BRENTWOOD, Tenn., Aug. 1, 2018 /PRNewswire/ -- AAC Holdings,
Inc. (NYSE: AAC) today announced financial results for the second
quarter ended June 30, 2018 and
reiterates its previously issued full year 2018 guidance.
Second Quarter 2018 Operational and Financial
Highlights:
(All comparisons are to the
comparable prior-year period, unless otherwise noted)
- Total revenue increased 27% to $86.8
million on a comparable accounting basis (increased 11% as
reported)
- Average daily inpatient revenue (ADR) increased 12% to
$841
- Total average daily census (ADC) increased to 1,157 compared
with 961
- Outpatient visits increased 230% to 51,019
- Net loss attributable to AAC Holdings, Inc. common stockholders
was $3.0 million, or $(0.12) per diluted common share
- Adjusted EBITDA increased 2% to $14.8
million (see non-GAAP reconciliation herein)
- Adjusted earnings per diluted common share was $0.09 (see non-GAAP reconciliation herein)
"We are pleased with the
progress we have made this year as we continue to execute to plan
and make strides in transforming our sales and marketing team,
including opening a new admissions center and bringing on new
senior leadership," said Michael
Cartwright, Chairman and Chief Executive Officer of AAC
Holdings, Inc. "Operations during the quarter remained very strong
with the integration of AdCare going well and the
continued improvements
in cash collections. We
remain focused on our sales and marketing efforts and feel
confident we will meet our annual guidance with continued momentum
entering into 2019."
Adoption of New Revenue Recognition Standard
In May 2014, the FASB issued
Accounting Standards Codification Topic 606, "Revenue from
Contracts with Customers" (ASC Topic 606), a replacement of Revenue
Recognition ASC Topic 605. The Company adopted ASC Topic 606 on
January 1, 2018 using the modified
retrospective approach. Under ASC Topic 606, the provision for
doubtful accounts, which historically was reported as an operating
expense, is now reported as a direct reduction to
revenue effective January 1,
2018. This change in presentation reduced revenues and
operating expenses by the same amount and did not have an effect on
net income or earnings per share. As the Company adopted ASC
Topic 606 using the modified retrospective approach, prior year
periods were not recast and as such, revenues as reported for those
periods are not comparable to the current year presentation. For
purposes of this release, we have applied our adoption of ASC Topic
606 to the prior year period. We believe this allows for an
accurate comparison of prior period revenue. Where we have used
language such as "less the provision for doubtful accounts," this
indicates a comparison of periods that reflects our adoption of ASC
Topic 606.
AdCare Acquisition
On March 1, 2018, AAC acquired
AdCare, Inc. and its subsidiaries ("AdCare"). AdCare offers
treatment for drug and alcohol addiction and includes, among other
things, a 114-bed hospital and 5 outpatient centers in
Massachusetts, as well as
a 59-bed residential inpatient treatment center and 2
outpatient centers in Rhode
Island. AdCare was purchased for total consideration of
$85.0 million, subject to
adjustments.
Second Quarter 2018 Financial Results
AAC breaks down its revenues between client related revenue and
non-client related revenue. Client related revenue includes: (1)
inpatient 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 as well as addiction services provided to individuals
in the criminal justice system.
Total revenue on a comparable accounting basis (i.e., less the
provision for doubtful accounts) increased 27% to $86.8 million compared with $68.5 million in the same period in the prior
year. Total revenue as reported increased 11%.
Inpatient treatment facility revenue, on a comparable accounting
basis, increased 21% to $66.7 million
compared with $55.1 million in the
same period in the prior year. ADR
increased 12% to $841 compared with
$752 in the same period in the prior
year.
Outpatient and sober living facility revenue, on a comparable
accounting basis, increased 60% to $9.0
million compared with $5.6
million in the same period in the prior year. Average
revenue per outpatient visit (ARV) decreased 56% to $177 compared with $403 in the same period in the prior year.
Client related diagnostic services revenue, on a comparable
accounting basis, increased 39% to $7.5
million compared with $5.4
million in the same period in the prior year.
Non-client related revenue, on a comparable accounting basis,
increased 48% to $3.5 million
compared with $2.4 million in the
same period in the prior year.
