AdCare Health Systems (ADK) Reports Q3 Loss of $0.32

AdCare Health Systems (NYSE: ADK) reported Q3 EPS of ($0.32), versus ($0.22) reported last year. Revenue for the quarter came in at $10.4 million, versus $5.1 million reported last year.

Transition Summary

The company has entered into agreements for all 40 of the healthcare facilities it owned, operated or managed before the transition commenced.

• Thirty-six facilities have transferred operations to third-party operators or are under management contracts with an indefinite term.
• The company expects to transition operations of two facilities in Oklahoma to a third-party operator during the fourth quarter of 2015, subject to receipt of state regulatory approvals.
• One facility in Arkansas and one facility in Oklahoma have been sold.

The company's variable interest entity ("VIE") is subject to an asset purchase agreement that provides for the sale of an Alabama facility held by the VIE to a third party. The agreement provides for a closing on or before November 30, 2015. The sale is subject to the completion of satisfactory due diligence, the receipt of required licenses and other state regulatory approvals, and the satisfaction of other customary closing conditions.

Post-transition Financial Guidance

Once operations for the remaining two properties have been transitioned to third-party operators, the company expects:

• Annual revenue between $31.0 and $31.8 million;
• Annual rent expense of approximately $8.6 million;
• Annual general and administrative expense between $5.0 and $5.3 million, includes $1.3 of stock-based compensation;
• Annual net interest expense between $7.1 and $7.2 million;
• Annual preferred dividends of approximately $6.3 million; and
• Annual Adjusted FFO per share between $0.25 and $0.30.

This guidance assumes an outstanding diluted share count of approximately 19.9 million shares and excludes effects of any acquisitions, including the healthcare facility in Florida currently under a non-binding letter of intent.

For earnings history and earnings-related data on AdCare Health Systems (ADK) click here.

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