BRENTWOOD, Tenn., Aug. 30, 2019 /PRNewswire/ -- AAC Holdings, Inc.
(NYSE: AAC) ("the Company" or "AAC") announced financial results
for the second quarter and six months ended June 30, 2019, as well as updated 2019
guidance.
Second Quarter 2019 Operational and Financial
Highlights:
(All comparisons are to first quarter
ended March 31, 2019, unless
otherwise noted)
- Total revenues improved by 13% to $62.7
million
- Total inpatient census improved by 8% to 802 from 740
- New admissions improved 4% to 4,830 from 4,641
- Average daily inpatient revenue improved 17% to $790 from $674
- Net loss attributable to AAC Holdings, Inc. common stockholders
decreased 25% to $16.4 million, or
$(0.66) per diluted common share from
$22.0 million, or $(0.90) per diluted share.
- Adjusted EBITDA improved by 144% to $2.9
million compared to $(6.5)
million (see non-GAAP reconciliation herein).
"Despite the challenges we faced last year, we continue to see
positive momentum in 2019 and believe that we will see continued
improvement throughout the remainder of 2019," said Michael Cartwright, AAC Chairman & Chief
Executive Officer. "Inpatient census has been improving throughout
2019 and is up by 38% at June 2019
compared to December 2018. The
initiatives in sales and marketing continue to show positive
results as we continue to enhance our community and online outreach
to those who need our help."
"The expense savings initiatives implemented in late 2018 and in
the first quarter of 2019 are having a positive impact. Operating
expenses have decreased by 18% or $15
million, for the second quarter of 2019 compared to the
second quarter of 2018," Cartwright said.
Cartwright added, "We are considering initial proposals from
third party investment firms as a result of the strategic
transaction process being led by Cantor Fitzgerald & Co.
and as we continue to show sequential improvement in our operating
results we are excited optimistic about the investment interest in
our Company and are engaged in talks with numerous well-regarded
financing sources."
Cost Savings Initiatives
The Company enacted a series of cost savings initiatives
beginning during the fourth quarter of 2018 and continuing into
2019. These initiatives have included reductions in the Company's
corporate expenses, consolidation of its Las Vegas market, consolidation of the its
southern California market, the
sale of the Company's New Orleans
operations, and the consolidation of its lab operations. Operating
expenses decreased by 18% or $15.1
million for the second quarter of 2019 compared to the
second quarter of 2018.
Second Quarter 2019 Financial Results
On a sequential basis total revenues increased by 13% in the
second quarter of 2019 compared to the first quarter of 2019 due to
improved average daily inpatient census and improved average daily
inpatient revenue. Average daily inpatient census improved by
approximately 8% and average daily inpatient revenue improved by
17%.
Operating expenses on a sequential basis decreased by
approximately 4% to $69.1 million for
the second quarter of 2019 compared to the first quarter of 2019
(excluding the litigation settlement and the gain on sale
recognized in the first quarter of 2019). This was primarily due to
the benefit from the cost savings initiatives enacted during the
fourth quarter for 2018 and into 2019. Operating expenses on a
year-over-year basis improved 18% or $15.1
million.
AAC breaks down its revenues between client related revenue and
non-client related revenue. Client related revenue includes: (1)
inpatient 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 as well as addiction services provided to individuals
in the criminal justice system.
Total revenues were $62.7 million
for the second quarter of 2019 compared with $55.4 million for the first quarter of 2019.