Net loss attributable to AAC Holdings, Inc. common stockholders
was $3.0 million, or $(0.12) per diluted common share, compared with
$1.9 million, or $(0.08) per diluted common share, in the
prior-year period.
Adjusted EBITDA increased 2% to $14.8
million compared with $14.5
million for the same period in the prior year. Adjusted net
income attributable to AAC Holdings, Inc. common stockholders
decreased to $2.2 million, or
$0.09 per diluted common share,
compared with $6.1 million, or
$0.26 per diluted common share, for
the same period in the prior year. Adjusted EBITDA, adjusted net
income attributable to AAC Holdings, Inc. common stockholders and
adjusted earnings per diluted common share are non-GAAP financial
measures. Tables reconciling these non-GAAP measures to the most
directly comparable GAAP measures are included at the end of this
release.
Balance Sheet and Cash Flows
As of June 30, 2018, AAC Holdings'
balance sheet reflected cash and cash equivalents of $11.4 million, net property and equipment of
$168.4 million and total debt of
$302.0 million, net of debt issuance
costs of $9.4 million.
Cash flows provided by operations totaled $3.3 million and maintenance capital expenditures
totaled $1.1 million for the second
quarter of 2018.
2018 Outlook
AAC maintains its previously issued guidance as follows:
|
|
Full Year 2018
Guidance
|
|
|
(in millions,
except per share data)
|
Total
Revenues
|
|
$325 -
$340
|
Inpatient treatment
facility revenue
|
|
$262 -
$266
|
Outpatient and
sober living facility revenue
|
|
$40 -
$46
|
Client related
diagnostic services revenue
|
|
$12 -
$15
|
Non-client related
revenue
|
|
$11 -
$13
|
|
|
|
Adjusted
EBITDA
|
|
$68 - $72
|
Adjusted Earnings per
Diluted Common Share
|
|
$0.75 -
$0.80
|
The Company now expects an annual effective tax rate of 20% to
22%, down from 24% to 26%, and diluted weighted-average common
shares outstanding of approximately 24.5 million for the year.
This outlook above does not include the impact of any future
acquisitions, transaction-related costs, litigation settlement or
expenses related to legal defenses.
With respect to the "2018 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 future GAAP financial results.
Earnings Conference Call
The Company will host a conference call and live audio webcast
on Thursday, August 2, 2018, at 10:00 a.m. CT to
further discuss these results. The number to call for this
interactive teleconference is 412-542-4144. A replay of the
conference call will be available through August 9, 2018, by
dialing 412-317-0088 and entering the replay access code, 10122876.
The live audio webcast of the Company's quarterly
conference call will also be available online in the Investor
Relations section of the Company's website
at ir.americanaddictioncenters.org.
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; "AAC Holdings" or the "Company") possible or assumed
future results of operations, including descriptions of the
Company's revenue, 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 effectively
operate our facilities; (ii) our
reliance on our sales and marketing program to continuously attract
and enroll clients; (iii) a reduction in reimbursement rates
(or failure to pay) by certain
third-party payors for inpatient and outpatient services
and point-of-care and definitive lab
testing; (iv) our failure to successfully achieve growth
through acquisitions and de novo projects; (v) the possibility that a governmental entity may
prohibit, delay or refuse to grant approval for the consummation of
an acquisition; (vi) our failure to achieve anticipated
financial results from contemplated and prior acquisitions;
