BRENTWOOD, Tenn., May 3, 2017 /PRNewswire/ -- AAC Holdings, Inc.
(NYSE: AAC) announced its results for the first quarter ended
March 31, 2017. All comparisons
included in this release are to the comparable prior-year period
unless otherwise noted.
First Quarter 2017 Operational and Financial
Highlights:
- Client admissions increased 23% to 3,216
- Average daily residential census increased 5% to 802; average
sober living census was 154
- Outpatient visits increased 232% to 16,550
- Client related revenues increased 14% to $71.2 million
- Net loss available to AAC Holdings, Inc. common stockholders
was $0.6 million, or $(0.03) per diluted common share
- Adjusted EBITDA was $12.7 million
(see non-GAAP reconciliation herein)
- Adjusted earnings per diluted common share was $0.12 (see non-GAAP reconciliation herein)
"We are on track with our major initiatives for 2017 to deliver
exceptional clinical quality, drive revenue, reduce operating costs
and complete our planned bed expansion activity for the remainder
of 2017," noted Michael Cartwright,
Chairman and Chief Executive Officer of AAC Holdings, Inc. "We
are focused on providing a full continuum of care to our
clients that includes detoxification services in hospital
environments, residential treatment facilities, outpatient
services, sober living options and industry leading
diagnostic capabilities. Our added bed capacity
will complement the expansion of our business
development team and call center as we look to increase
admissions in the second half of the year to drive higher
utilization and operating margins."
First Quarter 2017 compared with First Quarter 2016
Beginning with the first quarter of 2017, AAC has elected to
break down its revenues between client related revenue and
non-client related revenue. Client related revenue includes: (1) residential treatment facility
services and related professional services; (2) outpatient facility
services, related professional services and sober living services;
and (3) client related diagnostic services, which includes point of
care drug testing and client related diagnostic laboratory
services. Non-client related revenue includes marketing and
diagnostic services provided to third parties. Prior-period results
have been conformed to the current-period presentation.
Residential treatment facility revenue increased 11% to
$49.5 million compared with
$44.7 million in the same period in
the prior year. As expected, our average daily residential revenue
(ADR) increased to $686 from
$643 in the same period in the prior
year as a result of an increase in the percentage of client days at
higher levels of care at our residential treatment facilities.
Outpatient and sober living facility revenue increased 200% to
$5.7 million compared with
$1.9 million in the same period in
the prior year. Average revenue per outpatient visit (ARV) was
$345 compared with $383 in the same period in the prior year. The
decrease in ARV is the result of an increase in the percentage of
outpatient visits being generated from our in-network outpatient
centers compared to our out-of-network outpatient
centers.
Client related diagnostic services revenue, which includes point
of care drug testing revenue and client related diagnostic
laboratory services revenue, was relatively flat at $16.0 million compared with $16.1 million in the same period in the prior
year.
Non-client related revenue was $1.8
million compared with $2.6
million in the same period in the prior year. The decrease
in non-client related revenue is primarily related to a
greater amount of Referral Solutions Group, LLC
generated leads utilized internally versus sold to other
treatment providers.
Operating expenses increased to $72.5
million from $63.9 million in
the prior-year period primarily related to the growth in outpatient
visits, and to a lesser degree, our residential average daily
census combined with an increase in salaries, wages and benefits.
Salaries, wages and benefits, as a percentage of total revenues,
were 50% compared with 49% in the prior year.
Net loss available to AAC Holdings, Inc. common stockholders was
$0.6 million, or $(0.03) per diluted common share, compared with
net income available to AAC Holdings, Inc. common stockholders of
$0.6 million, or $0.03 per diluted common share, in the prior-year
period. Adjusted EBITDA increased to $12.7
million compared with $12.0
million for the same period in the prior year. Adjusted net
income available to AAC Holdings, Inc. common stockholders
decreased to $2.8 million, or
$0.12 per diluted common share,
compared with $4.4 million, or
$0.20 per diluted common share, for
the same period in the prior year. Adjusted net income available to
AAC Holdings, Inc. common 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 (loss) income available to AAC
Holdings, Inc. common stockholders, diluted (loss) earnings per
common share and net loss, respectively, are included in this
release.
