BRENTWOOD, Tenn., Nov. 3, 2016 /PRNewswire/ -- AAC Holdings,
Inc. (NYSE: AAC) announced its results for the third quarter ended
September 30, 2016. All comparisons
included in this release are to the comparable prior year period
unless otherwise noted.
Third Quarter 2016 Operational and Financial
Highlights:
- Client admissions increased 65% to 3,258
- Average daily residential census increased 52% to 853
- Outpatient visits increased 253% to 15,299
- Revenues increased 23% to $70.5
million
- Net loss to common stockholders was $2.5
million, or $(0.11) per
diluted share
- Cash flows used in operations totaled $5.0 million
- Adjusted EBITDA was $12.1 million
(see non-GAAP reconciliation herein)
- Adjusted earnings per diluted share was $0.19 (see non-GAAP reconciliation herein)
- Average daily residential revenue was $768
De Novo and Acquisition Highlights:
- In June 2016, opened the 93-bed
Laguna Treatment Hospital, in Aliso
Viejo, California
- Added 24 residential beds at Oxford Treatment Center's existing
location at the end of the third quarter of 2016; an additional 20
detoxification and 48 sober living beds are currently anticipated
to be completed by the end of the first quarter of 2017
- Opened 86 sober living beds at Resolutions Las Vegas and 30
sober living beds at Resolutions Arlington; currently anticipate
having 100 sober living beds at each of these locations opened by
the end of the second quarter of 2017
- In-network lab in Slidell,
Louisiana anticipated to be completed by year end 2016
- Development of a 150-bed residential treatment center in
Ringwood, New Jersey is
anticipated to be completed by the first quarter of 2018
"While many of our core operating metrics continued to
demonstrate year-over-year and sequential growth resulting in
increasing revenues from our residential and outpatient facilities,
lower-than-expected toxicology revenues, a slower than expected
ramp up of outpatient visits and census at Laguna, and
increased operating expenses had a greater impact on the third
quarter results than previously anticipated," noted Michael Cartwright, Chairman and Chief Executive
Officer of AAC Holdings, Inc. "With the recent resolution of
our subsidiaries' case in California and a robust de novo and M&A
pipeline, we remain bullish about our growth opportunities for
2017."
Third Quarter 2016 compared with Third Quarter 2015
Revenues in the third quarter of 2016 increased to $70.5 million compared with $57.4 million for the same period in the prior
year. Revenues were positively impacted by our acquisitions and de
novo projects, as well as an increase in average daily residential
census and outpatient visits at our 18 standalone outpatient
centers. Our average daily residential revenue declined 21.1% to
$768 for the third quarter of 2016
from $973 for same period in 2015.The
decline in the average daily residential revenue was significantly
impacted by a greater percentage of client related revenues being
derived from in-network beds during third quarter of 2016 as
compared to the same period in the prior year combined with a
decrease in point-of-care drug testing and diagnostic laboratory
services as a percentage of client related revenue.
Operating expenses increased to $73.2
million in the third quarter of 2016 from $53.7 million in the prior year period primarily
related to the growth in our residential average daily census and
outpatient visits combined with an increase in salaries, wages and
benefits. Salaries, wages and benefits as a percentage of
total revenues increased 51.7% in the third quarter of 2016 from
41.4% in the same period in the prior year primarily as a result of
an increase in stock based compensation and health insurance
costs.
Net loss to stockholders was $2.5
million, or $(0.11) per
diluted share, in the third quarter of 2016 compared with net
income of $2.5 million, or
$0.11 per diluted share, in the
prior-year period. Adjusted EBITDA increased to $12.1 million compared with $11.7 million for the same period in the prior
year. Adjusted net income available to stockholders decreased to
$4.3 million, or $0.19 per diluted share, compared with
$6.0 million, or $0.27 per diluted share, for the same period in
the prior-year. Adjusted net income available to stockholders,
adjusted diluted earnings per share and Adjusted EBITDA are
non-GAAP financial measures. Tables reconciling these non-GAAP
measures to the most directly comparable GAAP measures, net income
available to stockholders, diluted earnings per common share and
net income, respectively, are included in this release.
