BRENTWOOD, Tenn., Nov. 1, 2017 /PRNewswire/ -- AAC Holdings,
Inc. (NYSE: AAC) announced its results for the third quarter ended
September 30, 2017.
Third Quarter 2017 Operational and Financial
Highlights:
(All comparisons are to the comparable
prior-year period, unless otherwise noted)
- Total revenue increased 14% to $80.4
million
- Average daily residential revenue (ADR) increased 48% to
$925 and average revenue per
outpatient visit (ARV) increased 33% to $437
- Total average daily census increased to 974 compared with
967
- Outpatient visits increased 21% to 18,491
- Net income available to AAC Holdings, Inc. common stockholders
was $0.8 million, or $0.03 per diluted common share, compared with a
net loss available to AAC Holdings, Inc. common stockholders of
$2.5 million, or $(0.11) per diluted common share
- Adjusted EBITDA increased 24% to $14.9
million (see non-GAAP reconciliation herein)
- Adjusted earnings per diluted common share was $0.12 compared with $0.19 per diluted common share (see non-GAAP
reconciliation herein)
- Days sales outstanding decreased by 7 days from the prior
sequential quarter (third quarter of 2017 compared with second
quarter of 2017)
"We believe that our continued focus on delivering exceptional
clinical quality, driving profitable growth and achieving operating
efficiencies resulted in our increased revenue, improved
profitability and enhanced cash flows from operating activities,"
noted Michael Cartwright, Chairman
and Chief Executive Officer of AAC Holdings, Inc. "By completing
the sale-leaseback, increasing the size of our revolver and
securing the necessary financing for the pending AdCare
acquisition, we believe that we have strengthened our balance
sheet, reduced leverage and are well positioned to fund our
continued growth."
Acquisition Activity
On September 13, 2017, the Company
reached a definitive agreement to acquire AdCare, Inc., its
affiliates and associated real estate assets (collectively,
"AdCare") for total consideration of $85.0 million. The
transaction is currently anticipated to close in the first half of
2018 and is subject to regulatory review and customary closing
conditions. The transaction is anticipated to be financed through a
combination of proceeds from the issuance of an
incremental term loan under the Company's senior secured loan
facility, cash on hand, seller financing and $5.0
million of restricted shares of the Company's common
stock.
On October 6, 2017, we secured a
$65.0 million acquisition financing
commitment from Credit Suisse Securities (USA) LLC in conjunction with a senior secured
incremental term loan facility arranged by Credit Suisse Securities
(USA) LLC, Deutsche Bank
Securities, BMO Capital Markets Corp. and Whitney Bank (d/b/a Hancock Bank). Upon
closing, the proceeds from the incremental term loan facility will
be used to fund AAC's proposed acquisition of AdCare, Inc.
Sale-Leaseback
On August 9, 2017, the Company
closed on a sale-leaseback transaction with MedEquities Realty
Operating Partnership, LP, a subsidiary of MedEquities Realty
Trust, Inc., for $25.0 million in
which subsidiaries of the Company sold two outpatient facilities
and two sober living facilities. Simultaneously, the Company,
through its subsidiaries, entered into a 15-year operating lease
with an initial annual rent amount of $2.2
million.
Third Quarter 2017 compared with Third 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.
Total revenue increased 14% to $80.4
million compared with $70.5
million in the same period in the prior year.
Residential treatment facility revenue increased 31% to
$64.2 million compared with
$49.0 million in the same period in
the prior year. Our ADR increased 48% to $925 compared with $624 in the same period in the prior year.
Outpatient and sober living facility revenue increased 62% to
$8.1 million compared with
$5.0 million in the same period in
the prior year. ARV increased 33% to $437 compared with $329 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, with respect to
residential ADR, 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 62% to $5.6 million compared with $14.8 million in the same period in the prior
year. The decrease in client related diagnostic services is a
result of previously anticipated lower reimbursements combined with
a shift in the mix of client related diagnostic services from
higher cost tests to lower cost tests.
