(Loss ) From Continuing
Operations Before
Income Taxes (653,808) (212,838) (748,670) (539,360)
Income Tax Expense (10,641) - (31,925) -
Loss From Continuing
Operations (664,449) (212,838) (780,595) (539,360) Discontinued Operations:
Income from
discontinued
operations - 608,625 - 587,485
Net (Loss) Income $(664,449) $395,787 $(780,595) $48,125 Net (Loss) Income Per
Share, Basic:
Continuing operations $(0.18) $(0.06) $(0.21) $(0.14)
Discontinued operations - 0.16 - 0.16
$(0.18) $0.10 $(0.21) $0.02
Weighted Average
Common Shares
Outstanding,
Basic 3,786,129 3,786,129 3,786,129 3,786,129
Diluted 3,786,129 3,786,129 3,786,129 3,786,129 See notes to consolidated financial statements. 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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