(vii) a disruption in our ability to perform
diagnostic laboratory services; (viii) maintaining
compliance with applicable regulatory authorities, licensure and
permits to operate our facilities and laboratories; (ix) a disruption in our business and
reputational and economic risks associated with civil claims by various parties; (x) inability to meet the covenants in
our loan documents or lack of borrowing
capacity; (xi) our inability to effectively integrate
acquired facilities; and (xii)
general economic conditions, as well as other risks discussed in
the "Risk Factors" section of the Company's Annual Report on Form
10-K for the year ended December 31, 2017, the Company's Quarterly Report on Form 10-Q for
the period ended March 31,
2018, 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 data)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months
Ended
|
|
|
Six Months
Ended
|
|
|
June 30,
2018
|
|
|
June 30,
2017
|
|
|
June 30,
2018
|
|
|
June 30,
2017
|
|
Revenues
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Client related
revenue
|
$
|
83,293
|
|
|
$
|
75,692
|
|
|
$
|
159,216
|
|
|
$
|
146,911
|
|
Non-client related
revenue
|
|
3,468
|
|
|
|
2,350
|
|
|
|
6,018
|
|
|
|
4,170
|
|
Total
revenues
|
|
86,761
|
|
|
|
78,042
|
|
|
|
165,234
|
|
|
|
151,081
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating
expenses
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Salaries, wages and
benefits
|
|
46,850
|
|
|
|
34,508
|
|
|
|
86,934
|
|
|
|
71,280
|
|
Client related
services
|
|
8,393
|
|
|
|
6,646
|
|
|
|
16,140
|
|
|
|
13,024
|
|
Provision for doubtful
accounts
|
|
366
|
|
|
|
9,496
|
|
|
|
366
|
|
|
|
16,083
|
|
Advertising and
marketing
|
|
2,584
|
|
|
|
3,266
|
|
|
|
5,183
|
|
|
|
7,041
|
|
Professional
fees
|
|
4,950
|
|
|
|
3,039
|
|
|
|
8,600
|
|
|
|
5,681
|
|
Other operating
expenses
|
|
12,194
|
|
|
|
8,199
|
|
|
|
22,782
|
|
|
|
16,988
|
|
Rentals and
leases
|
|
2,563
|
|
|
|
1,849
|
|
|
|
4,679
|
|
|
|
3,734
|
|
Litigation
settlement
|
|
244
|
|
|
|
—
|
|
|
|
3,035
|
|
|
|
—
|
|
Depreciation and
amortization
|
|
5,909
|
|
|
|
5,058
|
|
|
|
11,373
|
|
|
|
10,527
|
|
Acquisition-related
expenses
|
|
—
|
|
|
|
42
|
|
|
|
305
|
|
|
|
225
|
|
Total operating
expenses
|
|
84,053
|
|
|
|
72,103
|
|
|
|
159,397
|
|
|
|
144,583
|
|
Income from
operations
|
|
2,708
|
|
|
|
5,939
|
|
|
|
5,837
|
|
|
|
6,498
|
|
Interest expense,
net
|
|
7,893
|
|
|
|
2,846
|
|
|
|
14,602
|
|
|
|
5,580
|
|
Loss on
extinguishment of debt
|
|
—
|
|
|
|
5,435
|
|
|
|
—
|
|
|
|
5,435
|
|
Other (income)
expense, net
|
|
(98)
|
|
|
|
(6)
|
|
|
|
(89)
|
|
|
|
28
|
|
Loss before income
tax (benefit) expense
|
|
(5,087)
|
|
|
|
(2,336)
|
|
|
|
(8,676)
|
|
|
|
(4,545)
|
|
Income tax (benefit)
expense
|
|
(84)
|
|
|
|
562
|
|
|
|
(1,578)
|
|
|
|
(3)
|
|
Net loss
|
|
(5,003)
|
|
|
|
(2,898)
|
|
|
|
(7,098)
|
|
|
|
(4,542)
|
|
Less: net loss
attributable to noncontrolling
interest
|
|
1,990
|
|
|
|
982
|
|
|
|
3,883
|
|
|
|
2,023
|
|
Net loss attributable
to AAC Holdings, Inc.
common
stockholders
|
$
|
(3,013)
|
|
|
$
|
(1,916)
|
|
|
$
|
(3,215)
|
|
|
$
|
(2,519)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic loss per common
share
|
$
|
(0.12)
|
|
|
$
|
(0.08)
|
|
|
$
|
(0.13)
|
|
|
$
|
(0.11)
|
|
Diluted loss per
common share
|
$
|
(0.12)
|
|
|
$
|
(0.08)
|
|
|
$
|
(0.13)
|
|
|
$
|
(0.11)
|
|
Weighted-average
common shares outstanding:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic
|
|
24,166,976
|
|
|
|
23,242,177
|
|
|
|
23,956,760
|
|
|
|
23,203,081
|
|
Diluted
|
|
24,166,976
|
|
|
|
23,242,177
|
|
|
|
23,956,760
|
|
|
|
23,203,081
|
|
AAC HOLDINGS,
INC.