Non-client related revenue increased 22% to $2.5 million compared with $2.0 million in the same period in the prior
year.
Operating expenses, as a percentage of total revenues, decreased
by 10% from the prior year. This was primarily the result of a
decrease in salaries, wages and benefits, advertising and
marketing, and professional fees as partially offset by an increase
in the provision for doubtful accounts as a percentage of revenues.
Salaries, wages and benefits, as a percentage of total revenues,
were 46% compared with 52% in the prior year. Advertising and
marketing expense as a percentage of total revenues, was 4%
compared with 7% in the prior year. Professional fees as a
percentage of total revenues, were 5% compared with 8% in the prior
year. The provision for doubtful accounts as a percentage of total
revenues, was 12% compared with 7% in the prior year.
Net income available to AAC Holdings, Inc. common stockholders
was $0.8 million, or $0.03 per diluted common share, compared with net
loss available to AAC Holdings, Inc. common stockholders of
$2.5 million, or $(0.11) per diluted common share, in the
prior-year period.
Adjusted EBITDA increased 24% to $14.9
million compared with $12.1
million for the same period in the prior year. Adjusted net
income available to AAC Holdings, Inc. common stockholders
decreased to $2.7 million, or
$0.12 per diluted common share,
compared with $4.3 million, or
$0.19 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 income (loss) available to
AAC Holdings, Inc. common stockholders, and diluted earnings (loss)
per common share, are included in this release.
De Novo Activity and Bed Expansion Pipeline
At New Orleans East Hospital, 36 beds providing detoxification
and residential treatment services became operational and began
serving clients on October 11,
2017.
As part of our initiative to treat higher acuity clients at our
Laguna Treatment Hospital, effective August
31, 2017, the Company consolidated the operations of our
58-bed Forterus facility in Temecula,
California, with our Laguna facility. All programming,
treatment, detoxification and sober living is now being coordinated
through the Laguna facility.
In addition, we relocated our Recovery First West Palm facility
from West Palm Beach, Florida to
Fort Lauderdale, Florida in
August 2017. By relocating Recovery
First West Palm closer to our Recovery First facility, we expect to
gain additional operational efficiencies. Recovery First West Palm
is now known as Recovery First Fort Lauderdale East.
At Resolutions Arlington, we currently anticipate
increasing available sober living beds from 80 to
155 by mid-year 2018.
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 September 30, 2017, AAC
Holdings' balance sheet reflected cash and cash equivalents of
$16.4 million, net property and
equipment of $151.8 million and total
debt of $202.6 million, net of debt
issuance costs of $7.3 million.
Due to the nature of the sale-leaseback transaction between
MedEquities and the Company, the sale does not qualify for
sale-leaseback accounting under GAAP. Therefore, the sale-leaseback
facilities remain on the Company's balance sheet and continue to be
depreciated over the original life of the asset. The Company
accounted for the $25.0 million of
proceeds, less $0.4 million of
transaction costs, as a financing lease obligation which is
excluded from our debt covenant calculations.
Capital expenditures in the third quarter of 2017 totaled
$8.5 million. Cash flows provided by
operations totaled $5.6 million for
the third quarter of 2017 compared with cash flows used in
operations of $5.0 million in the
prior year period. Days sales outstanding ("DSO") was 106 for the
third quarter of 2017 compared with 113 for the second quarter of
2017 and 105 for the prior-year period. Our DSO continues to be
negatively impacted by increased documentation requests from
commercial payors prior to payment and slower collections related
to laboratory services. However, our cash collections in the third
quarter increased 11% from the second quarter of 2017 and 23% from
the first quarter of 2017 helping to reduce our DSO as of
September 30, 2017. The provision for
doubtful accounts was 12% of total revenues for the third 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
$224 million to $229 million based on
an average daily residential census of 795 to 805 and an ADR of
$800 to $805 (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 $36
million to $38 million
- Non-client related revenue of approximately $9 million to $10 million related to Referral
Solutions Group, our marketing subsidiary, 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
28% to 30% 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, November 2, 2017, at 10:00 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 November 9, 2017, by dialing (412) 317-0088 and
entering the replay access code, 10113678.