|
|
Three Months
Ended,
June 30,
2019
|
|
|
Three Months
Ended,
March 31,
2019
|
|
|
Increase/
(Decrease)
|
|
|
%
Change
|
|
Inpatient treatment
facility services
|
|
$
|
57,690
|
|
|
$
|
44,889
|
|
|
$
|
12,801
|
|
|
|
28.5
|
|
Outpatient facility
and sober living services
|
|
|
5,407
|
|
|
|
6,454
|
|
|
|
(1,047)
|
|
|
|
(16.2)
|
|
Client related
diagnostic services
|
|
|
(2,502)
|
|
|
|
2,146
|
|
|
|
(4,648)
|
|
|
|
(216.6)
|
|
Total client related
revenue
|
|
|
60,595
|
|
|
|
53,489
|
|
|
|
7,106
|
|
|
|
13.3
|
|
Non-client related
revenue
|
|
|
2,129
|
|
|
|
1,881
|
|
|
|
248
|
|
|
|
13.2
|
|
Total
revenues
|
|
$
|
62,724
|
|
|
$
|
55,370
|
|
|
$
|
7,354
|
|
|
|
13.3
|
|
Inpatient treatment facility services revenue increased 28.5% to
$57.7 million for the three months
ended, June 30, 2019, compared with
$44.9 million for the three months
ended, March 31, 2019.
Outpatient facility and sober living services revenue decreased
16.2% to $5.4 million for the three
months ended, June 30, 2019, compared
with $6.5 million for the three
months ended, March 31, 2019.
Client related diagnostic services revenue decreased 216.6% to
$(2.5) million for the three months
ended, June 30, 2019, compared with
$2.1 million for the three months
ended, March 31, 2019.
Non-client related revenue increased 13.2% to $2.1 million for the three months ended,
June 30, 2019, compared with
$1.9 million for the three months
ended, March 31, 2019.
Net loss attributable to AAC Holdings, Inc. common stockholders
was $(16.4) million, or $(0.66) per diluted common share for the three
months ended, June 30, 2019, compared
with net loss attributable to AAC Holdings, Inc. common
stockholders of $(22.0) million, or
$(0.90) per diluted common share for
the three months ended March 31,
2019.
Adjusted EBITDA increased to $2.9
million for the three months ended, June 30, 2019, compared with $(6.5) million for the three months ended,
March 31, 2019. Adjusted EBITDA, is a
non-GAAP financial measure. Tables reconciling these non-GAAP
measures to the most directly comparable GAAP measures are included
at the end of this release.
Balance Sheet and Cash Flows
As of June 30, 2019, AAC Holdings'
balance sheet reflected cash and cash equivalents of $2.6 million, accounts receivable of $48.7 million, net property and equipment of
$160.7 million and total debt of
$341.9 million (current and long-term
portions).
Cash flows used in operations totaled $13.5 million for the second quarter of 2019
compared to $9.6 million for the
first quarter of 2019. Days sales outstanding were 71 days for the
second quarter of 2019 compared to 74 days for the first quarter of
2019.
Credit Facilities
The Company is continuing discussions with lenders under its
senior credit facilities to address events of defaults that have
occurred relating to the Company's compliance with certain
covenants and obligations thereunder including minimum liquidity,
leverage ratio and certain interest payment
defaults. Management is pursuing one or more amendments to the
senior credit facilities, forbearance agreements or both, which
would address the Company's current liquidity and compliance
covenants.
Evaluation of Strategic Alternatives in AAC's Real Estate
Portfolio
The Company has commenced a process to generate additional value
from its assets, including its real estate portfolio consisting of
treatment centers located across the
United States. Management's goal is to leverage the
portfolio to create additional liquidity, lower its cost of capital
and enhance shareholder value. Real estate strategic alternatives
could include further sale leasebacks of individual facilities or
larger portions of the Company's real estate portfolio.
2019
Outlook
|
|
AAC updates its
guidance for the full year 2019 as follows:
|
|
|
|
Full Year 2019
Guidance
|
|
|
(in millions,
except per share data)
|
Total
Revenues
|
|
$255 -
$275
|
Inpatient treatment
facility revenue
|
|
$225 -
$235
|
Outpatient and
sober living facility revenue
|
|
$20 -
$25
|
Client related
diagnostic services revenue
|
|
$2 -
$5
|
Non-client related
revenue
|
|
$8 -
$10
|
|
|
|
Adjusted
EBITDA
|
|
$16 -
$21
|
Adjusted Earnings per
Diluted Common Share
|
|
$(1.80) -
$(1.50)
|
The Company expects diluted weighted-average common shares
outstanding of approximately 25.0 million for the year.
