Attached files
| file | filename |
|---|---|
| 8-K - 8-K - REGIONAL HEALTH PROPERTIES, INC | a13-6778_18k.htm |
Exhibit 99.1
ADCARE HEALTH SYSTEMS, INC. AND SUBSIDIARIES
UNAUDITED PRO FORMA CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Amounts in 000s)
Introduction and Basis of Presentation
On February 28, 2013, AdCare Health Systems, Inc. (“AdCare” or the “Company”) and certain of its subsidiaries (together, the “Ohio ALF Sellers”) sold to CHP Acquisition Company, LLC (“CHP”), pursuant to that certain Agreement of Sale, dated October 11, 2012 and amended December 28, 2012 (as amended, the “Ohio Sale Agreement”), between the Ohio ALF Sellers and CHP, certain land, buildings, improvements, furniture, fixtures and equipment comprising the Lincoln Lodge Retirement Residence (the “Lincoln Lodge Facility”) located in Columbus, Ohio for an aggregate purchase price of $2,400 (the “Lincoln Lodge Purchase Price”). As previously disclosed in the Company’s Current Report on Form 8-K filed with the Securities and Exchange Commission (“SEC”) on January 4, 2013, on December 28, 2012, the Ohio ALF Sellers sold to CHP, pursuant to the Ohio Sale Agreement, certain land, buildings, improvements, furniture, fixtures, operating agreements and equipment comprising the following assisted living facilities: (i) Hearth & Home of El Camino located in Springfield, Ohio; (ii) Hearth & Home of Van Wert located in Van Wert, Ohio; (iii) Hearth & Home at Harding located in Springfield, Ohio; and (iv) Hearth & Home at Urbana located in Urbana, Ohio for an aggregate purchase price of $16,098 ((i) through (iv), together with the Lincoln Lodge Facility, the “Sold Ohio Facilities”).
The Ohio Sale Agreement also includes the sale of Hearth & Home of Vandalia, the Company’s assisted living facility located in Vandalia, Ohio (the “Vandalia Facility”). The closing date for the sale of the Vandalia Facility is the sooner of: (x) September 1, 2014; (y) such time that the United States Department of Housing and Urban Development (“HUD”) approves the assignment to CHP of the HUD loan with respect to the Vandalia Facility; or (z) such time as HUD informs the Company of its desire to cause the parties to terminate that certain Management Agreement, dated December 28, 2012, between affiliates of the Company and affiliates of CHP. It is currently anticipated that the closing of the Vandalia Facility will occur in the first half of 2013. The Vandalia purchase price shall be the assumption of the HUD loan with respect to the Vandalia Facility which currently approximates $3,662.
The aggregate purchase price for all six assisted living facilities is $21,360. The purchase price consists of: (1) $6,277 in cash proceeds to the Company; (2) the repayment of the principal balance of HUD loans with respect to certain of the facilities in an aggregate amount of $7,821; (3) the assumption of the Vandalia Facility HUD loan (current principal balance of $3,662) and (4) a secured promissory note issued by CHP to the Company in the amount of $3,600. Cash proceeds to AdCare net of transaction costs, the payoff of accrued real estate taxes, debt prepayment penalties offset by the return of loan escrows totals approximately $6,050.
The gain on sale recognized on the sale of the four assisted living facilities that closed in December 2012 was approximately $6,975. The estimated loss on the sale of the Lincoln Lodge Facility is approximately $161 and the anticipated gain on sale the Vandalia Facility is $250.
The unaudited pro forma condensed consolidated balance sheet as of September 30, 2012 is presented to reflect the effect of the sale of the Sold Ohio Facilities and the Vandalia Facility as if they had occurred on September 30, 2012. The unaudited pro forma condensed consolidated statements of operations and for the nine months ended September 30, 2012 and 2011 and the years ended December 31, 2011 and 2010, are based on our historical consolidated statements of operations, and gives effect as if the sales had occurred on January 1, 2010.