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; "AAC Holdings" or the "Company") possible or assumed
future results of operations, including descriptions of AAC
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 projects; (vi) uncertainties
regarding the timing of the closing of acquisitions, including the
AdCare acquisition and the ability to obtain the requisite
financing on the expected terms; (vii) the possibility that a
governmental entity may prohibit, delay or refuse to grant approval
for the consummation of an acquisition, including the AdCare
acquisition; (viii) our failure to achieve anticipated financial
results from contemplated and prior acquisitions; (ix) a disruption
in our ability to perform clinical diagnostic laboratory 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
|
|
Nine Months
Ended
|
|
September 30,
2017
|
|
September 30,
2016
|
|
September 30,
2017
|
|
September 30,
2016
|
Revenues
|
|
|
|
|
|
|
|
Client related
revenue
|
$
77,948
|
|
$
68,491
|
|
$
224,859
|
|
$
199,423
|
Non-client related
revenue
|
2,476
|
|
2,037
|
|
6,646
|
|
7,995
|
Total
revenues
|
80,424
|
|
70,528
|
|
231,505
|
|
207,418
|
|
|
|
|
|
|
|
|
Operating
expenses
|
|
|
|
|
|
|
|
Salaries, wages and
benefits
|
36,709
|
|
36,479
|
|
107,989
|
|
104,641
|
Client related
services
|
6,598
|
|
7,040
|
|
19,622
|
|
17,459
|
Provision for
doubtful accounts
|
9,682
|
|
4,794
|
|
25,765
|
|
15,220
|
Advertising and
marketing
|
3,074
|
|
4,687
|
|
10,115
|
|
13,593
|
Professional
fees
|
3,641
|
|
5,278
|
|
9,322
|
|
13,454
|
Other operating
expenses
|
8,306
|
|
7,757
|
|
25,294
|
|
21,708
|
Rentals and
leases
|
2,105
|
|
2,108
|
|
5,839
|
|
5,532
|
Depreciation and
amortization
|
5,218
|
|
4,629
|
|
15,745
|
|
12,769
|
Acquisition-related
expenses
|
370
|
|
468
|
|
595
|
|
2,428
|
Total operating
expenses
|
75,703
|
|
73,240
|
|
220,286
|
|
206,804
|
Income (loss) from
operations
|
4,721
|
|
(2,712)
|
|
11,219
|
|
614
|
Interest expense,
net
|
5,492
|
|
1,927
|
|
11,072
|
|
5,850
|
Loss on
extinguishment of debt
|
—
|
|
—
|
|
5,435
|
|
—
|
Other expense,
net
|
49
|
|
130
|
|
77
|
|
87
|
Loss before income
tax benefit
|
(820)
|
|
(4,769)
|
|
(5,365)
|
|
(5,323)
|
Income tax
benefit
|
456
|
|
758
|
|
459
|
|
885
|
Net loss
|
(364)
|
|
(4,011)
|
|
(4,906)
|
|
(4,438)
|
Less: net loss
attributable to noncontrolling interest
|
1,126
|
|
1,486
|
|
3,149
|
|
3,371
|
Net income (loss)
available to AAC Holdings, Inc.
common stockholders
|
$
762
|
|
$
(2,525)
|
|
$
(1,757)
|
|
$
(1,067)
|
|
|
|
|
|
|
|
|
Basic (loss) earnings
per common share
|
$
0.03
|
|
$
(0.11)
|
|
$
(0.08)
|
|
$
(0.05)
|
Diluted (loss)
earnings per common share
|
$
0.03
|
|
$
(0.11)
|
|
$
(0.08)
|
|
$
(0.05)
|
Weighted-average
common shares outstanding:
|
|
|
|
|
|
|
|
Basic
|
23,331,414
|
|
22,957,834
|
|
23,246,353
|
|
22,607,194
|
Diluted
|
23,469,985
|
|
22,957,834
|
|
23,246,353
|
|
22,607,194
|
AAC HOLDINGS,
INC.