De Novo Activity and Bed Expansion Pipeline
Laguna Treatment Hospital received Joint Commission (JCAHO)
accreditation on February 14, 2017
and is licensed for 93 beds. As of April 30,
2017, the facility was treating 48 clients out of 72 staffed
beds.
At the Oxford Treatment Center in Mississippi, we added an additional 24
residential beds in April 2017,
increasing total residential bed capacity to 124. In
addition, the construction of 48 sober living beds is expected to
be completed in the third quarter of 2017.
At New Orleans East Hospital, we currently anticipate having 36
in-network beds providing detoxification and residential treatment
services operational mid-year 2017, subject to receiving
licensure.
At Resolutions Arlington, we currently anticipate
increasing available sober living beds from 80 to
155 by the end of 2017.
Bed capacity has been reduced by 12 at our Forterus
location in California due to our
initiative to treat higher acuity clients at our Laguna
Treatment Hospital.
We continue to develop the 150-bed residential treatment center
in Ringwood, New Jersey which is
expected to open mid-year 2018.
Balance Sheet and Cash Flows
As of March 31, 2017, AAC
Holdings' balance sheet reflected cash and cash equivalents of
$5.9 million, net property and
equipment of $145.4 million and total
debt of $198.4 million. Capital
expenditures in the first quarter of 2017 totaled $10.7 million. Cash flows provided by operations
totaled $4.4 million for the first
quarter of 2017 compared with cash flows provided by operations of
$4.3 million in the prior-year
period. Days sales outstanding ("DSO") was 116 for the first
quarter of 2017 compared with 88 for the prior-year period. Our
DSO's continue to be impacted by increased documentation requests
by commercial payors prior to payment and slower collections
related to laboratory services. Provision for doubtful accounts was
9% of total revenues for the first quarter of 2017 compared with 8%
of total revenues for the prior-year period.
2017 Outlook
AAC updated its full year 2017 guidance to include a breakdown
of its components of revenue. Total revenue for 2017 is expected to
be approximately $295 million to $305
million and be comprised of the following:
- Residential treatment facility revenue of approximately
$203 million to $207 million: based
on an average daily residential census of 890 to 900 and an ADR of
$625 to $630 (excludes point of care
drug testing and diagnostic lab services)
- Outpatient and sober living facility revenue of approximately
$30 million to $32 million: based on
total outpatient visits of 87,000 to 89,000 and an ARV of
$345 to $360 (excludes point of care
drug testing and diagnostic lab services)
- Client related diagnostic services revenue, including point of
care drug testing revenue and client related diagnostic lab
services revenue, of approximately $48
million to $50 million
- Non-client related revenue of approximately $14 million to $16 million related to Referral
Solutions Group and third party laboratory services
AAC affirmed its previously issued guidance for Adjusted EBITDA
in the range of $52 million to $54
million and adjusted earnings per diluted common share in
the range of $0.50 to $0.58. The
Company also continues to expect an annual effective tax rate of
37% to 39% and diluted weighted-average common 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 and
expenses related to legal defenses.
With respect to our "2017 Outlook" above, reconciliation of
adjusted EBITDA and adjusted earnings per diluted common 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 and other 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, on Thursday, May 4, 2017, at 8:00 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 May 11, 2017, by dialing (412) 317-0088 and
entering the replay access code: 10105997.
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.