The outlook above does not include the impact of any future
acquisitions, transaction-related costs, litigation settlement or
expenses related to legal defenses.
With respect to the "2019 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 future GAAP financial results.
Earnings Conference Call
The Company has provided an earnings release supplement that
provides certain operating and financial results and information
regarding its 2019 annual outlook that is available online in the
Investor Relations section of the Company's website at
ir.americanaddictioncenters.org.
The Company will host a conference call and live audio webcast
on Friday, August 30, 2019, at 8:00 a.m. CT to
further discuss these results. The number to call for this
interactive teleconference is 1-877-224-7960. A replay of the
conference call will be available through September 13, 2019,
by dialing 877-344-7529 and entering the replay access code,
10134661.
The live audio webcast of the Company's quarterly
conference call will also be available online in the Investor
Relations section of the Company's website
at ir.americanaddictioncenters.org.
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; "AAC Holdings" or the "Company") possible or assumed
future results of operations, including descriptions of the
Company's revenue, 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)
the Company's inability to effectively operate its facilities; (ii)
the Company's reliance on its 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) the Company's failure to successfully achieve growth through
acquisitions and de novo projects; (v) risks associated with
estimates of the value of accounts receivable or deterioration in
collectability of accounts receivable; (vi) a failure to achieve
anticipated financial results from contemplated and prior
acquisitions; (vii) the possibility that a governmental entity may
prohibit, delay or refuse to grant approval for the consummation of
an acquisition; (viii) the Company's failure to achieve anticipated
financial results from contemplated and prior acquisitions; (ix) a
disruption in the Company's ability to perform diagnostic
laboratory services; (x) maintaining compliance with applicable
regulatory authorities, licensure and permits to operate the
Company's facilities and laboratories; (xi) a disruption in the
Company's business and reputational and economic risks associated
with the civil securities claims brought by shareholders or claims
by various parties; (xii) inability to meet the covenants in the
Company's loan documents or lack of borrowing capacity, including
the Company's inability to enter into forbearance agreements and
amendments with its lenders with respect to certain events of
default; (xiii) inability to successfully raise capital to meet the
Company's liquidity needs; and (xiv) general economic conditions,
as well as other risks discussed in the "Risk Factors" section of
the Company's Annual Report on Form 10-K for the year ended
December 31, 2018 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. The Company is in the process of
finalizing its Quarterly Report on Form 10-Q for the quarter ended
June 30, 2019, including the process
of reviewing the financial statements contained therein. Results
reported in this earnings release could change as a result of this
process.
AAC HOLDINGS,
INC.
|
|
CONDENSED
CONSOLIDATED STATEMENTS OF OPERATIONS
|
|
Unaudited
|
|
(Dollars in
thousands, except share data)
|
|
|
|
|
|
|
|
|
|
|
Three Months
Ended
|
|
|
June 30,
2019
|
|
|
March 31,
2019
|
|
Revenues
|
|
|
|
|
|
|
|