The unaudited pro forma condensed consolidated financial statements presented are based on the assumptions and adjustments set forth in the notes thereto. The unaudited pro forma adjustments made in the compilation of the unaudited pro forma condensed consolidated financial statements were: directly attributable to the sale, based upon available information and assumptions, which we consider to be reasonable, and made solely for purposes of developing such unaudited pro forma financial information for illustrative purposes in compliance with the disclosure requirements of the SEC. The unaudited pro forma condensed consolidated financial information is presented for informational purposes only and should not be considered indicative of actual results that would have been achieved had the sale actually been consummated on the dates indicated and does not purport to be indicative of the financial condition as of any future date or results of operations for any future period.
The unaudited pro forma condensed consolidated financial information should be read in conjunction with the Company’s audited consolidated financial statements and notes thereto included in the Annual Report on Form 10-K for the year ended December 31, 2011 and the unaudited condensed consolidated financial statements and notes thereto included in our Quarterly Report on Form 10-Q for the nine months ended September 30, 2012.
ADCARE HEALTH SYSTEMS, INC. AND SUBSIDIARIES
UNAUDITED PRO FORMA CONDENSED CONSOLIDATED BALANCE SHEET
AS OF SEPTEMBER 30, 2012
(Amounts in 000s)
|
|
|
Historical |
|
Disposition |
|
Pro Forma |
|
Pro Forma |
| ||||
|
|
|
|
|
(A) |
|
|
|
|
| ||||
|
ASSETS |
|
|
|
|
|
|
|
|
| ||||
|
Current Assets: |
|
|
|
|
|
|
|
|
| ||||
|
Cash and cash equivalents |
|
$ |
9,884 |
|
$ |
— |
|
$ |
— |
|
$ |
9,884 |
|
|
Restricted cash and cash equivalents |
|
2,825 |
|
— |
|
— |
|
2,825 |
| ||||
|
Accounts receivable, net of allowance of $3,099 and $1,346 |
|
30,397 |
|
— |
|
— |
|
30,397 |
| ||||
|
Prepaid expenses and other |
|
892 |
|
(52 |
) |
— |
|
840 |
| ||||
|
Total current assets |
|
43,998 |
|
(52 |
) |
— |
|
43,946 |
| ||||
|
|
|
|
|
|
|
|
|
|
| ||||
|
Restricted cash and investments |
|
5,748 |
|
(893 |
) |
— |
|
4,855 |
| ||||
|
Property and equipment, net |
|
166,708 |
|
(12,008 |
) |
— |
|
154,700 |
| ||||
|
Intangible assets — bed licenses, net |
|
2,558 |
|
— |
|
— |
|
2,558 |
| ||||
|
Intangible assets — lease rights, net |
|
7,658 |
|
— |
|
— |
|
7,658 |
| ||||
|
Goodwill |
|
906 |
|
(906 |
) |
— |
|
0 |
| ||||
|
Escrow deposits for acquisitions |
|
812 |
|
— |
|
— |
|
812 |
| ||||
|
Lease deposits |
|
1,704 |
|
— |
|
— |
|
1,704 |
| ||||
|
Deferred loan costs, net |
|
6,630 |
|
(295 |
) |
— |
|
6,335 |
| ||||
|
Other assets |
|
169 |
|
— |
|
3,600 |
(B) |
3,769 |
| ||||
|