|
CONDENSED
CONSOLIDATED BALANCE SHEETS
|
Unaudited
|
(Dollars in
thousands)
|
|
|
|
|
|
|
|
|
|
|
|
|
September
30,
|
|
December
31,
|
|
|
2017
|
|
2016
|
Assets
|
|
|
|
|
Current
assets
|
|
|
|
|
Cash and cash
equivalents
|
|
$
16,412
|
|
$
3,964
|
Accounts receivable,
net of allowances
|
|
92,547
|
|
87,334
|
Prepaid expenses and
other current assets
|
|
6,030
|
|
5,181
|
Total current
assets
|
|
114,989
|
|
96,479
|
Property and
equipment, net
|
|
151,769
|
|
141,307
|
Goodwill
|
|
134,396
|
|
134,396
|
Intangible assets,
net
|
|
9,169
|
|
10,356
|
Deferred tax
assets
|
|
1,579
|
|
598
|
Other
assets
|
|
5,664
|
|
748
|
Total
assets
|
|
$
417,566
|
|
$
383,884
|
|
|
|
|
|
Liabilities and
Stockholders' Equity
|
|
|
|
|
Current
liabilities
|
|
|
|
|
Accounts
payable
|
|
$
5,732
|
|
$
9,155
|
Accrued and other
current liabilities
|
|
24,633
|
|
26,742
|
Current portion of
long-term debt
|
|
4,736
|
|
9,445
|
Total current
liabilities
|
|
35,101
|
|
45,342
|
Long-term debt, net
of current portion and debt issuance costs
|
|
197,872
|
|
179,661
|
Financing lease
obligation, net of current portion
|
|
24,398
|
|
—
|
Other long-term
liabilities
|
|
3,836
|
|
4,093
|
Total
liabilities
|
|
261,207
|
|
229,096
|
|
|
|
|
|
Stockholders'
equity
|
|
169,826
|
|
165,106
|
Noncontrolling
interest
|
|
(13,467)
|
|
(10,318)
|
Total stockholders'
equity including noncontrolling interest
|
|
156,359
|
|
154,788
|
Total liabilities
and stockholders' equity
|
|
$
417,566
|
|
$
383,884
|
AAC HOLDINGS,
INC.
|
CONDENSED
CONSOLIDATED STATEMENTS OF CASH FLOWS
|
Unaudited
|
(Dollars in
thousands)
|
|
|
|
|
|
Nine Months
Ended
|
|
September 30,
2017
|
|
September 30,
2016
|
Cash flows from
operating activities:
|
|
|
|
Net loss
|
$
(4,906)
|
|
$
(4,438)
|
Adjustments to
reconcile net loss to net cash provided by operating
activities:
|
|
|
|
Provision for
doubtful accounts
|
25,765
|
|
15,220
|
Depreciation and
amortization
|
15,745
|
|
12,769
|
Equity
compensation
|
6,048
|
|
6,840
|
Loss on disposal of
property and equipment
|
—
|
|
163
|
Loss on
extinguishment of debt
|
5,435
|
|
—
|
Amortization of debt
issuance costs
|
949
|
|
404
|
Deferred income
taxes
|
(981)
|
|
(904)
|
Changes in operating
assets and liabilities:
|
|
|
|
Accounts
receivable
|
(30,978)
|
|
(32,867)
|
Prepaid expenses and
other assets
|
(703)
|
|
1,387
|
Accounts
payable
|
(3,423)
|
|
1,973
|
Accrued
liabilities
|
1,336
|
|
949
|
Other long-term
liabilities
|
(257)
|
|
(180)
|
Net cash provided by
operating activities
|
14,030
|
|
1,316
|
Cash flows from
investing activities:
|
|
|
|
Purchase of property
and equipment
|
(27,186)
|
|
(29,985)
|
Acquisition of
subsidiaries, net of cash acquired
|
—
|
|
(19,150)
|
Net cash used in
investing activities
|
(27,186)
|
|
(49,135)
|
Cash flows from
financing activities:
|
|
|
|
Payments on 2015
Credit Facility and Deerfield Facility, net of
borrowings on 2015 Credit Facility
revolver
|
(193,094)
|
|
44,117
|
Proceeds from 2017
Revolving Facility, net
|
(5,331)
|
|
—
|
Proceeds from 2017
Term Loan, net
|
201,012
|
|
—
|
Proceeds from
financing lease obligation, net
|
24,617
|
|
—
|
Payments on capital
leases
|
(596)
|
|
(577)
|
Payment of employee
taxes for net share settlement
|
(1,004)
|
|
—
|
Repayment of
long-term debt — related party
|
—
|
|
(1,195)
|
Net cash provided by
financing activities
|
25,604
|
|
42,345
|
Net change in cash
and cash equivalents
|
12,448
|
|
(5,474)
|
Cash and cash
equivalents, beginning of period
|
3,964
|
|
18,750
|
Cash and cash
equivalents, end of period
|
$
16,412
|
|
$
13,276
|
AAC HOLDINGS,
INC.
