ATLANTA, Jan. 4, 2016 /PRNewswire/ -- AdCare Health
Systems, Inc. (NYSE MKT: ADK) (NYSE MKT: ADK.PRA), a
self-managed healthcare real estate investment company that invests
primarily in real estate purposed for senior living and long-term
healthcare, today announced that the operations of two facilities
in Oklahoma have been transitioned
to a third party operator on December 31,
2015. As a result, operations for all 38 AdCare facilities
have transferred to third-party operators or are under management
contracts with an indefinite term.
"This milestone means AdCare leaves 2015 with its transition to
a healthcare property holding and leasing company complete,"
commented Bill McBride, AdCare's
Chairman and Chief Executive Officer. "In addition, the
non-operational issues related to the purported class action
lawsuit in Arkansas and those
related to a former director are also resolved. We enter 2016
increasingly focused on increasing shareholder value through
improvements in our real estate portfolio and near-term investments
that will maximize shareholder value."
The Board of Directors decided not to declare a cash dividend on
its common stock for the fourth quarter of 2015. The Board will
continue to evaluate the company's dividend policy throughout 2016.
The Board believes that it is prudent and appropriate to retain
capital to focus on specific areas of long-term value creation and
near-term investments to maximize shareholder value. The company
anticipates the need to make certain capital and other expenditures
in 2016 in its existing leased facilities in order to maximize
rental revenues and keep the facilities competitive in their
respective markets. In addition, management and the Board
anticipate having better clarity in several areas that may impact
AdCare's financial position by the end of the first quarter,
including professional liability costs and the timing of the
collection of patient accounts receivable. While each of the above
issues and other issues are not individually significant, the
possible aggregate effects of such issues impacted the Board's
decision to suspend the company's cash dividend on the common
stock.
"With all operations transfers now complete, and the associated,
remaining tasks scheduled to be completed in the next few months,
we are reaffirming our guidance of post-transition Adjusted FFO of
between $0.25 and $0.30 per share,"
commented Allan Rimland, AdCare's
President and Chief Financial Officer.
(See "Use of Non-GAAP Financial Information" below for the
definition of FFO and Adjusted FFO, both non-GAAP financial
measures, as well as an important discussion about the use of these
measures and their reconciliation to GAAP net loss, the most
directly comparable GAAP financial measure).
"Our plan is to continue to return capital to shareholders
through a sustainable quarterly dividend to common stock holders at
an appropriate time," added Mr. McBride. "The fundamentals of our
business have not changed and our overall positioning has improved
as we put legacy issues behind us. Our business remains on track
and we look forward to resuming a cash dividend on our common stock
as soon as possible."
Conference Call and Webcast
AdCare will hold a conference call tomorrow, Tuesday, January 5, 2016 at 10 a.m. ET.
- Dial-in number: 1-888-455-2263 (domestic) or 1-719-325-2144
(international)
- Replay number: Dial 1-877-870-5176 (domestic) or 1-858-384-5517
(international). Please use passcode 858054 to access the replay.
The replay will be available until January
12, 2016.
- Webcast link: http://public.viavid.com/index.php?id=117690
About AdCare Health Systems
AdCare Health Systems, Inc. (NYSE MKT: ADK) (NYSE MKT: ADK.PRA)
is a self-managed healthcare real estate investment company that
invests primarily in real estate purposed for senior living and
long-term healthcare through facility lease and sub-lease
transactions. The Company currently owns, leases or manages for
third parties 38 facilities. For more information about AdCare,
visit www.adcarehealth.com.
Important Cautions Regarding Forward-Looking
Statements
Statements contained in this press release that are not
historical facts may be forward-looking statements within the
meaning of federal law. Such statements can be identified by the
use of forward-looking terminology, such as "believes," "expects,"
"plans," "intends," "anticipates" and variations of such words or
similar expressions, but their absence does not mean that the
statement is not forward-looking. Such forward-looking statements
reflect management's beliefs and assumptions and are based upon
information currently available to management and involve known and
unknown risks, results, performance or achievements of AdCare,
which may differ materially from those expressed or implied in such
statements. Such factors are identified in the public filings made
by AdCare with the Securities and Exchange Commission, including
AdCare's Annual Report on Form 10-K for the year ended December 31, 2014. There is no assurance that
such factors or other factors will not affect the accuracy of such
forward-looking statements. Except where required by law, AdCare
undertakes no obligation to revise or update any forward-looking
statements to reflect events or circumstances after the date of
this press release.