Total assets |
|
$ |
236,891 |
|
$ |
(14,154 |
) |
$ |
3,600 |
|
$ |
226,337 |
|
|
|
|
|
|
|
|
|
|
|
| ||||
|
LIABILITIES AND STOCKHOLDERS’ EQUITY |
|
|
|
|
|
|
|
|
| ||||
|
Current Liabilities: |
|
|
|
|
|
|
|
|
| ||||
|
Current portion of notes payable and other debt |
|
$ |
11,991 |
|
$ |
(169 |
) |
$ |
— |
|
$ |
11,822 |
|
|
Revolving credit facilities and lines of credit |
|
1,363 |
|
— |
|
(1,363 |
)(C) |
— |
| ||||
|
Accounts payable |
|
20,324 |
|
— |
|
— |
|
20,324 |
| ||||
|
Accrued expenses |
|
12,615 |
|
— |
|
130 |
(D) |
12,745 |
| ||||
|
Total current liabilities |
|
46,293 |
|
(169 |
) |
(1,233 |
) |
44,891 |
| ||||
|
|
|
|
|
|
|
|
|
|
| ||||
|
Notes payable and other debt, net of current portion: |
|
|
|
|
|
|
|
|
| ||||
|
Senior debt, net of discounts |
|
134,003 |
|
(11,360 |
) |
— |
|
122,643 |
| ||||
|
Convertible debt, net of discounts |
|
22,746 |
|
— |
|
— |
|
22,746 |
| ||||
|
Revolving credit facilities |
|
9,076 |
|
— |
|
(4,687 |
)(C) |
4,389 |
| ||||
|
Other debt |
|
887 |
|
— |
|
— |
|
887 |
| ||||
|
Derivative liability |
|
3,231 |
|
— |
|
— |
|
3,231 |
| ||||
|
Other liabilities |
|
1,728 |
|
— |
|
— |
|
1,728 |
| ||||
|
Deferred tax liability |
|
99 |
|
(77 |
) |
— |
|
22 |
| ||||
|
Total liabilities |
|
218,063 |
|
(11,606 |
) |
(5,920 |
) |
200,537 |
| ||||
|
|
|
|
|
|
|
|
|
|
| ||||
|
Commitments and contingencies (Note 14) |
|
— |
|
— |
|
— |
|
— |
| ||||
|
|
|
|
|
|
|
|
|
|
| ||||
|
Stockholders’ equity: |
|
|
|
|
|
|
|
|
| ||||
|
Preferred stock, no par value; 1,000 shares authorized; no shares issued or outstanding |
|
— |
|
— |
|
— |
|
— |
| ||||
|
Common stock and additional paid-in capital, no par value; 29,000 shares authorized; 14,657 and 12,802 shares issued and outstanding |
|
41,002 |
|
— |
|
— |
|
41,002 |
| ||||
|
Accumulated deficit |
|
(19,943 |
) |
(2,548 |
) |
9,520 |
|
(12,971 |
) | ||||
|
Total stockholders’ equity |
|
21,059 |
|
(2,548 |
) |
9,520 |
|
28,031 |
| ||||
|
Noncontrolling interest in subsidiaries |
|
(2,231 |
) |
— |
|
— |
|
(2,231 |
) | ||||
|
Total equity |
|
18,828 |
|
(2,548 |
) |
9,520 |
|
25,800 |
| ||||
|
Total liabilities and stockholders’ equity |
|
$ |
236,891 |
|
$ |
(14,154 |
) |
$ |
3,600 |
|
$ |
226,337 |
|
See accompanying notes to unaudited pro forma condensed consolidated financial statements
ADCARE HEALTH SYSTEMS, INC. AND SUBSIDIARIES
UNAUDITED PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
NINE MONTHS ENDED SEPTEMBER 30, 2012
(Amounts in 000s, except per share data)
|
|
|
Historical |
|
Disposition |
|
Pro Forma |
|
Pro Forma |
| ||||
|
|
|
|
|
(F) |
|
|
|
|
| ||||
|
Revenues: |
|
|
|
|
|
|
|
|
| ||||
|
Patient care revenues |
|
$ |
165,793 |
|
$ |
(6,797 |
) |
$ |
— |
|
$ |
158,996 |
|
|
Management revenues |
|
1,154 |
|
— |
|
— |
|
1,154 |
| ||||
|
Total revenues |
|
166,947 |
