AAC Holdings, Inc. (OTC: AACH) (“the Company” or “AAC”) announced
financial results for the third quarter and nine months ended
September 30, 2019, as well as updated 2019 guidance.
Third Quarter 2019 Operational and Financial
Highlights:(All comparisons are to second quarter
ended June 30, 2019, unless otherwise noted)
- New admissions improved to 4,844 from 4,830
- Operating expenses decreased by 12% to $61.1 million
- Net loss attributable to AAC Holdings, Inc. common stockholders
decreased 20% to $(13.1) million, or $(0.52) per diluted common
share from $(16.4) million, or $(0.66) per diluted share.
- Adjusted EBITDA improved by 92% to $5.5 million compared to
$2.9 million (see non-GAAP reconciliation herein).
“For the third consecutive quarter, we continue to see positive
momentum in 2019,” said Michael Cartwright, AAC Chairman &
Chief Executive Officer. “The expense savings initiatives
implemented in late 2018 and in 2019 are continuing to have a
positive impact. Operating expenses have decreased by 27% or $22
million, for the third quarter of 2019 compared to the third
quarter of 2018 representing just under $100 million in annualized
savings.”
Cartwright added, “We are pleased with the recent addition of
three independent board members who bring extensive expertise to
the Company and we are pleased to have recently reached a mutual
agreement with our senior secured lenders that provided the company
with $5 million of additional liquidity and gives the Company
through March 31, 2020 to right-size our balance sheet and reduce
our cost of capital.”
Appointment of New Independent Board
Members
The Company appointed three new independent Board members during
the quarter. The new members include LOC Distribution CEO Bob
Nash, Vogel Partners Managing Member Scott D. Vogel and TML
Corporate Strategies President T. Michael Logan. The new
members join AAC CEO Michael Cartwright, Vaco Holdings CEO Jerry
Bostelman, and Burch Investment Group CEO Lucius Burch on the
board.
Agreement with Senior Secured Lenders
The Company reached an agreement on October 30, 2019 with its
senior secured lenders that provided the Company with an additional
$5 million of liquidity and a forbearance agreement through March
31, 2020 regarding certain events of default.
Third Quarter 2019 Financial Results
On a sequential basis total revenue decreased by $3.9, or 6% in
the third quarter of 2019. Revenue during the third quarter of 2019
was negatively impacted by additional reserves recorded against
outstanding accounts receivable related to closed facilities and
other changes in estimates which totaled approximately $1.6
million. The remaining decrease was due to lower average daily
census and average daily inpatient revenue. Average daily inpatient
census decreased by approximately 1% and average daily inpatient
revenue decreased by 11%. The decrease in average daily inpatient
revenue was primarily related to a decline in payor mix. Average
daily inpatient revenue compared to the third quarter of 2018 was
materially consistent.
Operating expenses on a sequential basis decreased by
approximately 12% to $61.1 million for the third quarter of 2019
compared to the second 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 decreased 27% or $22.4 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 $58.9 million for the third quarter of 2019
compared with $62.7 million for the second quarter of 2019.
|
Three Months Ended,September 30,
2019 |
|
Three Months Ended,June 30,
2019 |
|
|
Increase/(Decrease) |
|
|
% Change |
|
Inpatient treatment facility services |
$ |
51,264 |
|
$ |
57,690 |
|
|
$ |
(6,426 |
) |
|
|
(11.1 |
) |
Outpatient facility and sober
living services |
|
5,343 |
|
|
5,407 |
|
|
|
(64 |
) |
|
|
(1.2 |
) |
Client related diagnostic
services |
|
1,558 |
|
|
(2,502 |
) |
|
|
4,060 |
|
|
|
162.3 |
|
Total client related
revenue |
|
58,165 |
|
|
60,595 |
|
|
|
(2,430 |
) |
|
|
(4.0 |
) |
Non-client related
revenue |
|
690 |
|
|
2,129 |
|
|
|
(1,439 |
) |
|
|
(67.6 |
) |
Total revenues |
$ |
58,855 |
|
$ |
62,724 |
|
|
$ |
(3,869 |
) |
|
|
(6.2 |
) |
Inpatient treatment facility services revenue decreased 11.1% to
$51.3 million for the three months ended September 30, 2019,
compared with $57.7 million for the three months ended June 30,
2019.