Use of Non-GAAP Financial Information
For purposes of the Securities and Exchange Commission's
regulations, a non-GAAP financial measure is a numerical measure of
a company's historical or future financial performance, financial
position or cash flows that excludes amounts, or is subject to
adjustments that have the effect of excluding amounts, that are
included in the most directly comparable financial measure
calculated and presented in accordance with U.S. generally accepted
accounting principles ("GAAP") in the statement of operations,
balance sheet or statement of cash flows (or equivalent statements)
of the company, or includes amounts, or is subject to adjustments
that have the effect of including amounts, that are excluded from
the most directly comparable financial measure so calculated and
presented.
Funds from Operations ("FFO") and Adjusted Funds from Operations
("Adjusted FFO") are measures of operating performance that are not
calculated in accordance with GAAP. The company calculates and
reports FFO in accordance with the definition and interpretive
guidelines issued by the National Association of Real Estate
Investment Trusts ("NAREIT"), and consequently, FFO is defined as
net income (loss) from continuing operations attributed to common
stockholders, adjusted for the effects of asset dispositions and
certain non-cash items, primarily depreciation and amortization and
impairments on real estate assets. Adjusted FFO is calculated as
FFO adjusted for the impact of non-cash stock-based compensation
and other non-routine adjustments. The company believes FFO and
Adjusted FFO provide enhanced measures of the operating performance
of the Company's core portfolio. The Company's computation of
Adjusted FFO is not comparable to the NAREIT definition of FFO or
to similar measures reported by many REITs, but the company
believes that is appropriate measure for this company.
The company believes that FFO and Adjusted FFO are important
supplemental measures of its operating performance. Because the
historical cost accounting convention used for real estate assets
requires depreciation (except on land), such accounting
presentation implies that the value of real estate assets
diminishes predictably over time, while real estate values instead
have historically risen or fallen with market conditions. The term
FFO was designed by the real estate industry to address this issue.
FFO described herein is not necessarily comparable to FFO of real
estate investment trusts that do not use the same definition or
implementation guidelines or interpret the standards differently
from the company.
The company uses FFO and Adjusted FFO among the criteria to
measure the operating performance of its business. The company
further believes that by excluding the effect of depreciation,
amortization, impairments on real estate assets and gains or losses
from sales of real estate, all of which are based on historical
costs and which may be of limited relevance in evaluating current
performance, FFO and Adjusted FFO can facilitate comparisons of
operating performance between periods and between the company and
many REITs. The company offers these measures to assist the users
of its financial statements in analyzing its operating performance
and not as measures of liquidity or cash flow. FFO and Adjusted FFO
are not measures of financial performance under GAAP and should not
be considered as measures of liquidity, alternatives to net income
or indicators of any other performance measure determined in
accordance with GAAP. Investors and potential investors in the
company's securities should not rely on this measure as a
substitute for any GAAP measure, including net income.
ADCARE HEALTH
SYSTEMS, INC. AND SUBSIDIARIES
RECONCILIATION OF NET
LOSS TO FFO AND ADJUSTED FFO
(Amounts in
000's)
(Unaudited)
|
|
|
|
Range of Financial
Guidance Upon Completion of Transition
|
(Amounts in 000's)
|
|
Twelve Month
Period
|
Condensed
consolidated statements of operations data:
|
|
|
|
|
Net loss
|
|
$
|
(2,800)
|
|
$
|
(1,700)
|
Discontinued
operations
|
|
-
|
|
-
|
Net loss from
continuing operations (Per GAAP)
|
|
(2,800)
|
|
(1,700)
|
Depreciation and
amortization
|
|
6,500
|
|
6,500
|
Funds from operations
(FFO)
|
|
$
|
3,700
|
|
$
|
4,800
|
Amortization of stock
based compensation
|
|
1,250
|
|
1,250
|
Adjusted
FFO
|
|
$
|
4,950
|
|
$
|
6,050
|
|
|
|
|
|
Assumed shares of
common stock outstanding
|
|
19,900
|
|
19,900
|
Adjusted FFO per
share
|
|
$
|
0.25
|
|
$
|
0.30
|
|
|
|
|
|
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visit:http://www.prnewswire.com/news-releases/adcare-completes-operations-transfers-of-its-two-remaining-oklahoma-facilities-suspends-cash-dividend-on-common-stock-300198721.html
SOURCE AdCare Health Systems, Inc.