|
(6,797 |
) |
— |
|
160,150 |
| ||||
|
|
|
|
|
|
|
|
|
|
| ||||
|
Expenses: |
|
|
|
|
|
|
|
|
| ||||
|
Cost of services (exclusive of facility rent, depreciation and amortization) |
|
131,514 |
|
(4,356 |
) |
— |
|
127,158 |
| ||||
|
General and administrative |
|
13,188 |
|
— |
|
— |
|
13,188 |
| ||||
|
Facility rent expense |
|
6,196 |
|
— |
|
— |
|
6,196 |
| ||||
|
Depreciation and amortization |
|
5,370 |
|
(357 |
) |
— |
|
5,013 |
| ||||
|
Salary retirement and continuation costs |
|
38 |
|
— |
|
— |
|
38 |
| ||||
|
Total expenses |
|
156,306 |
|
(4,713 |
) |
— |
|
151,593 |
| ||||
|
|
|
|
|
|
|
|
|
|
| ||||
|
Income from Operations |
|
10,641 |
|
(2,084 |
) |
— |
|
8,557 |
| ||||
|
|
|
|
|
|
|
|
|
|
| ||||
|
Other Income (Expense): |
|
|
|
|
|
|
|
|
| ||||
|
Interest expense, net |
|
(10,312 |
) |
505 |
|
236 |
(G) |
(9,571 |
) | ||||
|
Acquisition costs, net of gains |
|
(1,160 |
) |
— |
|
— |
|
(1,160 |
) | ||||
|
Derivative gain (loss) |
|
(1,342 |
) |
— |
|
— |
|
(1,342 |
) | ||||
|
Other income (expense) |
|
242 |
|
— |
|
135 |
(H) |
377 |
| ||||
|
Total other income (expense), net |
|
(12,572 |
) |
505 |
|
371 |
|
(11,696 |
) | ||||
|
|
|
|
|
|
|
|
|
|
| ||||
|
Income (Loss) from Continuing Operations Before Income Taxes |
|
(1,931 |
) |
(1,579 |
) |
371 |
|
(3,139 |
) | ||||
|
Income Tax Expense |
|
(217 |
) |
268 |
|
(63 |
)(I) |
(12 |
) | ||||
|
Income (Loss) from Continuing Operations |
|
(2,148 |
) |
(1,311 |
) |
308 |
|
(3,151 |
) | ||||
|
Loss from discontinued operations |
|
(472 |
) |
— |
|
— |
|
(472 |
) | ||||
|
Net Income (Loss) |
|
(2,620 |
) |
(1,311 |
) |
308 |
|
(3,623 |
) | ||||
|
Net Loss Attributable to Noncontrolling Interests |
|
1,390 |
|
— |
|
— |
|
1,390 |
| ||||
|
Net Income (Loss) Attributable to AdCare Health Systems |
|
$ |
(1,230 |
) |
$ |
(1,311 |
) |
$ |
308 |
|
$ |
(2,233 |
) |
|
|
|
|
|
|
|
|
|
|
| ||||
|
Net Income (Loss) per Common Share — Basic: |
|
|
|
|
|
|
|
|
| ||||
|
Continuing Operations |
|
$ |
(0.05 |
) |
|
|
|
|
$ |
(0.13 |
) | ||
|
Discontinued Operations |
|
(0.03 |
) |
|
|
|
|
(0.03 |
) | ||||
|
|
|
$ |
(0.08 |
) |
|
|
|
|
$ |
(0.16 |
) | ||
|
Net Income (Loss) per Common Share — Diluted: |
|
|
|
|
|
|
|
|
| ||||
|
Continuing Operations |
|
$ |
(0.05 |
) |
|
|
|
|
$ |
(0.13 |
) | ||
|
Discontinued Operations |
|
(0.03 |
) |
|
|
|
|
(0.03 |
) | ||||
|
|
|
$ |
(0.08 |
) |
|
|
|
|
$ |
(0.16 |
) | ||
See accompanying notes to unaudited pro forma condensed consolidated financial statements
ADCARE HEALTH SYSTEMS, INC. AND SUBSIDIARIES
UNAUDITED PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
NINE MONTHS ENDED SEPTEMBER 30, 2011
(Amounts in 000s, except per share data)
|
|
|
Historical |
|
Disposition |
|
Pro Forma |
|
Pro Forma |
| ||||
|
|
|
|
|
(F) |
|
|
|
|
| ||||
|
Revenues: |
|
|
|
|
|
|
|
|
| ||||
|