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) an increase in our provision for doubtful
accounts based on the aging of receivables; (v) our failure
to successfully achieve growth through acquisitions and de novo
expansions; (vi) uncertainties regarding the timing of the closing
of acquisitions; (vii) the possibility that a governmental entity
may prohibit, delay or refuse to grant approval for the
consummation of an acquisition; (viii) our failure to achieve
anticipated financial results from prior acquisitions; (ix) a
disruption in our ability to perform definitive drug testing
services; (x) maintaining compliance with applicable regulatory
authorities, licensure and permits to operate our facilities and
lab; (xi) a disruption in our business and reputation and potential
economic consequences with the civil securities claims brought by
shareholders; (xii) our inability to agree on conversion and other
terms for the balance of convertible debt; (xiii) our inability to
meet our covenants in the loan documents; (xiv) our inability to
obtain senior lender consent to exceed the current $50 million limit in unsecured subordinated debt;
(xv) our inability to integrate newly acquired facilities; and
(xvi) 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
|
|
|
March 31,
2017
|
|
|
March 31,
2016
|
|
Revenues
|
|
|
|
|
|
|
|
Client related
revenue
|
$
|
71,219
|
|
|
$
|
62,706
|
|
Non-client related
revenue
|
|
1,820
|
|
|
|
2,642
|
|
Total
revenue
|
|
73,039
|
|
|
|
65,348
|
|
Operating
expenses
|
|
|
|
|
|
|
|
Salaries, wages and
benefits
|
|
36,772
|
|
|
|
31,971
|
|
Client related
services
|
|
6,378
|
|
|
|
4,919
|
|
Provision for doubtful
accounts
|
|
6,587
|
|
|
|
5,483
|
|
Advertising and
marketing
|
|
3,775
|
|
|
|
4,397
|
|
Professional
fees
|
|
2,642
|
|
|
|
4,307
|
|
Other operating
expenses
|
|
8,789
|
|
|
|
6,654
|
|
Rentals and
leases
|
|
1,885
|
|
|
|
1,532
|
|
Depreciation and
amortization
|
|
5,469
|
|
|
|
3,915
|
|
Acquisition-related
expenses
|
|
183
|
|
|
|
764
|
|
Total operating
expenses
|
|
72,480
|
|
|
|
63,942
|
|
Income from
operations
|
|
559
|
|
|
|
1,406
|
|
Interest
expense
|
|
2,734
|
|
|
|
1,702
|
|
Other expense
(income), net
|
|
34
|
|
|
|
(7)
|
|
Loss before income
tax benefit
|
|
(2,209)
|
|
|
|
(289)
|
|
Income tax
benefit
|
|
(565)
|
|
|
|
(20)
|
|
Net loss
|
|
(1,644)
|
|
|
|
(269)
|
|
Less: net loss
attributable to noncontrolling interest
|
|
1,041
|
|
|
|
855
|
|
Net (loss) income
available to AAC Holdings, Inc. common
stockholders
|
$
|
(603)
|
|
|
$
|
586
|
|
|
|
|
|
|
|
|
|
Basic (loss) earnings
per common share
|
$
|
(0.03)
|
|
|
$
|
0.03
|
|
Diluted (loss)
earnings per common share
|
$
|
(0.03)
|
|
|
$
|
0.03
|
|
Weighted-average
common shares outstanding:
|
|
|
|
|
|
|
|
Basic
|
|
23,163,626
|
|
|
|
22,094,790
|
|
Diluted
|
|
23,163,626
|
|
|
|
22,113,500
|
|
AAC HOLDINGS,
INC.