|
|
CONDENSED
CONSOLIDATED BALANCE SHEETS
|
|
Unaudited
|
|
(Dollars in
thousands)
|
|
|
|
|
|
|
|
|
|
|
|
|
June
30
|
|
|
December
31,
|
|
|
|
2018
|
|
|
2017
|
|
Assets
|
|
|
|
|
|
|
|
|
Current
assets
|
|
|
|
|
|
|
|
|
Cash and cash
equivalents
|
|
$
|
11,353
|
|
|
$
|
13,818
|
|
Accounts receivable,
net of allowances
|
|
|
97,362
|
|
|
|
94,096
|
|
Prepaid expenses and
other current assets
|
|
|
4,638
|
|
|
|
4,022
|
|
Total current
assets
|
|
|
113,353
|
|
|
|
111,936
|
|
Property and
equipment, net
|
|
|
168,373
|
|
|
|
152,548
|
|
Goodwill
|
|
|
197,184
|
|
|
|
134,396
|
|
Intangible assets,
net
|
|
|
13,201
|
|
|
|
8,829
|
|
Deferred tax assets,
net
|
|
|
9,572
|
|
|
|
8,010
|
|
Other
assets
|
|
|
11,069
|
|
|
|
12,556
|
|
Total
assets
|
|
$
|
512,752
|
|
|
$
|
428,275
|
|
|
|
|
|
|
|
|
|
|
Liabilities and
Stockholders' Equity
|
|
|
|
|
|
|
|
|
Current
liabilities
|
|
|
|
|
|
|
|
|
Accounts
payable
|
|
$
|
6,613
|
|
|
$
|
4,579
|
|
Accrued and other
current liabilities
|
|
|
30,487
|
|
|
|
27,661
|
|
Accrued
litigation
|
|
|
—
|
|
|
|
23,607
|
|
Current portion of
long-term debt
|
|
|
6,723
|
|
|
|
4,722
|
|
Total current
liabilities
|
|
|
43,823
|
|
|
|
60,569
|
|
Long-term debt, net
of current portion and debt issuance costs
|
|
|
295,322
|
|
|
|
196,451
|
|
Financing lease
obligation, net of current portion
|
|
|
24,488
|
|
|
|
24,541
|
|
Other long-term
liabilities
|
|
|
12,322
|
|
|
|
10,546
|
|
Total
liabilities
|
|
|
375,955
|
|
|
|
292,107
|
|
|
|
|
|
|
|
|
|
|
Stockholders'
equity
|
|
|
155,506
|
|
|
|
150,994
|
|
Noncontrolling
interest
|
|
|
(18,709)
|
|
|
|
(14,826)
|
|
Total stockholders'
equity including noncontrolling interest
|
|
|
136,797
|
|
|
|
136,168
|
|
Total liabilities
and stockholders' equity
|
|
$
|
512,752
|
|
|
$
|
428,275
|
|
AAC HOLDINGS,
INC.