Third Quarter 2016 compared with Second Quarter 2016
Revenues in the third quarter of 2016 decreased to $70.5 million compared with $71.5 million for the second quarter of 2016. Our
average daily residential revenue declined 4.1% to $768 for the third quarter of 2016 from
$801 for the second quarter of
2016. The decline in the average daily residential revenue
was impacted by a lower percentage of client related revenue being
derived from point-of-care drug testing and diagnostic laboratory
services as a percentage of client related revenue. Our average
daily residential revenue excluding point-of-care drug testing and
diagnostic laboratory services was $613 for the third quarter of 2016, an increase
of 4% from the second quarter of 2016.
Operating expenses increased to $73.2
million from $69.6 million in
the second quarter of 2016 primarily as a result of an increase in
professional fees associated with legal costs in the California matter and increased client related
services expense associated with our de novo and expansion
activities and a full quarter impact of client related activities
associated with Solutions Treatment Centers that was acquired in
May 2016. Salaries, wages and benefits remained relatively
flat with the second quarter of 2016 primarily as a result of a
stabilization of health insurance costs in the third quarter of
2016.
Net loss to stockholders was $2.5
million, or $0.11 per diluted
share, in the third quarter of 2016 compared with net income of
$0.9 million, or $0.04 per diluted share, in the second quarter of
2016. Adjusted EBITDA decreased to $12.1 million compared with $12.5 million for the second quarter of 2016.
Adjusted net income available to stockholders increased to
$4.3 million, or $0.19 per diluted share, compared with
$4.1 million, or $0.18 per diluted share, for the second quarter
of 2016. Adjusted net income available to stockholders,
adjusted diluted earnings per share and Adjusted EBITDA are
non-GAAP financial measures. Tables reconciling these measures to
the most directly comparable GAAP measures, net income available to
stockholders, diluted earnings per common share and net
income, respectively, are included in this release.
California Resolution
On October 21, 2016, certain of
AAC Holdings' subsidiaries reached a resolution with the Bureau of
Medi-Cal Fraud and Elder Abuse of the Office of the Attorney
General of the State of California
(the "BMFEA"). Under terms of a stipulated settlement, BMFEA
dismissed all criminal charges against the Company's subsidiaries,
American Addiction Centers, Inc. (formerly known as Forterus,
Inc.), Forterus Health Care Services, Inc. and ABTTC, Inc. in the
case entitled People v. McCausland, et al.
As part of the settlement, the Company has agreed to, among
other things and subject to certain limitations, implement and
maintain over the next three years certain compliance, internal
audit and quality review programs to ensure high standards for
safety, reliability and clinical outcomes for its operations in
California, establish a compliance
committee and establish an oversight committee of the board of
directors of the Company.
These programs will be monitored by an independent party for
effectiveness at the Company's expense. AAC paid the
State of California approximately
$550,000 for costs related to the
legal proceedings and $200,000 as a
civil monetary penalty, the total of which was accrued for and
recognized as litigation settlement expense in the third quarter of
2016.
De Novo Activity and Bed Expansion Pipeline
Laguna Treatment Hospital, a 93-bed Chemical Dependency
Rehabilitation Hospital the Company opened near Aliso Viejo, California in June 2016, continues to ramp up admissions. By
the end of the third quarter of 2016, AAC was treating an average
of 26 clients per day in the facility. AAC has staffed the hospital
to ramp up admissions over the first 12 to 18 months of
operation.
The development of a 150-bed residential treatment center in
Ringwood, New Jersey continues on
pace for an anticipated completion in the first quarter of
2018.
The Company added 24 residential beds at Oxford Treatment Center
in Mississippi at the end of the
third quarter of 2016 and an additional 20 detoxification and
48 sober living beds are currently anticipated to be completed by
the end of the first quarter 2017.
The Company opened 86 sober living beds at Resolutions Las Vegas
and 30 sober living beds at Resolutions Arlington during the third
quarter of 2016 and currently anticipates having 100 sober living
beds at each of these locations opened by the end of the second
quarter of 2017.
The in-network lab in Slidell,
Louisiana is currently anticipated to be completed by year
end 2016.
Financing Activity
As previously disclosed, in July
2016, the Company increased its senior secured credit
facility to $171.3 million,
consisting of a $50.0 million
revolving credit facility and a $121.3
million term loan. The facility is scheduled to mature in
March 2020 and bears interest at
LIBOR plus a margin between 2.25% to 3.25% or a base rate plus a
margin between 1.25% and 2.25%, in each case depending on the
Company's leverage ratio. The facility has an accordion feature
that provides for an additional $75.0
million of borrowing capacity under the credit facility,
subject to certain consents and conditions, including obtaining
additional commitments from lenders.