Patient care revenues |
|
$ |
104,596 |
|
$ |
(6,139 |
) |
$ |
— |
|
$ |
98,457 |
|
|
Management revenues |
|
1,312 |
|
— |
|
— |
|
1,312 |
| ||||
|
Total revenues |
|
105,908 |
|
(6,139 |
) |
— |
|
99,769 |
| ||||
|
|
|
|
|
|
|
|
|
|
| ||||
|
Expenses: |
|
|
|
|
|
|
|
|
| ||||
|
Cost of services (exclusive of facility rent, depreciation and amortization) |
|
84,916 |
|
(4,321 |
) |
— |
|
80,595 |
| ||||
|
General and administrative |
|
9,358 |
|
— |
|
— |
|
9,358 |
| ||||
|
Facility rent expense |
|
5,787 |
|
— |
|
— |
|
5,787 |
| ||||
|
Depreciation and amortization |
|
2,188 |
|
(352 |
) |
— |
|
1,836 |
| ||||
|
Salary retirement and continuation costs |
|
622 |
|
— |
|
— |
|
622 |
| ||||
|
Total expenses |
|
102,871 |
|
(4,673 |
) |
— |
|
98,198 |
| ||||
|
|
|
|
|
|
|
|
|
|
| ||||
|
Income from Operations |
|
3,037 |
|
(1,466 |
) |
— |
|
1,571 |
| ||||
|
|
|
|
|
|
|
|
|
|
| ||||
|
Other Income (Expense): |
|
|
|
|
|
|
|
|
| ||||
|
Interest expense, net |
|
(5,511 |
) |
614 |
|
238 |
(G) |
(4,659 |
) | ||||
|
Acquisition costs, net of gains |
|
(789 |
) |
— |
|
— |
|
(789 |
) | ||||
|
Derivative gain (loss) |
|
807 |
|
— |
|
— |
|
807 |
| ||||
|
Loss on extinguishment of debt |
|
(136 |
) |
— |
|
— |
|
(136 |
) | ||||
|
Other income (expense) |
|
567 |
|
— |
|
135 |
(H) |
702 |
| ||||
|
Total other income (expense), net |
|
(5,062 |
) |
614 |
|
373 |
|
(4,075 |
) | ||||
|
|
|
|
|
|
|
|
|
|
| ||||
|
Income (Loss) from Continuing Operations Before Income Taxes |
|
(2,025 |
) |
(852 |
) |
373 |
|
(2,504 |
) | ||||
|
Income Tax Expense |
|
(414 |
) |
145 |
|
(64 |
)(I) |
(333 |
) | ||||
|
Income (Loss) from Continuing Operations |
|
(2,439 |
) |
(707 |
) |
309 |
|
(2,837 |
) | ||||
|
Loss from discontinued operations |
|
(285 |
) |
— |
|
— |
|
(285 |
) | ||||
|
Net Income (Loss) |
|
(2,724 |
) |
(707 |
) |
309 |
|
(3,122 |
) | ||||
|
Net Loss Attributable to Noncontrolling Interests |
|
1,090 |
|
— |
|
— |
|
1,090 |
| ||||
|
Net Income (Loss) Attributable to AdCare Health Systems |
|
$ |
(1,634 |
) |
$ |
(707 |
) |
$ |
309 |
|
$ |
(2,032 |
) |
|
|
|
|
|
|
|
|
|
|
| ||||
|
Net Income (Loss) per Common Share — Basic: |
|
|
|
|
|
|
|
|
| ||||
|
Continuing Operations |
|
$ |
(0.14 |
) |
|
|
|
|
$ |
(0.19 |
) | ||
|
Discontinued Operations |
|
(0.03 |
) |
|
|
|
|
(0.03 |
) | ||||
|
|
|
$ |
(0.17 |
) |
|
|
|
|
$ |
(0.21 |
) | ||
|
Net Income (Loss) per Common Share — Diluted: |
|
|
|
|
|
|
|
|
| ||||
|
Continuing Operations |
|
$ |
(0.14 |
) |
|
|
|
|
$ |
(0.19 |
) | ||
|
Discontinued Operations |
|
(0.03 |
) |
|
|
|
|
(0.03 |
) | ||||
|
|
|
$ |
(0.17 |
) |
|
|
|
|
$ |
(0.21 |
) | ||
See accompanying notes to unaudited pro forma condensed consolidated financial statements
ADCARE HEALTH SYSTEMS, INC. AND SUBSIDIARIES
UNAUDITED PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