|
|
CONDENSED
CONSOLIDATED STATEMENTS OF CASH FLOWS
|
|
Unaudited
|
|
(Dollars in
thousands)
|
|
|
|
|
|
|
|
|
|
|
Six Months
Ended
|
|
|
June 30,
2018
|
|
|
June 30,
2017
|
|
Cash flows (used
in) provided by operating activities:
|
|
|
|
|
|
|
|
Net loss
|
$
|
(7,098)
|
|
|
$
|
(4,542)
|
|
Adjustments to
reconcile net loss to net cash (used in) provided by
operating activities:
|
|
|
|
|
|
|
|
Provision for doubtful
accounts
|
|
366
|
|
|
|
16,083
|
|
Depreciation and
amortization
|
|
11,373
|
|
|
|
10,527
|
|
Equity
compensation
|
|
2,159
|
|
|
|
4,189
|
|
Loss on extinguishment
of debt
|
|
—
|
|
|
|
5,435
|
|
Loss on disposal of
property and equipment
|
|
34
|
|
|
|
—
|
|
Amortization of debt
issuance costs
|
|
1,357
|
|
|
|
364
|
|
Deferred income
taxes
|
|
(1,562)
|
|
|
|
(582)
|
|
Changes in operating
assets and liabilities:
|
|
|
|
|
|
|
|
Accounts
receivable
|
|
724
|
|
|
|
(25,276)
|
|
Prepaid expenses and
other assets
|
|
1,475
|
|
|
|
690
|
|
Accounts
payable
|
|
(1,464)
|
|
|
|
1,286
|
|
Accrued and other
current liabilities
|
|
457
|
|
|
|
932
|
|
Accrued
litigation
|
|
(23,300)
|
|
|
|
(406)
|
|
Other long-term
liabilities
|
|
(230)
|
|
|
|
(311)
|
|
Net cash (used in)
provided by operating activities
|
|
(15,709)
|
|
|
|
8,389
|
|
Cash flows used in
investing activities:
|
|
|
|
|
|
|
|
Purchase of property
and equipment
|
|
(11,196)
|
|
|
|
(18,665)
|
|
Acquisition of
subsidiaries
|
|
(65,185)
|
|
|
|
—
|
|
Net cash used in
investing activities
|
|
(76,381)
|
|
|
|
(18,665)
|
|
Cash flows
provided by financing activities:
|
|
|
|
|
|
|
|
Payments on 2015
Credit Facility and Deerfield Facility
|
|
—
|
|
|
|
(204,773)
|
|
Proceeds from 2015
Credit Facility and Deerfield Facility,
net of deferred financing
costs
|
|
—
|
|
|
|
11,679
|
|
Payments on 2017
Credit Facility
|
|
(3,448)
|
|
|
|
—
|
|
Proceeds from 2017
Credit Facility, net of deferred financing costs
|
|
94,286
|
|
|
|
211,494
|
|
Payments on capital
leases and other
|
|
(440)
|
|
|
|
(400)
|
|
Payments on AdCare
Note
|
|
(250)
|
|
|
|
—
|
|
Payment of employee
taxes for net share settlement
|
|
(523)
|
|
|
|
(895)
|
|
Net cash provided by
financing activities
|
|
89,625
|
|
|
|
17,105
|
|
Net change in cash
and cash equivalents
|
|
(2,465)
|
|
|
|
6,829
|
|
Cash and cash
equivalents, beginning of period
|
|
13,818
|
|
|
|
3,964
|
|
Cash and cash
equivalents, end of period
|
$
|
11,353
|
|
|
$
|
10,793
|
|
AAC HOLDINGS,
INC.
|
|
OPERATING
METRICS
|
|
Unaudited
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months
Ended
|
|
|
Six Months
Ended
|
|
|
June 30,
2018
|
|
|
June 30,
2017
|
|
|
June 30,
2018
|
|
|
June 30,
2017
|
|
Operating
Metrics:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
New
admissions1
|
|
5,242
|
|
|
|
3,008
|
|
|
|
8,981
|
|
|
|
6,224
|
|
Average daily
inpatient census2
|
|
872
|
|
|
|
805
|
|
|
|
823
|
|
|
|
804
|
|
Average daily sober
living census3
|
|
285
|
|
|
|
156
|
|
|
|
270
|
|
|
|
155
|
|
Total average daily
census
|
|
1,157
|
|
|
|
961
|
|
|
|
1,093
|
|
|
|
959
|
|
Average episode
length (days)4
|
|
21
|
|
|
|
28
|
|
|
|
23
|
|
|
|
28
|
|
Average daily
inpatient revenue5
|
$
|
841
|
|
|
$
|
752
|
|
|
$
|
884
|
|
|
$
|
696
|
|
Revenue per
admission6
|
$
|
15,890
|
|
|
$
|
25,164
|
|
|
$
|
17,728
|
|
|
$
|
23,604
|
|
Outpatient
visits7
|
|
51,019
|
|
|
|
15,463
|
|
|
|
81,332
|
|
|
|
32,013
|
|
Revenue per
outpatient visit8
|
$
|
177
|
|
|
$
|
403
|
|
|
$
|
214
|
|
|
$
|
373
|
|
Client related
diagnostic services9
|
|
9
|
%
|
|
|
10
|
%
|
|
|
6
|
%
|
|
|
16
|
%
|
Inpatient bed count
at end of period10
|
|
1,112
|
|
|
|
1,100
|
|
|
|
1,112
|
|
|
|
1,100
|
|
Effective inpatient
bed count at end of
period11
|
|
1,108
|
|
|
|
957
|
|
|
|
1,108
|
|
|
|
957
|
|
Average effective
inpatient bed utilization12
|
|
79
|
%
|
|
|
80
|
%
|
|
|
78
|
%
|
|
|
78
|
%
|
|
1
Represents total client admissions at our inpatient facilities for
the periods presented.