Balance Sheet and Cash Flows from Operations
As of September 30, 2016, AAC
Holdings' balance sheet reflected cash and cash equivalents of
$13.3 million and total debt of
$189.4 million. Capital expenditures
in the third quarter of 2016 totaled $10.2
million. Cash flows used in operations totaled $5.0 million for the third quarter of 2016
compared with $0.8 million in the
prior-year period. Cash flows related to the California matter totaled $3.0 million and $4.8
million for the third quarters of 2016 and 2015,
respectively. Days sales outstanding ("DSO") was 105 for the
third quarter of 2016 compared with 95 days in the second quarter
of 2016 and 93 for the prior-year period. The increase in days
was related to acquired accounts receivable, de novo projects and
slower collections related to laboratory services. DSO's at
legacy facilities were 81 days, up from 73 days in the third
quarter of 2015 and down from 84 days in the second quarter of
2016. Provision for doubtful accounts was 6.8% of total
revenues for the third quarter of 2016 compared with 9.4% of total
revenues for the prior-year period.
2016 Outlook
AAC updated its guidance for the full year 2016. Revenues are
expected to be in the range of $275 million
to $280 million. This estimate is based on average daily
residential census for the year of 830; average daily residential
revenue of approximately $780 to
$790; and approximately $39 million
to $41 million of revenue from standalone outpatient centers
and related lab services from those visits, as well as the other
revenue from Referral Solutions Group.
Adjusted EBITDA is expected to be in the range of $47 million to $49 million and adjusted earnings
per diluted share is expected to be in the range of $0.69 to $0.77. Assumptions also include an
annual effective tax rate of 16% and diluted weighted-average
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,
expenses related to legal defenses and de novo start-up
expenses.
With respect to our "2016 Outlook" above, reconciliation of
adjusted EBITDA and adjusted earnings per diluted 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 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, later this morning at
10:00 a.m. CT. The number to call for
this interactive teleconference is (412) 542-4144. A replay of the
conference call will be available through November 10, 2016, by dialing (412) 317-0088 and
entering the replay access code: 10094431.
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
@AAC_Tweet.
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; "Holdings" or the "Company") possible or assumed
future results of operations, including descriptions of 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) our failure to successfully achieve growth
through acquisitions and de novo expansions; (v) uncertainties
regarding the timing of the closing of acquisitions; (vi) the
possibility that a governmental entity may prohibit, delay or
refuse to grant approval for the consummation of an acquisition;
(vii) our failure to achieve anticipated financial results from
prior acquisitions; (viii) a disruption in our ability to perform
definitive drug testing services; (ix) maintaining compliance with
applicable regulatory authorities, licensure and permits to operate
our facilities and lab; (x) a disruption in our business and
reputation and potential economic consequences with the civil
securities claims brought by shareholders; (xi) our inability to