|
|
CONDENSED
CONSOLIDATED BALANCE SHEETS
|
|
Unaudited
|
|
(Dollars in
thousands)
|
|
|
|
|
|
|
|
|
|
|
|
|
March
31,
|
|
|
December
31,
|
|
|
|
2017
|
|
|
2016
|
|
Assets
|
|
|
|
|
|
|
|
|
Current
assets
|
|
|
|
|
|
|
|
|
Cash and cash
equivalents
|
|
$
|
5,880
|
|
|
$
|
3,964
|
|
Accounts receivable,
net of allowances
|
|
|
94,144
|
|
|
|
87,334
|
|
Prepaid expenses and
other current assets
|
|
|
4,897
|
|
|
|
5,181
|
|
Total current
assets
|
|
|
104,921
|
|
|
|
96,479
|
|
Property and
equipment, net
|
|
|
145,410
|
|
|
|
141,307
|
|
Goodwill
|
|
|
134,396
|
|
|
|
134,396
|
|
Intangible assets,
net
|
|
|
9,953
|
|
|
|
10,356
|
|
Deferred tax
assets
|
|
|
1,316
|
|
|
|
598
|
|
Other
assets
|
|
|
626
|
|
|
|
748
|
|
Total
assets
|
|
$
|
396,622
|
|
|
$
|
383,884
|
|
|
|
|
|
|
|
|
|
|
Liabilities and
Stockholders' Equity
|
|
|
|
|
|
|
|
|
Current
liabilities
|
|
|
|
|
|
|
|
|
Accounts
payable
|
|
$
|
13,711
|
|
|
$
|
9,155
|
|
Accrued
liabilities
|
|
|
24,865
|
|
|
|
26,742
|
|
Current portion of
long-term debt
|
|
|
10,965
|
|
|
|
9,445
|
|
Total current
liabilities
|
|
|
49,541
|
|
|
|
45,342
|
|
Long-term debt, net
of current portion and debt issuance costs
|
|
|
187,456
|
|
|
|
179,661
|
|
Other long-term
liabilities
|
|
|
4,121
|
|
|
|
4,093
|
|
Total
liabilities
|
|
|
241,118
|
|
|
|
229,096
|
|
|
|
|
|
|
|
|
|
|
Stockholders'
equity
|
|
|
166,863
|
|
|
|
165,106
|
|
Noncontrolling
interest
|
|
|
(11,359)
|
|
|
|
(10,318)
|
|
Total stockholders'
equity including noncontrolling interest
|
|
|
155,504
|
|
|
|
154,788
|
|
Total liabilities
and stockholders' equity
|
|
$
|
396,622
|
|
|
$
|
383,884
|
|
AAC
HOLDINGS,
INC.
|
|
CONDENSED
CONSOLIDATED STATEMENTS OF CASH FLOWS
|
|
Unaudited
|
|
(Dollars in
thousands)
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months
Ended
|
|
|
|
March 31,
2017
|
|
|
March 31,
2016
|
|
Cash flows from
operating activities:
|
|
|
|
|
|
|
|
|
Net loss
|
|
$
|
(1,644)
|
|
|
$
|
(269)
|
|
Adjustments to
reconcile net loss to net cash provided by operating
activities:
|
|
|
|
|
|
|
|
|
Provision for doubtful
accounts
|
|
|
6,587
|
|
|
|
5,483
|
|
Depreciation and
amortization
|
|
|
5,469
|
|
|
|
3,915
|
|
Equity
compensation
|
|
|
2,137
|
|
|
|
2,638
|
|
Amortization of debt
issuance costs
|
|
|
173
|
|
|
|
95
|
|
Deferred income
taxes
|
|
|
(718)
|
|
|
|
—
|
|
Changes in operating
assets and liabilities:
|
|
|
|
|
|
|
|
|
Accounts
receivable
|
|
|
(13,397)
|
|
|
|
(7,471)
|
|
Prepaid expenses and
other assets
|
|
|
406
|
|
|
|
(7)
|
|
Accounts
payable
|
|
|
4,556
|
|
|
|
(462)
|
|
Accrued
liabilities
|
|
|
759
|
|
|
|
302
|
|
Other long term
liabilities
|
|
|
28
|
|
|
|
55
|
|
Net cash provided by
operating activities
|
|
|
4,356
|
|
|
|
4,279
|
|
Cash flows from
investing activities:
|
|
|
|
|
|
|
|
|
Purchase of property
and equipment
|
|
|
(10,687)
|
|
|
|
(7,017)
|
|
Escrow funds held on
acquisition
|
|
|
—
|
|
|
|
(550)
|
|
Net cash used in
investing activities
|
|
|
(10,687)
|
|
|
|
(7,567)
|
|
Cash flows from
financing activities:
|
|
|
|
|
|
|
|
|
Proceeds from
revolving line of credit, net
|
|
|
11,679
|
|
|
|
—
|
|
Payments on long-term
debt and capital leases
|
|
|
(2,537)
|
|
|
|
(1,030)
|
|
Payment of tax on net
share settlement
|
|
|
(895)
|
|
|
|
—
|
|
Repayment of long-term
debt — related party
|
|
|
—
|
|
|
|
(1,195)
|
|
Net cash provided by
(used in) financing activities
|
|
|
8,247
|
|
|
|
(2,225)
|
|
Net change in cash
and cash equivalents
|
|
|
1,916
|
|
|
|
(5,513)
|
|
Cash and cash
equivalents, beginning of period
|
|
|
3,964
|
|
|
|
18,750
|
|
Cash and cash
equivalents, end of period
|
|
$
|
5,880
|
|
|
$
|
13,237
|
|
AAC HOLDINGS,
INC.