|
OPERATING
METRICS
|
Unaudited
|
|
|
|
|
|
|
|
|
|
Three Months
Ended
|
|
Nine Months
Ended
|
|
September 30,
2017
|
|
September 30,
2016
|
|
September 30,
2017
|
|
September 30,
2016
|
Operating
Metrics:
|
|
|
|
|
|
|
|
New
admissions1
|
3,057
|
|
3,258
|
|
9,281
|
|
8,771
|
Average daily
residential census2
|
755
|
|
853
|
|
787
|
|
813
|
Average daily sober
living census3
|
219
|
|
114
|
|
177
|
|
94
|
Total average daily
census
|
974
|
|
967
|
|
964
|
|
907
|
Average episode
length (days)4
|
28
|
|
27
|
|
28
|
|
28
|
Average daily
residential revenue5
|
$
925
|
|
$
624
|
|
$
817
|
|
$
622
|
Average net daily
residential revenue6
|
$
857
|
|
$
594
|
|
$
749
|
|
$
586
|
Revenue per
admission7
|
$
25,498
|
|
$
21,022
|
|
$
24,228
|
|
$
22,737
|
Outpatient
visits8
|
18,491
|
|
15,299
|
|
50,504
|
|
33,356
|
Average revenue per
outpatient visit9
|
$
437
|
|
$
329
|
|
$
397
|
|
$
329
|
Client related
diagnostic services10
|
7%
|
|
22%
|
|
13%
|
|
25%
|
Residential bed count
at end of period11
|
971
|
|
1,140
|
|
971
|
|
1,140
|
Effective residential
bed count at end of period12
|
949
|
|
1,057
|
|
949
|
|
1,057
|
Average effective
residential bed utilization13
|
75%
|
|
82%
|
|
77%
|
|
83%
|
Days sales
outstanding (DSO)14
|
106
|
|
105
|
|
109
|
|
106
|
|
|
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 Income (Loss) Available to AAC Holdings,
Inc. Common Stockholders
|
|
|
|
|
|
|
|
|
|
|
|
Three Months
Ended
|
|
Nine Months
Ended
|
|
|
September 30,
2017
|
|
September 30,
2016
|
|
September 30,
2017
|
|
September 30,
2016
|
Net income (loss)
available to AAC Holdings, Inc. common stockholders
|
|
$
762
|
|
$
(2,525)
|
|
$
(1,757)
|
|
$
(1,067)
|
Non-GAAP
Adjustments:
|
|
|
|
|
|
|
|
|
Interest
expense
|
|
5,492
|
|
1,927
|
|
11,072
|
|
5,850
|
Depreciation and
amortization
|
|
5,218
|
|
4,629
|
|
15,745
|
|
12,769
|
Income tax
benefit
|
|
(456)
|
|
(758)
|
|
(459)
|
|
(885)
|
Net loss attributable
to noncontrolling interest
|
|
(1,126)
|
|
(1,486)
|
|
(3,149)
|
|
(3,371)
|
Stock-based
compensation and related tax reimbursements
|
|
1,859
|
|
2,064
|
|
6,048
|
|
6,839
|
Litigation settlement
and California matter related expense
|
|
442
|
|
3,961
|
|
1,003
|
|
7,597
|
Acquisition-related
expense
|
|
470
|
|
688
|
|
784
|
|
2,846
|
De novo start-up and
other expense
|
|
584
|
|
3,163
|
|
4,866
|
|
5,268
|
Employee severance
expense
|
|
996
|
|
—
|
|
1,785
|
|
—
|
Loss on
extinguishment of debt
|
|
—
|
|
—
|
|
5,435
|
|
—
|
Facility closure
operating losses and expense
|
|
706
|
|
404
|
|
706
|
|
771
|
Adjusted
EBITDA
|
|
$
14,947
|
|
$
12,067
|
|
$
42,079
|
|
$
36,617
|
|
|
|
|
|
|
|
|
|
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 Income (Loss) Available to AAC Holdings, Inc.