Client related
revenue
|
$
|
60,595
|
|
|
$
|
53,489
|
|
Non-client related
revenue
|
|
2,129
|
|
|
|
1,881
|
|
Total
revenues
|
|
62,724
|
|
|
|
55,370
|
|
|
|
|
|
|
|
|
|
Operating
expenses
|
|
|
|
|
|
|
|
Salaries, wages and
benefits
|
|
38,928
|
|
|
|
40,553
|
|
Client related
services
|
|
5,975
|
|
|
|
6,041
|
|
Advertising and
marketing
|
|
2,725
|
|
|
|
3,295
|
|
Professional
fees
|
|
5,557
|
|
|
|
4,122
|
|
Other operating
expenses
|
|
10,260
|
|
|
|
11,363
|
|
Rentals and
leases
|
|
2,094
|
|
|
|
2,000
|
|
Litigation
settlement
|
|
—
|
|
|
|
(1,238)
|
|
Depreciation and
amortization
|
|
3,572
|
|
|
|
4,344
|
|
Gain on
sale
|
|
—
|
|
|
|
(1,010)
|
|
Total operating
expenses
|
|
69,111
|
|
|
|
69,470
|
|
Loss from
operations
|
|
(6,387)
|
|
|
|
(14,100)
|
|
Interest expense,
net
|
|
12,582
|
|
|
|
10,260
|
|
Other income,
net
|
|
(232)
|
|
|
|
(211)
|
|
Loss before income
tax benefit
|
|
(18,737)
|
|
|
|
(24,149)
|
|
Income tax expense
(benefit)
|
|
323
|
|
|
|
(33)
|
|
Net loss
|
|
(19,060)
|
|
|
|
(24,116)
|
|
Less: net loss
attributable to noncontrolling interest
|
|
2,688
|
|
|
|
2,097
|
|
Net loss attributable
to AAC Holdings, Inc. common stockholders
|
$
|
(16,372)
|
|
|
$
|
(22,019)
|
|
|
|
|
|
|
|
|
|
Basic (loss) earnings
per common share
|
$
|
(0.66)
|
|
|
$
|
(0.90)
|
|
Diluted (loss)
earnings per common share
|
$
|
(0.66)
|
|
|
$
|
(0.90)
|
|
Weighted-average
common shares outstanding:
|
|
|
|
|
|
|
|
Basic
|
|
24,741,530
|
|
|
|
24,495,163
|
|
Diluted
|
|
24,741,530
|
|
|
|
24,495,163
|
|
AAC HOLDINGS,
INC.
|
|
CONDENSED
CONSOLIDATED BALANCE SHEETS
|
|
Unaudited
|
|
(Dollars in
thousands)
|
|
|
|
|
|
|
|
|
|
|
|
|
June
30
|
|
|
December
31
|
|
|
|
2019
|
|
|
2018
|
|
Assets
|
|
|
|
|
|
|
|
|
Current
assets
|
|
|
|
|
|
|
|
|
Cash and cash
equivalents
|
|
$
|
2,581
|
|
|
$
|
5,409
|
|
Accounts receivable,
net of allowances
|
|
|
48,747
|
|
|
|
47,860
|
|
Prepaid expenses and
other current assets
|
|
|
1,963
|
|
|
|
10,695
|
|
Total current
assets
|
|
|
53,291
|
|
|
|
63,964
|
|
Property and
equipment, net
|
|
|
160,749
|
|
|
|
166,921
|
|
Right-of-use assets,
net
|
|
|
28,328
|
|
|
|
—
|
|
Goodwill
|
|
|
198,952
|
|
|
|
198,952
|
|
Intangible assets,
net
|
|
|
10,383
|
|
|
|
12,063
|
|
Other
assets
|
|
|
11,362
|
|
|
|
10,377
|
|
Total
assets
|
|
$
|
463,065
|
|
|
$
|
452,277
|
|
|
|
|
|
|
|
|
|
|
Liabilities and
Stockholders' Equity
|
|
|
|
|
|
|
|
|
Current
liabilities
|
|
|
|
|
|
|
|
|
Accounts
payable
|
|
$
|
17,744
|
|
|
$
|
13,507
|
|
Accrued and other
current liabilities
|
|
|
31,998
|
|
|
|
30,423
|
|
Accrued
litigation
|
|
|
3,493
|
|
|
|
8,000
|
|
Current portion of
lease liability
|
|
|
5,109
|
|
|
|
121
|
|
Current portion of
long-term debt
|
|
|
334,534
|
|
|
|
309,394
|
|
Current portion of
financing lease obligation
|
|
|
24,489
|
|
|
|
—
|
|
Total current
liabilities
|
|
|
417,367
|
|
|
|
361,445
|
|
Deferred tax
liabilities
|
|
|
1,402
|
|
|
|
1,227
|
|
Long-term debt, net
of current portion and debt issuance costs
|
|
|
7,384
|
|
|
|
9,764
|
|
Lease liability, net
of current portion
|
|
|
28,325
|
|
|
|
—
|
|
Financing lease
obligation, net of current portion
|
|
|
—
|
|
|
|
24,421
|
|
Other long-term
liabilities
|
|
|
8,139
|
|
|
|
13,147
|
|
Total
liabilities
|
|
|
462,617
|
|
|
|
410,004
|
|
|
|
|
|
|
|
|
|
|
Stockholders' equity
|
|
|
27,373
|
|
|
|
64,413
|
|
Noncontrolling
interest
|
|
|
(26,925)
|
|
|
|
(22,140)
|
|
Total
stockholders' equity including noncontrolling
interest
|
|
|
448
|
|
|
|
42,273
|
|
Total liabilities
and stockholders' equity
|
|
$
|
463,065
|
|
|
$
|
452,277
|
|
AAC HOLDINGS,
INC.