|
|
OPERATING
METRICS
|
|
Unaudited
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months
Ended
|
|
|
|
March 31,
2017
|
|
|
December 31,
2016
|
|
|
September 30,
2016
|
|
|
June 30,
2016
|
|
|
March 31,
2016
|
|
Operating
Metrics:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
New
admissions1
|
|
|
3,216
|
|
|
|
3,078
|
|
|
|
3,258
|
|
|
|
2,890
|
|
|
|
2,623
|
|
Average daily
residential census2
|
|
|
802
|
|
|
|
835
|
|
|
|
853
|
|
|
|
821
|
|
|
|
764
|
|
Average daily sober
living census3
|
|
|
154
|
|
|
|
127
|
|
|
|
114
|
|
|
|
88
|
|
|
|
80
|
|
Total
census
|
|
|
956
|
|
|
|
962
|
|
|
|
967
|
|
|
|
909
|
|
|
|
844
|
|
Average episode
length (days)4
|
|
|
27
|
|
|
|
27
|
|
|
|
27
|
|
|
|
28
|
|
|
|
28
|
|
Average daily
residential revenue5
|
|
$
|
686
|
|
|
$
|
667
|
|
|
$
|
624
|
|
|
$
|
600
|
|
|
$
|
643
|
|
Average net daily
residential revenue6
|
|
$
|
640
|
|
|
$
|
630
|
|
|
$
|
594
|
|
|
$
|
566
|
|
|
$
|
599
|
|
Revenue per
admission7
|
|
$
|
22,145
|
|
|
$
|
23,114
|
|
|
$
|
21,022
|
|
|
$
|
23,608
|
|
|
$
|
23,906
|
|
Outpatient
visits8
|
|
|
16,550
|
|
|
|
15,817
|
|
|
|
15,299
|
|
|
|
13,079
|
|
|
|
4,978
|
|
Average revenue per
outpatient visit9
|
|
$
|
345
|
|
|
$
|
360
|
|
|
$
|
329
|
|
|
$
|
309
|
|
|
$
|
383
|
|
Client related
diagnostic services10
|
|
|
23
|
%
|
|
|
20
|
%
|
|
|
22
|
%
|
|
|
28
|
%
|
|
|
26
|
%
|
Residential bed count
at end of period11
|
|
|
1,128
|
|
|
|
1,140
|
|
|
|
1,140
|
|
|
|
1,139
|
|
|
|
934
|
|
Effective residential
bed count at end of period12
|
|
|
1,063
|
|
|
|
1,067
|
|
|
|
1,057
|
|
|
|
1,064
|
|
|
|
892
|
|
Average effective
residential bed
utilization13
|
|
|
75
|
%
|
|
|
79
|
%
|
|
|
82
|
%
|
|
|
82
|
%
|
|
|
86
|
%
|
Days sales
outstanding (DSO)14
|
|
|
116
|
|
|
|
111
|
|
|
|
105
|
|
|
|
95
|
|
|
|
88
|
|
1
|
Represents total
client admissions at our owned and leased residential facilities
for the period presented.