|
2
Represents average daily client census at all of our inpatient
facilities.
|
3
Represents average daily client census at our sober living
facilities.
|
4
Average episode length is the consecutive number of days from
admission to discharge that a client stays at an AAC
inpatient facility and, when applicable, an AAC sober
living facility.
|
5
Average daily inpatient revenue is calculated as total revenues
from all of our inpatient facilities less provision for doubtful
accounts during the period, divided by the product of the number of
days in the period multiplied by average daily inpatient
census.
|
6
Revenue per admission is calculated by dividing total client
related revenue, after the provision for doubtful accounts, by new
admissions.
|
7
Represents the total number of outpatient visits at our standalone
outpatient centers during the periods presented.
|
8
Revenue per outpatient visit is calculated as total revenues from
all of our standalone outpatient facilities, after the provision
for doubtful accounts, divided by the number of outpatient visits
during the period.
|
9
Client related diagnostic services revenue, as a percentage of
client related revenue, includes point-of-care and client related
diagnostic laboratory services.
|
10
Inpatient bed count at end of period includes all beds at inpatient
facilities.
|
11
Effective bed count at end of period represents the number of beds
for which our facilities are staffed based on planned
census.
|
12
Average effective inpatient bed utilization represents average
daily inpatient census divided by the average effective inpatient
bed count during the applicable period.
|
AAC HOLDINGS,
INC.
|
|
SUPPLEMENTAL
RECONCILIATION OF NON-GAAP DISCLOSURES
|
|
Unaudited
|
|
(Dollars in
thousands)
|
|
Reconciliation of
Adjusted EBITDA to Net Loss Attributable to AAC Holdings, Inc.
Common Stockholders
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months
Ended
|
|
|
Six Months
Ended
|
|
|
|
June 30,
2018
|
|
|
June 30,
2017
|
|
|
June 30,
2018
|
|
|
June 30,
2017
|
|
Net loss attributable
to AAC Holdings, Inc.
common stockholders
|
|
$
|
(3,013)
|
|
|
$
|
(1,916)
|
|
|
$
|
(3,215)
|
|
|
$
|
(2,519)
|
|
Non-GAAP
Adjustments:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest
expense
|
|
|
7,893
|
|
|
|
2,846
|
|
|
|
14,602
|
|
|
|
5,580
|
|
Depreciation and
amortization
|
|
|
5,909
|
|
|
|
5,058
|
|
|
|
11,373
|
|
|
|
10,527
|
|
Income tax
benefit
|
|
|
(84)
|
|
|
|
562
|
|
|
|
(1,578)
|
|
|
|
(3)
|
|
Net loss attributable
to noncontrolling
interest
|
|
|
(1,990)
|
|
|
|
(982)
|
|
|
|
(3,883)
|
|
|
|
(2,023)
|
|
Stock-based
compensation and related tax
reimbursements
|
|
|
1,361
|
|
|
|
2,052
|
|
|
|
2,159
|
|
|
|
4,189
|
|
Litigation settlement
and California matter
related expense
|
|
|
1,201
|
|
|
|
402
|
|
|
|
4,403
|
|
|
|
561
|
|
Acquisition-related
expense
|
|
|
24
|
|
|
|
42
|
|
|
|
453
|
|
|
|
314
|
|
De novo start-up and
other expense
|
|
|
382
|
|
|
|
928
|
|
|
|
640
|
|
|
|
4,282
|
|
Recruitment and
retention expense
|
|
|
715
|
|
|
|
—
|
|
|
|
885
|
|
|
|
—
|
|
Employee severance
expense
|
|
|
384
|
|
|
|
46
|
|
|
|
1,295
|
|
|
|
789
|
|
Loss on extinguishment
of debt
|
|
|
—
|
|
|
|
5,435
|
|
|
|
—
|
|
|
|
5,435
|
|
Facility closure
operating losses and expense
|
|
|
1,993
|
|
|
|
—
|
|
|
|
2,785
|
|
|
|
—
|
|
Adjusted
EBITDA
|
|
$
|
14,775
|
|
|
$
|
14,473
|
|
|
$
|
29,919
|
|
|
$
|
27,132
|
|
Adjusted EBITDA, adjusted net income attributable 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 income (loss)
attributable 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,
recruitment and retention expense, employee severance expense and
facility closure operating losses and expense.