agree on conversion and other terms for the balance of convertible
debt; (xii) our inability to meet our covenants in the loan
documents; (xiii) our inability to obtain senior lender consent to
exceed the current $50 million limit
in unsecured subordinated debt; (xiv) our inability to integrate
newly acquired facilities;; and (xv) 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,
2016
|
|
June 30,
2016
|
|
March 31,
2016
|
|
September 30,
2015
|
|
September 30,
2016
|
|
September 30,
2015
|
Revenues
|
|
|
|
|
|
|
|
|
|
|
|
|
Client related
revenue
|
|
$
68,491
|
|
$
68,226
|
|
$
62,706
|
|
$
53,695
|
|
$
199,423
|
|
$
150,302
|
Other
revenue
|
|
2,037
|
|
3,316
|
|
2,642
|
|
3,677
|
|
7,995
|
|
3,677
|
Total
revenues
|
|
70,528
|
|
71,542
|
|
65,348
|
|
57,372
|
|
207,418
|
|
153,979
|
Operating
expenses
|
|
|
|
|
|
|
|
|
|
|
|
|
Salaries, wages and
benefits
|
|
36,479
|
|
36,191
|
|
31,971
|
|
23,777
|
|
104,641
|
|
61,884
|
Advertising and
marketing
|
|
4,687
|
|
4,509
|
|
4,397
|
|
5,790
|
|
13,593
|
|
15,527
|
Professional
fees
|
|
5,278
|
|
3,869
|
|
4,307
|
|
3,383
|
|
13,454
|
|
6,713
|
Client related
services
|
|
7,040
|
|
5,500
|
|
4,919
|
|
4,438
|
|
17,459
|
|
10,831
|
Other operating
expenses
|
|
6,817
|
|
7,255
|
|
6,546
|
|
5,695
|
|
20,618
|
|
16,044
|
Rentals and
leases
|
|
2,108
|
|
1,892
|
|
1,532
|
|
1,583
|
|
5,532
|
|
3,442
|
Provision for
doubtful accounts
|
|
4,794
|
|
4,943
|
|
5,483
|
|
5,366
|
|
15,220
|
|
12,925
|
Litigation
settlement
|
|
940
|
|
42
|
|
108
|
|
859
|
|
1,090
|
|
2,379
|
Depreciation and
amortization
|
|
4,629
|
|
4,225
|
|
3,915
|
|
1,921
|
|
12,769
|
|
4,937
|
Acquisition-related
expenses
|
|
468
|
|
1,196
|
|
764
|
|
937
|
|
2,428
|
|
2,917
|
Total operating
expenses
|
|
73,240
|
|
69,622
|
|
63,942
|
|
53,749
|
|
206,804
|
|
137,599
|
Income from
operations
|
|
(2,712)
|
|
1,920
|
|
1,406
|
|
3,623
|
|
614
|
|
16,380
|
Interest
expense
|
|
1,927
|
|
2,221
|
|
1,702
|
|
1,203
|
|
5,850
|
|
2,426
|
Other income,
net
|
|
130
|
|
(36)
|
|
(7)
|
|
32
|
|
87
|
|
(28)
|
(Loss) income before
income tax expense
|
|
(4,769)
|
|
(265)
|
|
(289)
|
|
2,388
|
|
(5,323)
|
|
13,982
|
Income tax (benefit)
expense
|
|
(758)
|
|
(107)
|
|
(20)
|
|
644
|
|
(885)
|
|
5,003
|
Net (loss)
income
|
|
(4,011)
|
|
(158)
|
|
(269)
|
|
1,744
|
|
(4,438)
|
|
8,979
|
Less: net loss
attributable to noncontrolling interest
|
|
1,486
|
|
1,030
|
|
855
|
|
708
|
|
3,371
|
|
1,747
|
Net income
attributable to AAC Holdings, Inc. stockholders
|
|
(2,525)
|
|
872
|
|
586
|
|
2,452
|
|
(1,067)
|
|
10,726
|
BHR Series A
Preferred Unit dividend
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
(147)
|
Redemption of BHR
Series A Preferred Units
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
(534)
|
Net income available
to AAC Holdings, Inc. common
stockholders
|
|
$
(2,525)
|
|
$
872
|
|
$
586
|
|
$
2,452
|
|
$
(1,067)
|
|
$
10,045
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic earnings per
common share
|
|
$
(0.11)
|
|
$
0.04
|
|
$
0.03
|
|
$
0.11
|
|
$
(0.05)
|
|
$
0.47
|
Diluted earnings per
common share
|
|
$
(0.11)
|
|
$
0.04
|
|
$
0.03
|
|
$
0.11
|
|
$
(0.05)
|
|
$
0.46
|
Weighted-average
shares outstanding:
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic
|
|
22,957,834
|
|
22,761,671
|
|
22,094,790
|
|
21,922,374
|
|
22,607,194
|
|
21,471,063
|
Diluted
|
|
22,957,834
|
|
22,811,345
|
|
22,113,500
|
|
22,031,133
|
|
22,607,194
|
|
21,651,654
|
AAC HOLDINGS,
INC.