|
|
CONDENSED
CONSOLIDATED STATEMENTS OF CASH FLOWS
|
|
Unaudited
|
|
(Dollars in
thousands)
|
|
|
|
|
|
|
|
|
|
|
Three Months
Ended
|
|
|
June 30,
2019
|
|
|
March 31,
2019
|
|
Cash flows used in
operating activities:
|
|
|
|
|
|
|
|
Net loss
|
$
|
(19,060)
|
|
|
$
|
(24,116)
|
|
Adjustments to
reconcile net loss to net cash used in operating
activities:
|
|
|
|
|
|
|
|
Depreciation and
amortization
|
|
3,572
|
|
|
|
4,344
|
|
Equity
compensation
|
|
850
|
|
|
|
364
|
|
Loss on disposal of
property and equipment
|
|
465
|
|
|
|
145
|
|
Amortization of debt
issuance costs
|
|
728
|
|
|
|
1,243
|
|
Deferred income
taxes
|
|
265
|
|
|
|
(90)
|
|
Changes in operating
assets and liabilities:
|
|
|
|
|
|
|
|
Accounts
receivable
|
|
(3,063)
|
|
|
|
2,176
|
|
Prepaid expenses and
other assets
|
|
1,701
|
|
|
|
7,808
|
|
Accounts
payable
|
|
577
|
|
|
|
3,660
|
|
Accrued and other
current liabilities
|
|
3,040
|
|
|
|
4,819
|
|
Accrued
litigation
|
|
(1,334)
|
|
|
|
(3,173)
|
|
Other long-term
liabilities
|
|
(1,227)
|
|
|
|
(6,763)
|
|
Net cash used in
operating activities
|
|
(13,486)
|
|
|
|
(9,583)
|
|
Cash flows used in
investing activities:
|
|
|
|
|
|
|
|
Purchase of property
and equipment
|
|
(1,075)
|
|
|
|
(913)
|
|
Sale of
subsidiary
|
|
—
|
|
|
|
887
|
|
Net cash used in
investing activities
|
|
(1,075)
|
|
|
|
(26)
|
|
Cash flows (used
in) provided by financing activities:
|
|
|
|
|
|
|
|
Payments on 2017
Credit Facility
|
|
(1,724)
|
|
|
|
(1,924)
|
|
Proceeds from 2019
Priming Facility, net of deferred financing costs
|
|
260
|
|
|
|
24,284
|
|
Proceeds from 2017
Credit Facility, net of deferred financing costs
|
|
1,211
|
|
|
|
250
|
|
Payments on finance
leases and other
|
|
(224)
|
|
|
|
(291)
|
|
Payments on AdCare
Note
|
|
(250)
|
|
|
|
(250)
|
|
Net cash (used in)
provided by financing activities
|
|
(727)
|
|
|
|
22,069
|
|
Net change in cash
and cash equivalents
|
|
(15,288)
|
|
|
|
12,460
|
|
Cash and cash
equivalents, beginning of period
|
|
17,869
|
|
|
|
5,409
|
|
Cash and cash
equivalents, end of period
|
$
|
2,581
|
|
|
$
|
17,869
|
|
AAC HOLDINGS,
INC.