AAC HOLDINGS,
INC.
|
|
SUPPLEMENTAL
RECONCILIATION OF NON-GAAP DISCLOSURES
|
|
Unaudited
|
|
(Dollars in
thousands, except per share data)
|
|
Reconciliation of
Adjusted Net Income Attributable to AAC Holdings, Inc. Common
Stockholders to Net Loss Attributable to AAC Holdings, Inc. Common
Stockholders
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months
Ended
|
|
|
Six Months
Ended
|
|
|
|
June 30,
2018
|
|
|
June 30,
2017
|
|
|
June 30,
2018
|
|
|
June 30,
2017
|
|
Net loss attributable
to AAC Holdings, Inc.
common stockholders
|
|
$
|
(3,013)
|
|
|
$
|
(1,916)
|
|
|
$
|
(3,215)
|
|
|
$
|
(2,519)
|
|
Non-GAAP
Adjustments:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Litigation settlement
and California matter
related expense
|
|
|
1,201
|
|
|
|
402
|
|
|
|
4,403
|
|
|
|
561
|
|
Acquisition-related
expense
|
|
|
24
|
|
|
|
42
|
|
|
|
453
|
|
|
|
314
|
|
De novo start-up and
other expense
|
|
|
382
|
|
|
|
928
|
|
|
|
640
|
|
|
|
4,282
|
|
Recruitment and
retention expense
|
|
|
715
|
|
|
|
—
|
|
|
|
885
|
|
|
|
—
|
|
Employee severance
expense
|
|
|
384
|
|
|
|
46
|
|
|
|
1,295
|
|
|
|
789
|
|
Loss on extinguishment
of debt
|
|
|
—
|
|
|
|
5,435
|
|
|
|
—
|
|
|
|
5,435
|
|
Facility closure
operating losses and expense
|
|
|
1,993
|
|
|
|
—
|
|
|
|
2,785
|
|
|
|
—
|
|
Income tax effect of
non-GAAP adjustments
|
|
|
496
|
|
|
|
1,158
|
|
|
|
(1,903)
|
|
|
|
—
|
|
Adjusted net income
attributable to AAC
Holdings, Inc. common stockholders
|
|
$
|
2,182
|
|
|
$
|
6,095
|
|
|
$
|
5,343
|
|
|
$
|
8,862
|
|
Weighted-average
common shares outstanding -
diluted
|
|
|
24,166,976
|
|
|
|
23,242,177
|
|
|
|
23,956,760
|
|
|
|
23,203,081
|
|
GAAP diluted loss per
common share
|
|
$
|
(0.12)
|
|
|
$
|
(0.08)
|
|
|
$
|
(0.13)
|
|
|
$
|
(0.11)
|
|
Adjusted earnings per
diluted common share
|
|
$
|
0.09
|
|
|
$
|
0.26
|
|
|
$
|
0.22
|
|
|
$
|
0.38
|
|
Management defines adjusted net income attributable to AAC
Holdings, Inc. common stockholders as net income (loss)
attributable 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, recruitment and retention
expense, employee severance expense, 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
attributable to AAC Holdings, Inc. common stockholders as opposed
to net income attributable to AAC Holdings, Inc. common
stockholders.
View original
content:http://www.prnewswire.com/news-releases/aac-holdings-inc-reports-second-quarter-2018-results-300690576.html
SOURCE AAC Holdings, Inc.