|
CONDENSED
CONSOLIDATED BALANCE SHEETS
|
Unaudited
|
(Dollars in
thousands)
|
|
|
|
|
|
|
|
|
|
|
|
|
September
30,
|
|
December
31,
|
|
|
2016
|
|
2015
|
Assets
|
|
|
|
|
Current
assets
|
|
|
|
|
Cash and cash
equivalents
|
|
$
13,276
|
|
$
18,750
|
Accounts receivable,
net of allowances
|
|
80,410
|
|
60,934
|
Prepaid expenses and
other current assets
|
|
3,233
|
|
6,840
|
Total current
assets
|
|
96,919
|
|
86,524
|
Property and
equipment, net
|
|
136,171
|
|
109,724
|
Goodwill
|
|
134,674
|
|
108,722
|
Intangible assets,
net
|
|
10,759
|
|
9,470
|
Other
assets
|
|
1,819
|
|
1,609
|
Total
assets
|
|
$
380,342
|
|
$
316,049
|
|
|
|
|
|
Liabilities and
Stockholders' Equity
|
|
|
|
|
Current
liabilities
|
|
|
|
|
Accounts
payable
|
|
$
10,304
|
|
$
7,878
|
Accrued
liabilities
|
|
21,302
|
|
21,653
|
Current portion of
long-term debt
|
|
8,617
|
|
3,611
|
Current portion of
long-term debt – related party
|
|
—
|
|
1,195
|
Total current
liabilities
|
|
40,223
|
|
34,337
|
Deferred tax
liabilities
|
|
—
|
|
1,195
|
Long-term debt, net
of current portion
|
|
180,809
|
|
140,335
|
Other long-term
liabilities
|
|
4,307
|
|
3,694
|
Total
liabilities
|
|
225,339
|
|
179,561
|
|
|
|
|
|
Stockholders'
equity
|
|
163,540
|
|
141,654
|
Noncontrolling
interest
|
|
(8,537)
|
|
(5,166)
|
Total stockholders'
equity including noncontrolling interest
|
|
155,003
|
|
136,488
|
Total liabilities
and stockholders' equity
|
|
$
380,342
|
|
$
316,049
|
AAC HOLDINGS,
INC.
|
CONDENSED
CONSOLIDATED STATEMENTS OF CASH FLOWS
|
Unaudited
|
(Dollars in
thousands)
|
|
|
|
|
|
|
|
Nine Months Ended
September 30,
|
|
|
2016
|
|
2015
|
Cash flows from
operating activities:
|
|
|
|
|
Net (loss)
income
|
|
$
(4,438)
|
|
$
8,979
|
Adjustments to
reconcile net (loss) income to net cash provided by operating
activities:
|
|
|
|
|
Provision for
doubtful accounts
|
|
15,220
|
|
12,925
|
Depreciation and
amortization
|
|
12,769
|
|
4,937
|
Equity
compensation
|
|
6,840
|
|
4,144
|
Loss on disposal of
property and equipment
|
|
163
|
|
—
|
Amortization of debt
issuance costs
|
|
404
|
|
156
|
Deferred income
taxes
|
|
(904)
|
|
(704)
|
Changes in operating
assets and liabilities:
|
|
|
|
|
Accounts
receivable
|
|
(32,867)
|
|
(35,934)
|
Prepaid expenses and
other assets
|
|
1,387
|
|
(3,920)
|
Accounts
payable
|
|
1,973
|
|
4,383
|
Accrued
liabilities
|
|
949
|
|
10,018
|
Other long term
liabilities
|
|
(180)
|
|
840
|
Net cash provided by
operating activities
|
|
1,316
|
|
5,824
|
Cash flows from
investing activities:
|
|
|
|
|
Purchase of property
and equipment
|
|
(29,985)
|
|
(42,779)
|
Acquisition of
subsidiaries, net of cash acquired
|
|
(19,150)
|
|
(83,971)
|
Escrow funds held on
acquisition
|
|
—
|
|
(500)
|
Purchase of
intangible assets
|
|
—
|
|
(540)
|
Purchase of other
assets, net
|
|
—
|
|
(50)
|
Net cash used in
investing activities
|
|
(49,135)
|
|
(127,840)
|
Cash flows from
financing activities:
|
|
|
|
|
Proceeds from
revolving line of credit, net
|
|
20,000
|
|
47,000
|
Proceeds from
long-term debt, net
|
|
27,500
|
|
73,802
|
Payments on long-term
debt and capital leases
|
|
(3,960)
|
|
(26,546)
|
Repayment of
long-term debt — related party
|
|
(1,195)
|
|
(542)
|
Repayment of
subordinated notes payable
|
|
—
|
|
(945)
|
Redemption of BHR
Series A Preferred Units
|
|
—
|
|
(8,529)
|
Net cash provided by
financing activities
|
|
42,345
|
|
84,240
|
Net change in cash
and cash equivalents
|
|
(5,474)
|
|
(37,776)
|
Cash and cash
equivalents, beginning of period
|
|
18,750
|
|
48,540
|
Cash and cash
equivalents, end of period
|
|
$
13,276
|
|
$
10,764
|
AAC HOLDINGS,
INC.