|
2
|
Represents average daily client
census at all of our residential facilities.
|
3
|
Represents average
daily client census at Resolutions Oxford, Resolutions Las Vegas
and Resolutions Arlington.
|
4
|
Average episode
length is the consecutive number of days from admission
to discharge that a client stays at an AAC
residential facility and, when applicable, an AAC sober
living facility.
|
5
|
Average daily
residential revenue is calculated as total revenues from all of our
owned and leased residential facilities, less client related
diagnostic services revenue, during the period divided by the
product of the number of days in the period multiplied by average
daily residential census.
|
6
|
Average net daily
residential revenue is calculated as total revenues from all of our
owned and leased residential facilities, less client related
diagnostic services revenue, and 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.
|
7
|
Revenue per admission
is calculated by dividing client related revenue by new admissions.
This metric includes community based revenue.
|
8
|
Represents the total
number of outpatient visits at our standalone outpatient centers
during the period.
|
9
|
Average revenue per
outpatient visit is calculated as total revenues from all of our
owned and leased standalone outpatient facilities, less client
related diagnostic services revenue, during the period divided by
the number of outpatient visits during the period.
|
10
|
Client related
diagnostic services revenue, as a percentage of client related
revenue, includes point-of-care and client related diagnostic
laboratory services.
|
11
|
Residential bed count
at end of period includes all beds at owned and leased inpatient
facilities.
|
12
|
Effective bed count
at end of period represents the number of beds for which our
facilities are staffed based on planned census.
|
13
|
Average effective
residential bed utilization represents average daily residential
census divided by the average effective residential bed count
during the quarter.
|
14
|
Days sales
outstanding is calculated as accounts receivable, net of allowance
for doubtful accounts, at the end of the period divided by revenues
per day. Revenues per day is calculated by dividing revenues for
the period by the number of days in the period.
|
AAC HOLDINGS,
INC.
|
|
SUPPLEMENTAL
RECONCILIATION OF NON-GAAP DISCLOSURES
|
|
Unaudited
|
|
(Dollars in
thousands)
|
|
Reconciliation of
Adjusted EBITDA to Net (Loss) Income Available to AAC Holdings,
Inc. Common Stockholders
|
|
|
|
Three Months
Ended
|
|
|
|
March 31,
2017
|
|
|
March 31,
2016
|
|
Net (loss) income
available to AAC Holdings, Inc. common stockholders
|
|
$
|
(603)
|
|
|
$
|
586
|
|
Non-GAAP
Adjustments:
|
|
|
|
|
|
|
|
|
Interest
expense
|
|
|
2,734
|
|
|
|
1,702
|
|
Depreciation and
amortization
|
|
|
5,469
|
|
|
|
3,915
|
|
Income tax
benefit
|
|
|
(565)
|
|
|
|
(20)
|
|
Net loss attributable
to noncontrolling interest
|
|
|
(1,041)
|
|
|
|
(855)
|
|
Stock-based
compensation and related tax reimbursements
|
|
|
2,137
|
|
|
|
2,638
|
|
Litigation settlement
and California matter related expense
|
|
|
159
|
|
|
|
2,325
|
|
Acquisition-related
expense
|
|
|
272
|
|
|
|
860
|
|
De novo start-up and
other expense
|
|
|
3,354
|
|
|
|
862
|
|
Employee severance
expense
|
|
|
743
|
|
|
|
—
|
|
Adjusted
EBITDA
|
|
$
|
12,659
|
|
|
$
|
12,013
|
|
Adjusted EBITDA, adjusted net income available to AAC Holdings,
Inc. common stockholders, and adjusted diluted earnings per common
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, each of which are defined below. Management
believes the Non-GAAP Disclosures provide investors with additional
meaningful financial information that should be considered when
assessing our underlying business performance and trends. We
believe the Non-GAAP Disclosures also enhance investors' ability to
compare period-to-period financial results. 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
available to AAC Holdings, Inc. common stockholders adjusted for
interest expense, depreciation and amortization expense, income tax
benefit, net loss attributable to noncontrolling interest,
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 and other expenses, and
employee severance expense.