Common
Stockholders
|
|
|
|
|
|
|
|
|
|
|
|
Three Months
Ended
|
|
Nine Months
Ended
|
|
|
September 30,
2017
|
|
September 30,
2016
|
|
September 30,
2017
|
|
September 30,
2016
|
Net income (loss)
available to AAC Holdings, Inc. common stockholders
|
|
$
762
|
|
$
(2,525)
|
|
$
(1,757)
|
|
$
(1,067)
|
Non-GAAP
Adjustments:
|
|
|
|
|
|
|
|
|
Litigation settlement
and California matter related expense
|
|
442
|
|
3,961
|
|
1,003
|
|
7,597
|
Acquisition-related
expense
|
|
470
|
|
688
|
|
784
|
|
2,846
|
De novo start-up and
other expense
|
|
584
|
|
3,163
|
|
4,866
|
|
5,268
|
Employee severance
expense
|
|
996
|
|
—
|
|
1,785
|
|
—
|
Loss on
extinguishment of debt
|
|
—
|
|
—
|
|
5,435
|
|
—
|
Facility closure
operating losses and expense
|
|
706
|
|
404
|
|
706
|
|
771
|
Income tax effect of
non-GAAP adjustments
|
|
(1,248)
|
|
(1,366)
|
|
(1,248)
|
|
(2,613)
|
Adjusted net income
available to AAC Holdings, Inc. common
stockholders
|
|
$
2,712
|
|
$
4,325
|
|
$
11,574
|
|
$
12,802
|
Weighted-average
common shares outstanding - diluted
|
|
23,469,985
|
|
22,957,834
|
|
23,246,353
|
|
22,607,194
|
GAAP diluted earnings
(loss) per common share
|
|
$
0.03
|
|
$
(0.11)
|
|
$
(0.08)
|
|
$
(0.05)
|
Adjusted diluted
earnings per common share
|
|
$
0.12
|
|
$
0.19
|
|
$
0.50
|
|
$
0.57
|
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 income (loss)
available to AAC Holdings, Inc. common stockholders adjusted for
interest expense, depreciation and amortization expense, income tax
(benefit) expense, 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, facility
closure operating losses and expense (associated with The Academy
and FitRx), gain on contingent consideration associated with our
acquisition of Townsend, and
bargain purchase gain associated with our acquisition of Sunrise
House in the fourth quarter of 2015.
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, facility
closure operating losses and expense (associated with The Academy
and FitRx), gain on contingent consideration associated with our
acquisition of Townsend, bargain
purchase gain associated with our acquisition of Sunrise House in
the fourth quarter of 2015, redemption of BHR Series A Preferred
Units, 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.
View original
content:http://www.prnewswire.com/news-releases/aac-holdings-inc-reports-third-quarter-2017-results-300547889.html
SOURCE AAC Holdings, Inc.