YEAR ENDED DECEMBER 31, 2011
(Amounts in 000s, except per share data)
|
|
|
Historical |
|
Disposition |
|
Pro Forma |
|
Pro Forma |
| ||||
|
|
|
|
|
(F) |
|
|
|
|
| ||||
|
Revenues: |
|
|
|
|
|
|
|
|
| ||||
|
Patient care revenues |
|
$ |
149,733 |
|
$ |
(8,345 |
) |
$ |
— |
|
$ |
141,388 |
|
|
Management revenues |
|
1,620 |
|
— |
|
— |
|
1,620 |
| ||||
|
Total revenues |
|
151,353 |
|
(8,345 |
) |
— |
|
143,008 |
| ||||
|
|
|
|
|
|
|
|
|
|
| ||||
|
Expenses: |
|
|
|
|
|
|
|
|
| ||||
|
Cost of services (exclusive of facility rent, depreciation and amortization) |
|
122,219 |
|
(5,830 |
) |
— |
|
116,389 |
| ||||
|
General and administrative |
|
13,281 |
|
— |
|
— |
|
13,281 |
| ||||
|
Facility rent expense |
|
7,795 |
|
— |
|
— |
|
7,795 |
| ||||
|
Depreciation and amortization |
|
3,938 |
|
(478 |
) |
— |
|
3,460 |
| ||||
|
Salary retirement and continuation costs |
|
1,451 |
|
— |
|
— |
|
1,451 |
| ||||
|
Total expenses |
|
148,684 |
|
(6,308 |
) |
— |
|
142,376 |
| ||||
|
|
|
|
|
|
|
|
|
|
| ||||
|
Income from Operations |
|
2,669 |
|
(2,037 |
) |
— |
|
632 |
| ||||
|
|
|
|
|
|
|
|
|
|
| ||||
|
Other Income (Expense): |
|
|
|
|
|
|
|
|
| ||||
|
Interest expense, net |
|
(8,199 |
) |
818 |
|
318 |
(G) |
(7,063 |
) | ||||
|
Acquisition costs, net of gains |
|
(1,163 |
) |
— |
|
— |
|
(1,163 |
) | ||||
|
Derivative gain (loss) |
|
957 |
|
— |
|
— |
|
957 |
| ||||
|
Loss on extinguishment of debt |
|
(141 |
) |
— |
|
— |
|
(141 |
) | ||||
|
Other income (expense) |
|
552 |
|
— |
|
180 |
(H) |
732 |
| ||||
|
Total other income (expense), net |
|
(7,994 |
) |
818 |
|
498 |
|
(6,678 |
) | ||||
|
|
|
|
|
|
|
|
|
|
| ||||
|
Income (Loss) from Continuing Operations Before Income Taxes |
|
(5,325 |
) |
(1,219 |
) |
498 |
|
(6,046 |
) | ||||
|
Income Tax Expense |
|
(263 |
) |
207 |
|
(85 |
)(I) |
(141 |
) | ||||
|
Income (Loss) from Continuing Operations |
|
(5,588 |
) |
(1,012 |
) |
413 |
|
(6,187 |
) | ||||
|
Loss from discontinued operations |
|
(1,963 |
) |
— |
|
— |
|
(1,963 |
) | ||||
|
Net Income (Loss) |
|
(7,551 |
) |
(1,012 |
) |
413 |
|
(8,150 |
) | ||||
|
Net Loss Attributable to Noncontrolling Interests |
|
1,387 |
|
— |
|
— |
|
1,387 |
| ||||
|
Net Income (Loss) Attributable to AdCare Health Systems |
|
$ |
(6,164 |
) |
$ |
(1,012 |
) |
$ |
413 |
|
$ |
(6,763 |
) |
|
|
|
|
|
|
|
|
|
|
| ||||
|
Net Income (Loss) per Common Share — Basic: |
|
|
|
|
|
|
|
|
| ||||
|
Continuing Operations |
|
$ |
(0.40 |
) |
|
|
|
|
$ |
(0.46 |
) | ||
|
Discontinued Operations |
|
(0.19 |
) |
|
|
|
|
(0.19 |
) | ||||
|
|
|
$ |
(0.59 |
) |
|
|
|
|
$ |
(0.64 |
) | ||
|
Net Income (Loss) per Common Share — Diluted: |
|
|
|
|
|
|
|
|
| ||||
|
Continuing Operations |
|
$ |
(0.40 |
) |
|
|
|
|
$ |
(0.46 |
) | ||
|
Discontinued Operations |
|
(0.19 |
) |
|
|
|
|
(0.19 |
) | ||||
|