AAC HOLDINGS,
INC.
|
|
SUPPLEMENTAL
RECONCILIATION OF NON-GAAP DISCLOSURES
|
|
Unaudited
|
|
(Dollars in
thousands, except per share amounts)
|
|
Reconciliation of
Adjusted Net Income Available to AAC Holdings, Inc. Common
Stockholders to Net (Loss) Income Available to AAC Holdings, Inc.
Common Stockholders
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months
Ended
|
|
|
|
March 31,
2017
|
|
|
March 31,
2016
|
|
Net (loss)
income available to AAC Holdings, Inc. common
stockholders
|
|
$
|
(603)
|
|
|
$
|
586
|
|
Non-GAAP
Adjustments:
|
|
|
|
|
|
|
|
|
Litigation settlement
and California matter related expense
|
|
|
159
|
|
|
|
2,325
|
|
Acquisition-related
expense
|
|
|
272
|
|
|
|
860
|
|
De novo start-up and
other expense
|
|
|
3,354
|
|
|
|
862
|
|
Employee severance
expense
|
|
|
743
|
|
|
|
—
|
|
Income tax effect of
non-GAAP adjustments
|
|
|
(1,158)
|
|
|
|
(280)
|
|
Adjusted net income
available to AAC Holdings, Inc. common stockholders
|
|
$
|
2,767
|
|
|
$
|
4,353
|
|
Weighted-average
common shares outstanding - diluted
|
|
|
23,163,626
|
|
|
|
22,113,500
|
|
GAAP diluted earnings
per common share
|
|
$
|
(0.03)
|
|
|
$
|
0.03
|
|
Adjusted diluted
earnings per common share
|
|
$
|
0.12
|
|
|
$
|
0.20
|
|
Management defines adjusted net income available to AAC
Holdings, Inc. common stockholders as net income (loss) 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 and other expenses, employee
severance expense, and the income tax effect of the non-GAAP
adjustments at the then applicable effective tax rate.
Adjusted diluted earnings per common share represents diluted
earnings per common 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 "2017 Outlook" above, reconciliation of
adjusted EBITDA and adjusted earnings per diluted common 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
acquisition-related expenses and de novo start-up and other
expense. We expect these adjustments may have a potentially
significant impact on our future GAAP financial results.
AAC HOLDINGS,
INC.
|
|
SUPPLEMENTAL
RECONCILIATION OF NON-GAAP DISCLOSURES
|
|
Unaudited
|
|
(Dollars in
thousands)
|
|
Reconciliation of
Client Related Revenue Net of De novo and Certain Operating
Expenses to Client Related Revenue and Certain Operating
Expenses
|
|
|
|
|
|
|
|
|
|
The table below
provides supplemental detail on how certain Non-GAAP adjustments
impact client related revenue and certain operating expenses.
Management believes these Non-GAAP Disclosures provide investors
with additional meaningful financial information that should be
considered when assessing our underlying business performance and
trends and enhance the investors' ability to compare
period-to-period financial results.