|
OPERATING
METRICS
|
Unaudited
|
|
|
|
|
|
|
|
|
|
|
|
Three Months
Ended
|
|
|
September 30,
2016
|
|
June 30,
2016
|
|
March 31,
2016
|
|
September 30,
2015
|
Operating
Metrics:
|
|
|
|
|
|
|
|
|
Average daily
residential census1
|
|
853
|
|
821
|
|
764
|
|
560
|
Outpatient
visits2
|
|
15,299
|
|
13,079
|
|
4,978
|
|
4,329
|
Average daily
residential revenue3
|
|
$
768
|
|
$
801
|
|
$
832
|
|
$
973
|
Average net daily
residential revenue4
|
|
$
716
|
|
$
738
|
|
$
756
|
|
$
872
|
New
admissions5
|
|
3,258
|
|
2,890
|
|
2,623
|
|
1,980
|
Bed count at end of
period6
|
|
1,140
|
|
1,139
|
|
934
|
|
663
|
Effective bed count
at end of period7
|
|
1,057
|
|
1,064
|
|
892
|
|
663
|
Average effective bed
utilization 8
|
|
82%
|
|
82%
|
|
86%
|
|
89%
|
Days sales
outstanding (DSO)9
|
|
105
|
|
95
|
|
88
|
|
93
|
|
1
Includes client census at all of our owned and leased residential
facilities.
|
|
2
Represents the total number of outpatient visits at our stand-alone
outpatient centers during the period.
|
|
3
Average daily residential revenue is calculated as total revenues
from all of our owned and leased residential facilities during the
period divided by the product of the number of days in the period
multiplied by average daily residential census.
|
|
4
Average net daily residential revenue is calculated as total
revenues from all of our owned and leased residential facilities
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.
|
|
5
Includes total client admissions at our owned and leased
residential facilities for the period presented.
|
|
6
Bed count at end of period includes all beds at owned and leased
inpatient facilities.
|
|
7
Effective bed count at end of period represents beds for which our
facilities are staffed based on planned census.
|
|
8 Average
effective bed utilization represents average daily residential
census divided by the average effective beds during the
quarter.
|
|
9
Revenues per day is calculated by dividing the revenues for the
period by the number of days in the period. Days sales outstanding
is then calculated as accounts receivable, net of allowance for
doubtful accounts, at the end of the period divided by revenues per
day.
|
AAC HOLDINGS,
INC.
|
SUPPLEMENTAL
RECONCILIATION OF NON-GAAP DISCLOSURES
|
Unaudited
|
(Dollars in
thousands, except per share amounts)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Reconciliation of
Adjusted EBITDA to Net Income
|
|
|
Three Months
Ended
|
|
Nine Months
Ended
|
|
|
September 30,
2016
|
|
June 30,
2016
|
|
March 31,
2016
|
|
September 30, 2015
(1)
|
|
September 30,
2016
|
|
September 30,
2015(1)
|
Net (loss)
income
|
|
$
(4,011)
|
|
$
(158)
|
|
$
(269)
|
|
$
1,744
|
|
$
(4,438)
|
|
$
8,979
|
Non-GAAP
Adjustments:
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest
expense
|
|
1,927
|
|
2,221
|
|
1,702
|
|
1,203
|
|
5,850
|
|
2,426
|
Depreciation and
amortization
|
|
4,629
|
|
4,225
|
|
3,915
|
|
1,921
|
|
12,769
|
|
4,937
|
Income tax (benefit)
expense
|
|
(758)
|
|
(107)
|
|
(20)
|
|
644
|
|
(885)
|
|
5,003
|
Stock-based
compensation and related tax reimbursements
|
|
2,064
|
|
2,137
|
|
2,638
|
|
1,270
|
|
6,839
|
|
4,144
|
Litigation settlement
and California matter related expense
|
|
3,961
|
|
1,311
|
|
2,325
|
|
2,248
|
|
7,597
|
|
3,768
|
Acquisition-related
expense
|
|
688
|
|
1,298
|
|
860
|
|
1,061
|
|
2,846
|
|
3,041
|
De novo start-up
expense and other
|
|
3,163
|
|
1,243
|
|
862
|
|
592
|
|
5,268
|
|
592
|
Facility closure
operating losses and expense
|
|
404
|
|
367
|
|
—
|
|
988
|
|
771
|
|
—
|
Adjusted
EBITDA
|
|
$
12,067
|
|
$
