ATLANTA, March 3, 2015 /PRNewswire/ -- AdCare Health
Systems, Inc. (NYSE MKT: ADK), (NYSE MKT: ADK.PRA), a leading
long-term care provider, today announced that, as part of its
ongoing strategic plan to transition from an owner and operator of
healthcare facilities to a healthcare property holding and leasing
company, it has signed an agreement with affiliates of Symmetry
Healthcare Management, an operator of long-term care facilities, to
lease two of its skilled nursing facilities in South Carolina and one in North Carolina. The company also announced it
has closed two long-term mortgage refinancing arrangements from a
third-party lender, with respect to properties located in
Arkansas and South Carolina.
Bill McBride, AdCare's President
and Chief Executive Officer, commented, "With the signing of lease
agreements on our North and South
Carolina properties, we have now signed lease agreements to
transition more than 80% of our owned and leased properties to the
new leasing model as planned by the end of the first quarter of
2015. We continue to work expeditiously to obtain the licenses and
approvals necessary to finalize these transactions, as well as
negotiate and execute lease agreements on the remaining six
facilities by the end of the second quarter of 2015."
Facilities Leases in North and South Carolina
Symmetry Healthcare Management and its affiliates focus on all
aspects of long term care, operating facilities in five states,
including 16 facilities in South
Carolina and Florida. The
leasing agreement with Symmetry is contingent on all licenses and
other approvals required by the states of North and South Carolina and is expected to become
effective on or before May 1,
2015.
Under the terms of the triple net lease agreements, the lessees
of the facilities will be responsible for day-to-day management,
ongoing maintenance and facility improvements for the duration of
the leases. The initial term of the leases is fifteen years with a
five year renewal option. The annual rent in the first year will
total $1.8 million and will escalate
at 3% each year through the initial term and 3% upon renewal.
Refinancing Agreement for Properties in Arkansas and South
Carolina
The third-party mortgage refinancing agreement, which includes
long-term refinancing of approximately $21.0
million of mortgage debt with more favorable terms and an
extended maturity date, is associated with the Company's Northridge
Health Care, Woodland Hills Health Care and Cumberland Healthcare
nursing facilities, each located in Arkansas, and the Company's Georgetown
Healthcare and Rehabilitation and Sumter Valley Nursing and Rehab
Center, each located in South
Carolina.
The Arkansas Mortgage Facility and the South Carolina Mortgage
Facility are guaranteed by AdCare Health Systems, Inc. and are
secured by a first-priority security interest in favor of the
lender in the Arkansas Properties and the South Carolina
Properties, respectively, and all other assets of the Company's
subsidiaries which own such properties.
Business Update
Since the Board approved the strategic plan to transition the
Company's business from an owner and operator of healthcare
facilities to a healthcare property holding and leasing company,
the Company has entered into agreements to lease or sublease 31 of
its 37 healthcare facilities. Of these 31 healthcare
facilities,
- Eight are completed transactions.
- As previously announced, the Company signed an agreement for
the lease of 10 facilities to Aria Health Group, LLC and expects to
complete transfer of operations by the end of the second quarter of
2015.
- The Company also expects to complete transfer of operations on
the two Wellington facilities
during the second quarter of 2015.
- The Company also expects to complete transfer of operations on
the two C-Ross facilities during the second quarter of 2015.
- The Company also expects to complete transfer of operations on
the three Symmetry facilities during the second quarter of
2015.
- The remaining six healthcare facilities are expected to close
during the second quarter of 2015 when financing approval is
obtained from HUD.
About AdCare Health Systems
AdCare Health Systems, Inc. (NYSE MKT: ADK) (NYSE
MKT: ADK.PRA) is a recognized provider of senior living and
health care facility management. The Company owns and manages
long-term care facilities and retirement communities, and since the
Company's inception in 1988, its mission has been to provide the
highest quality of healthcare services to the elderly through its
operating subsidiaries, including a broad range of skilled nursing
and sub-acute care services. The Company has implemented a
strategic plan pursuant to which, through a series of leasing
transactions, it will transition from an owner and operator of
healthcare facilities to a healthcare property holding and leasing
company. 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. Statements in this announcement
that are forward-looking include, but are not limited to: (i)
statements regarding the strategic plan to transition the Company
to a healthcare property holding and leasing company; (ii)
statements regarding operating expenses, cash flow, return on
investment, profitability and shareholder value; (iii) statements
regarding dividend yield; and (iv) statements regarding the outlook
for financial metrics.
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 and include, among others,
AdCare's ability to secure lines of credit and/or an acquisition
credit facility, AdCare's ability to refinance its current debt on
more favorable terms, AdCare's ability to expand its borrowing
arrangement with certain existing lenders, AdCare's ability to
raise equity capital, AdCare's ability to improve operating
results, changes in the health care industry because of political
and economic influences, changes in regulations governing the
health care industry, changes in reimbursement levels including
those under the Medicare and Medicaid programs and changes in the
competitive marketplace. 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.
In addition, each facility mentioned in this press release is
operated by a separate, wholly owned, independent operating
subsidiary that has its own management, employees and assets.
References to the consolidated Company and its assets and
activities, as well as the use of terms such as "we," "us," "our,"
and similar verbiage, is not meant to imply that AdCare Health
Systems, Inc. has direct operating assets, employees or revenue or
that any of the facilities, the home health business or other
related businesses are operated by the same entity.
Company
Contact
|
Investor
Relations
|
Bill McBride,
CEO
|
Brett Maas, Managing
Partner
|
AdCare Health
Systems, Inc.
|
Hayden IR
|
Tel (404)
781-2884
|
Tel (646)
536-7331
|
bill.mcbride@adcarehealth.com
|
brett@haydenir.com
|
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SOURCE AdCare Health Systems, Inc.