|
|
|
|
|
|
|
|
|
|
|
Three Months
Ended
|
|
|
March 31,
2017
|
|
|
March 31,
2016
|
|
Client related
revenue
|
$
|
71,219
|
|
|
$
|
62,706
|
|
Non-GAAP
Adjustments:
|
|
|
|
|
|
|
|
De novo start-up
expense and other(1)
|
|
(2,607)
|
|
|
|
(2,421)
|
|
Adjusted client
related revenue net of de novo and facility
closure operating losses
|
$
|
68,612
|
|
|
$
|
60,285
|
|
|
|
|
|
|
|
|
|
Salaries, wages and
benefits
|
|
36,772
|
|
|
|
31,971
|
|
Non-GAAP
Adjustments:
|
|
|
|
|
|
|
|
Stock-based
compensation
|
|
(2,137)
|
|
|
|
(2,638)
|
|
De novo start-up
expense and other(1)
|
|
(2,857)
|
|
|
|
(1,929)
|
|
Acquisition-related
expense
|
|
—
|
|
|
|
(59)
|
|
Employee severence
expense
|
|
(743)
|
|
|
|
—
|
|
Adjusted salaries,
wages, and benefits
|
$
|
31,035
|
|
|
$
|
27,345
|
|
|
|
|
|
|
|
|
|
Client related
services
|
$
|
6,378
|
|
|
$
|
4,919
|
|
Non-GAAP
Adjustments:
|
|
|
|
|
|
|
|
De novo start-up
expense and other(1)
|
|
(509)
|
|
|
|
(270)
|
|
Adjusted client
related services
|
$
|
5,869
|
|
|
$
|
4,649
|
|
|
|
|
|
|
|
|
|
Provision for
doubtful accounts
|
$
|
6,587
|
|
|
$
|
5,483
|
|
Non-GAAP
Adjustments:
|
|
|
|
|
|
|
|
De novo start-up
expense and other(1)
|
|
(95)
|
|
|
|
(3)
|
|
Adjusted provision
for doubtful accounts
|
$
|
6,492
|
|
|
$
|
5,480
|
|
|
|
|
|
|
|
|
|
Advertising and
marketing
|
$
|
3,775
|
|
|
$
|
4,397
|
|
Non-GAAP
Adjustments:
|
|
|
|
|
|
|
|
De novo start-up
expense and other(1)
|
|
(1,319)
|
|
|
|
(439)
|
|
Adjusted advertising
and marketing
|
$
|
2,456
|
|
|
$
|
3,958
|
|
|
|
|
|
|
|
|
|
Professional
fees
|
$
|
2,642
|
|
|
$
|
4,307
|
|
Non-GAAP
Adjustments:
|
|
|
|
|
|
|
|
Litigation settlement
and California matter related expense
|
|
(159)
|
|
|
|
(2,325)
|
|
Acquisition-related
expense
|
|
(89)
|
|
|
|
(37)
|
|
De novo start-up
expense and other(1)
|
|
(45)
|
|
|
|
(5)
|
|
Adjusted professional
fees
|
$
|
2,349
|
|
|
$
|
1,940
|
|
Other operating
expenses
|
$
|
8,789
|
|
|
$
|
6,654
|
|
Non-GAAP
Adjustments:
|
|
|
|
|
|
|
|
De novo start-up
expense and other(1)
|
|
(983)
|
|
|
|
(478)
|
|
Adjusted other
operating expenses
|
$
|
7,806
|
|
|
$
|
6,176
|
|
|
|
|
|
|
|
|
|
Rentals and
leases
|
$
|
1,885
|
|
|
$
|
1,532
|
|
Non-GAAP
Adjustments:
|
|
|
|
|
|
|
|
De novo start-up
expense and other(1)
|
|
(153)
|
|
|
|
(159)
|
|
Adjusted rentals and
leases
|
$
|
1,732
|
|
|
$
|
1,373
|
|
(1)
|
De novo start-up
expenses and other primarily relate to de novo facility net
operating losses with respect to the opening of a de novo facility
and continuing for a period of time after the facility has begun to
accept clients, historically six to nine months, as the operations
and census increase to what we believe are normalized operating
levels.
|
To view the original version on PR Newswire,
visit:http://www.prnewswire.com/news-releases/aac-holdings-inc-reports-first-quarter-2017-results-300450905.html
SOURCE AAC Holdings, Inc.