12,537
|
|
$
12,013
|
|
$
11,671
|
|
$
36,617
|
|
$
32,890
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Reconciliation of
Adjusted Net Income Available to AAC Holdings, Inc. Common
Stockholders to Net Income Available to AAC Holdings, Inc. Common
Stockholders
|
|
|
Three Months
Ended
|
|
Nine Months
Ended
|
|
|
September 30,
2016
|
|
June 30,
2016
|
|
March 31,
2016
|
|
September 30, 2015
(1)
|
|
September 30,
2016
|
|
September 30, 2015
(1)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income
available to AAC Holdings, Inc. common
stockholders
|
|
$
(2,525)
|
|
$
872
|
|
$
586
|
|
$
2,452
|
|
$
(1,067)
|
|
$
10,045
|
Non-GAAP
Adjustments:
|
|
|
|
|
|
|
|
|
|
|
|
|
Litigation settlement
and California matter related expense
|
|
3,961
|
|
1,311
|
|
2,325
|
|
2,248
|
|
7,597
|
|
3,768
|
Acquisition-related
expense
|
|
688
|
|
1,298
|
|
860
|
|
1,061
|
|
2,846
|
|
3,041
|
De novo start-up and
other expenses
|
|
3,163
|
|
1,243
|
|
862
|
|
592
|
|
5,268
|
|
592
|
Facility closure
operating losses and expense, net of taxes
|
|
404
|
|
367
|
|
—
|
|
988
|
|
771
|
|
—
|
Redemption of BHR
Series A Preferred Units
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
534
|
Income tax effect of
non-GAAP adjustments
|
|
(1,366)
|
|
(967)
|
|
(280)
|
|
(1,308)
|
|
(2,613)
|
|
(2,367)
|
Adjusted net income
available to AAC Holdings, Inc. common stockholders
|
|
$
4,325
|
|
$
4,124
|
|
$
4,353
|
|
$
6,033
|
|
$
12,802
|
|
$
15,613
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted-average
shares outstanding - diluted
|
|
22,957,834
|
|
22,811,345
|
|
22,113,500
|
|
22,031,133
|
|
22,607,194
|
|
21,651,654
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GAAP diluted earnings
per share
|
|
$
(0.11)
|
|
$
0.04
|
|
$
0.03
|
|
$
0.11
|
|
$
(0.05)
|
|
$
0.46
|
Adjusted diluted
earnings per share
|
|
$
0.19
|
|
$
0.18
|
|
$
0.20
|
|
$
0.27
|
|
$
0.57
|
|
$
0.72
|
|
Adjusted EBITDA,
adjusted net income available to AAC Holdings, Inc. common
stockholders, and adjusted diluted earnings per 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. 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 (loss) income adjusted for interest expense,
depreciation and amortization expense, income tax (benefit)
expense, 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 expenses and facility closure operating losses and
expense associated with the closing of FitRx in the fourth quarter
of 2015.
|
|
Management defines
Adjusted Net Income Available to AAC Holdings, Inc. common
stockholders as net income 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 expenses, facility closure
operating losses and expense associated with FitRx, 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 share represents diluted earnings per 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
"2016 Outlook" above, the Company is omitting a reconciliation of
forward-looking non-GAAP financial measures to the most directly
comparable GAAP financial measures because the Company is unable to
provide such reconciliations without the use of 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 expenses and acquisition-related expenses. We
expect these adjustments may have a potentially significant
impact on our future GAAP financial results.
|
|
(1) Balances shown
represent recasted amounts as disclosed in the Company's Current
Form 8-k as filed with the SEC on February 23,
2016.
|
To view the original version on PR Newswire,
visit:http://www.prnewswire.com/news-releases/aac-holdings-inc-reports-third-quarter-2016-results-300356554.html
SOURCE AAC Holdings, Inc.