|
|
OPERATING
METRICS
|
|
Unaudited
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three
Months
Ended
|
|
|
Six Months
Ended
|
|
|
June 30,
2019
|
|
|
March 31,
2019
|
|
|
June 30,
2019
|
|
Operating
Metrics:
|
|
|
|
|
|
|
|
|
|
|
|
New
admissions1
|
|
4,830
|
|
|
|
4,641
|
|
|
|
9,471
|
|
Average daily
inpatient census2
|
|
802
|
|
|
|
740
|
|
|
|
771
|
|
Average daily sober
living census3
|
|
185
|
|
|
|
213
|
|
|
|
199
|
|
Total average daily
census
|
|
987
|
|
|
|
953
|
|
|
|
970
|
|
Average episode
length (days)4
|
|
19
|
|
|
|
19
|
|
|
|
19
|
|
Average daily
inpatient revenue5
|
$
|
790
|
|
|
$
|
674
|
|
|
$
|
735
|
|
Revenue per
admission6
|
$
|
12,546
|
|
|
$
|
11,525
|
|
|
$
|
12,046
|
|
Outpatient
visits7
|
|
37,903
|
|
|
|
39,717
|
|
|
|
77,620
|
|
Revenue per
outpatient visit8
|
$
|
143
|
|
|
$
|
162
|
|
|
$
|
153
|
|
Client related
diagnostic services9
|
|
(4)%
|
|
|
|
4%
|
|
|
|
0%
|
|
Inpatient bed count
at end of period10
|
|
996
|
|
|
|
996
|
|
|
|
996
|
|
Effective inpatient
bed count at end of period11
|
|
992
|
|
|
|
992
|
|
|
|
992
|
|
Average effective
inpatient bed utilization12
|
|
81%
|
|
|
|
75%
|
|
|
|
78%
|
|
|
1 Represents total client admissions
at our inpatient facilities for the periods presented.
|
2 Represents average daily client
census at all of our inpatient facilities.
|
3 Represents average daily client
census at our sober living facilities.
|
4 Average episode length is the
consecutive number of days from admission to discharge
that a client stays at an AAC inpatient
facility and, when applicable, an AAC sober
living facility.
|
5 Average daily inpatient revenue is
calculated as total revenues from all of our inpatient facilities
during the period, divided by the product of the number of days in
the period multiplied by average daily inpatient census.
|
6 Revenue per admission is calculated
by dividing total client related revenue by new
admissions.
|
7 Represents the total number of
outpatient visits at our standalone outpatient centers during the
periods presented.
|
8 Revenue per outpatient visit is
calculated as total revenues from all of our standalone outpatient
facilities divided by the number of outpatient visits during the
period.
|
9 Client related diagnostic services
revenue, as a percentage of client related revenue, includes
point-of-care and client related diagnostic laboratory
services.
|
10 Inpatient bed count at end of
period includes all beds at inpatient facilities.
|
11 Effective bed count at end of
period represents the number of beds for which our facilities are
staffed based on planned census.
|
12 Average effective inpatient bed
utilization represents average daily inpatient census divided by
the average effective inpatient bed count during the applicable
period.
|
|
AAC HOLDINGS,
INC.
|
|
SUPPLEMENTAL
RECONCILIATION OF NON-GAAP DISCLOSURES
|
|
Unaudited
|
|
(Dollars in
thousands)
|
|
Reconciliation of
Adjusted EBITDA to Net Loss (Income) Attributable to AAC Holdings,
Inc. Common Stockholders
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months
Ended
|
|
|
|
June 30,
2019
|
|
|
March 31,
2019
|
|
Net loss attributable
to AAC Holdings, Inc. common stockholders
|
|
$
|
(16,372)
|
|
|
$
|
(22,019)
|
|
Non-GAAP
Adjustments1:
|
|
|
|
|
|
|
|
|
Interest
expense
|
|
|
12,582
|
|
|
|
10,260
|
|
Depreciation and
amortization
|
|
|
3,572
|
|
|
|
4,344
|
|
Income tax
benefit
|
|
|
323
|
|
|
|
(33)
|
|
Net loss attributable
to noncontrolling interest
|
|
|
(2,688)
|
|
|
|
(2,097)
|
|
Stock-based
compensation and other
|
|
|
1,539
|
|
|
|
364
|
|
Litigation settlement,
regulatory and California matter related expense
|
|
|
66
|
|
|
|
(988)
|
|
Acquisition-related
expense
|
|
|
40
|
|
|
|
28
|
|
Transaction
costs
|
|
|
532
|
|
|
|
1,517
|
|
Recruitment and
retention expense
|
|
|
50
|
|
|
|
375
|
|
Employee severance
expense
|
|
|
185
|
|
|
|
1,098
|
|
Facility closure
operating losses and expense
|
|
|
3,059
|
|
|
|
647
|
|
Adjusted
EBITDA
|
|
$
|
2,888
|
|
|
$
|
(6,504)
|
|
|
1 Adjusted
EBITDA, adjusted net (loss) income attributable 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 has chosen
to present these Non‐GAAP Disclosures to investors to enable
additional analyses of past, present and future operating
performance and as a supplemental means of evaluating operations
absent the effect of certain items that we do not consider
indicative of our ongoing core operating performance or are
non-cash items. Certain of these items may recur in the future.