|
|
$ |
(0.59 |
) |
|
|
|
|
$ |
(0.64 |
) | ||
See accompanying notes to unaudited pro forma condensed consolidated financial statements
ADCARE HEALTH SYSTEMS, INC. AND SUBSIDIARIES
UNAUDITED PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
YEAR ENDED DECEMBER 31, 2010
(Amounts in 000s, except per share data)
|
|
|
Historical |
|
Disposition |
|
Pro Forma |
|
Pro Forma |
| ||||
|
|
|
|
|
(F) |
|
|
|
|
| ||||
|
Revenues: |
|
|
|
|
|
|
|
|
| ||||
|
Patient care revenues |
|
$ |
48,697 |
|
$ |
(7,419 |
) |
$ |
— |
|
$ |
41,278 |
|
|
Management revenues |
|
2,093 |
|
— |
|
— |
|
2,093 |
| ||||
|
Total revenues |
|
50,790 |
|
(7,419 |
) |
— |
|
43,371 |
| ||||
|
|
|
|
|
|
|
|
|
|
| ||||
|
Expenses: |
|
|
|
|
|
|
|
|
| ||||
|
Cost of services (exclusive of facility rent, depreciation and amortization) |
|
40,610 |
|
(5,824 |
) |
— |
|
34,786 |
| ||||
|
General and administrative |
|
7,936 |
|
— |
|
— |
|
7,936 |
| ||||
|
Facility rent expense |
|
2,858 |
|
— |
|
— |
|
2,858 |
| ||||
|
Depreciation and amortization |
|
1,261 |
|
(485 |
) |
— |
|
776 |
| ||||
|
Total expenses |
|
52,665 |
|
(6,309 |
) |
— |
|
46,356 |
| ||||
|
|
|
|
|
|
|
|
|
|
| ||||
|
Income from Operations |
|
(1,875 |
) |
(1,110 |
) |
— |
|
(2,985 |
) | ||||
|
|
|
|
|
|
|
|
|
|
| ||||
|
Other Income (Expense): |
|
|
|
|
|
|
|
|
| ||||
|
Interest expense, net |
|
(2,329 |
) |
849 |
|
318 |
(G) |
(1,162 |
) | ||||
|
Acquisition costs, net of gains |
|
2,446 |
|
— |
|
— |
|
2,446 |
| ||||
|
Derivative gain (loss) |
|
(343 |
) |
— |
|
— |
|
(343 |
) | ||||
|
Loss on extinguishment of debt |
|
(228 |
) |
— |
|
— |
|
(228 |
) | ||||
|
Other income (expense) |
|
(25 |
) |
— |
|
180 |
(H) |
155 |
| ||||
|
Total other income (expense), net |
|
(479 |
) |
849 |
|
498 |
|
868 |
| ||||
|
|
|
|
|
|
|
|
|
|
| ||||
|
Income (Loss) from Continuing Operations Before Income Taxes |
|
(2,354 |
) |
(261 |
) |
498 |
|
(2,117 |
) | ||||
|
Income Tax Expense |
|
(20 |
) |
45 |
|
(85 |
)(I) |
(60 |
) | ||||
|
Income (Loss) from Continuing Operations |
|
(2,374 |
) |
(216 |
) |
413 |
|
(2,177 |
) | ||||
|
Loss from discontinued operations |
|
174 |
|
— |
|
— |
|
174 |
| ||||
|
Net Income (Loss) |
|
(2,200 |
) |
(216 |
) |
413 |
|
(2,003 |
) | ||||
|
Net Loss Attributable to Noncontrolling Interests |
|
(544 |
) |
— |
|
— |
|
(544 |
) | ||||
|
Net Income (Loss) Attributable to AdCare Health Systems |
|
$ |
(2,744 |
) |
$ |
(216 |
) |
$ |
413 |
|
$ |
(2,547 |
) |
|
|
|
|
|
|
|
|
|
|
| ||||
|
Net Income (Loss) per Common Share — Basic: |
|
|
|
|
|
|
|
|
| ||||
|
Continuing Operations |
|
$ |
(0.38 |
) |
|
|
|
|
$ |
(0.36 |
) | ||
|
Discontinued Operations |
|
0.02 |
|
|
|
|
|
0.02 |
| ||||
|
|
|
$ |
(0.36 |
) |
|
|
|
|
$ |
(0.34 |
) | ||
|
Net Income (Loss) per Common Share — Diluted: |
|
|
|
|
|
|
|
|
| ||||
|
Continuing Operations |