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 attributable 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, certain regulatory and
California matter related expenses, acquisition-related expense
(which includes professional services for accounting, legal,
valuation services and licensing expenses), de novo start-up and
other expenses, recruitment and retention expense, employee
severance expense and facility closure operating losses and
expense.
|
AAC HOLDINGS,
INC.
|
|
SUPPLEMENTAL
RECONCILIATION OF NON-GAAP DISCLOSURES
|
|
Unaudited
|
|
(Dollars in
thousands, except share data)
|
|
Reconciliation of
Adjusted Net (Loss) Income Attributable to AAC Holdings, Inc.
Common Stockholders to Net (Loss) Income Attributable to AAC
Holdings, Inc. Common Stockholders
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months
Ended
|
|
|
|
June 30,
2019
|
|
|
March 31,
2019
|
|
Net loss attributable
to AAC Holdings, Inc. common stockholders
|
|
$
|
(16,372)
|
|
|
$
|
(22,019)
|
|
Non-GAAP
Adjustments:
|
|
|
|
|
|
|
|
|
Litigation settlement,
regulatory and California matter related expense
|
|
|
66
|
|
|
|
(988)
|
|
Acquisition-related
expense
|
|
|
40
|
|
|
|
28
|
|
Transaction
costs
|
|
|
532
|
|
|
|
1,517
|
|
Recruitment and
retention expense
|
|
|
50
|
|
|
|
375
|
|
Employee severance
expense
|
|
|
185
|
|
|
|
1,098
|
|
Facility closure
operating losses and expense
|
|
|
3,059
|
|
|
|
647
|
|
Income tax effect of
non-GAAP adjustments
|
|
|
—
|
|
|
|
(4)
|
|
Adjusted net (loss)
income attributable to AAC Holdings, Inc. common
stockholders
|
|
$
|
(12,440)
|
|
|
$
|
(19,346)
|
|
Weighted-average
common shares outstanding - diluted
|
|
|
24,741,530
|
|
|
|
24,495,163
|
|
GAAP diluted (loss)
income per common share
|
|
$
|
(0.66)
|
|
|
$
|
(0.90)
|
|
Adjusted (loss)
earnings per diluted common share
|
|
$
|
(0.50)
|
|
|
$
|
(0.79)
|
|
|
Management defines
adjusted net loss attributable to AAC Holdings, Inc. common
stockholders as net loss attributable to AAC Holdings, Inc. common
stockholders adjusted for litigation settlement, certain regulatory
and California matter related expenses, acquisition-related expense
(which includes professional services for accounting, legal,
valuation services and licensing expenses), de novo start-up and
other expenses, recruitment and retention expense, employee
severance expense, facility closure operating losses and 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 attributable to AAC
Holdings, Inc. common stockholders as opposed to net income
attributable to AAC Holdings, Inc. common stockholders.
|
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content:http://www.prnewswire.com/news-releases/aac-holdings-inc-reports-second-quarter-2019-results-300909568.html
SOURCE AAC Holdings, Inc.