|
$ |
(0.38 |
) |
|
|
|
|
$ |
(0.36 |
) | ||
|
Discontinued Operations |
|
0.02 |
|
|
|
|
|
0.02 |
| ||||
|
|
|
$ |
(0.36 |
) |
|
|
|
|
$ |
(0.34 |
) | ||
See accompanying notes to unaudited pro forma condensed consolidated financial statements
ADCARE HEALTH SYSTEMS, INC. AND SUBSIDIARIES
NOTES TO UNAUDITED PRO FORMA
CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Amounts in 000s)
The accompanying unaudited pro forma condensed consolidated balance sheet as of September 30, 2012 reflects the following adjustments:
(A) Elimination of the assets associated with the Sold Ohio Facilities and the Vandalia Facility and the related debt to be paid off with proceeds from the asset sale transaction or the debt assumed by CHP.
(B) Recognition of the $3,600 promissory note issued by CHP to the Company.
(C) Receipt of net proceeds of approximately $6,050. For purposes of the pro forma adjustment, it is assumed that net cash proceeds are used to repay amounts outstanding under the Company’s revolving credit facilities and lines of credit.
(D) Estimated current taxes payable on the sale of the facilities. The estimated current taxes payable amount differs from such amount calculated based on statutory rates primarily due to the utilization of previously unrecognized net operating loss carry forwards.
(E) Adjustments to tax balances to reflect the reversal of existing deferred tax liabilities associated with the Sold Ohio Facilities.
The accompanying unaudited pro forma condensed consolidated statements of operations for the nine months ended September 30, 2012 and 2011 and the years ended December 31, 2011 and 2010 reflect the following adjustments:
(F) Elimination of the operating results of the Sold Ohio Facilities and the Vandalia Facility which are included in the Company’s historical consolidated statements of operations. The interest expense related to the debt of the facilities that was paid off with the proceeds from the asset sale transaction or assumed by CHP is also eliminated in this column.
(G) Adjustment to interest expense to reflect the use of the cash proceeds to reduce borrowings under the Company’s revolving credit facilities and lines of credit.
(H) Adjustment to reflect interest income accruing at 5% on the $3,600 promissory note issued by CHP to the Company.
(I) Adjustment for the income tax consequences of the elimination of pretax income pertaining to the Sold Ohio Facilities and the Vandalia Facility and pro forma adjustments at the Company’s estimated combined federal and state tax rate of 17%.
The operating results of the Sold Ohio Facilities and the Vandalia Facility reflected in the Disposition Column do not include a 5% management fee paid by the facilities to the Company as such amount is eliminated in the historical financial statements.