Outpatient facility and sober living services revenue decreased
1.2% to $5.3 million for the three months ended September 30, 2019,
compared with $5.4 million for the three months ended June 30,
2019.
Client related diagnostic services revenue increased 162.3% to
$1.6 million for the three months ended September 30, 2019,
compared with $(2.5) million for the three months ended June 30,
2019.
Non-client related revenue decreased 67.6% to $0.7 million for
the three months ended September 30, 2019, compared with $2.1
million for the three months ended June 30, 2019.
Net loss attributable to AAC Holdings, Inc. common stockholders
was $(13.1) million, or $(0.52) per diluted common share for the
three months ended September 30, 2019, compared with net loss
attributable to AAC Holdings, Inc. common stockholders of $(16.4)
million, or $(0.66) per diluted common share for the three months
ended June 30, 2019.
Adjusted EBITDA increased to $5.5 million for the three months
ended September 30, 2019, compared with $2.9 million for the three
months ended June 30, 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 September 30, 2019, AAC’s balance sheet reflected cash and
cash equivalents of $1.5 million, accounts receivable of $52.2
million, net property and equipment of $158.5 million and total
debt of $345.1 million (current and long-term portions).
Cash flows used in operations totaled $4 thousand for the third
quarter of 2019 compared to $13.5 million for the second quarter of
2019.
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 |
$230 - $240 |
Inpatient treatment facility revenue |
$205 - $210 |
Outpatient and sober living facility revenue |
$20 - $22 |
Client related diagnostic services revenue |
$2 - $3 |
Non-client related revenue |
$3 - $5 |
|
|
Adjusted EBITDA |
$6 - $8 |
Adjusted Earnings per Diluted
Common Share |
$(2.15) - $(2.10) |
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 Tuesday, November 12, 2019, at 9:00 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 November 21, 2019,
by dialing 877-344-7529 and entering the replay access code,
1013610.
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 meet the covenants in the Company’s loan
documents or lack of borrowing capacity; (ii) the Company’s
inability to successfully raise capital to meet the Company’s
liquidity needs and to allow it to continue to operate as a going
concern; (iii) the Company’s inability to effectively operate its
facilities; (iv) the Company’s reliance on its sales and marketing
program to continuously attract and enroll clients; (v) a reduction
in reimbursement rates by certain third-party payors for inpatient
and outpatient services and point-of-care and definitive lab
testing; (vi) the Company’s failure to successfully achieve growth
through acquisitions and de novo projects; (vii) risks associated
with estimates of the value of accounts receivable or deterioration
in collectability of accounts receivable; (viii) a failure to
achieve anticipated financial results from contemplated and prior
acquisitions; (ix) the possibility that a governmental entity may
prohibit, delay or refuse to grant approval for the consummation of
an acquisition; (x) the Company’s failure to achieve anticipated
financial results from contemplated and prior acquisitions; (xi) a
disruption in the Company’s ability to perform diagnostic
laboratory services; (xii) maintaining compliance with applicable
regulatory authorities, licensure and permits to operate the
Company’s facilities and laboratories; (xiii) potential adverse
affects on our ability to raise financing through the sale of
equity securities due to delisting from the NYSE; (xiv) 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; ; and (xv) general
economic and market conditions, including conditions in the debt
and equity capital markets in particular, 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 September 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 |
|
|
September 30, 2019 |
|
|
June 30,2019 |
|
Revenues |
|
|
|
|
|
|
|
Client related revenue |
$ |
58,165 |
|
|
$ |
60,595 |
|
Non-client related revenue |
|
690 |
|
|
|
2,129 |
|
Total revenues |
|
58,855 |
|
|
|
62,724 |
|
|
|
|
|
|
|
|
|
Operating expenses |
|
|
|
|
|
|
|
Salaries, wages and benefits |
|
36,273 |
|
|
|
38,928 |
|
Client related services |
|
6,103 |
|
|
|
5,975 |
|
Advertising and marketing |
|
1,621 |
|
|
|
2,725 |
|
Professional fees |
|
4,517 |
|
|
|
5,557 |
|
Other operating expenses |
|
9,163 |
|
|
|
10,260 |
|
Rentals and leases |
|
2,011 |
|
|
|
2,094 |
|
Litigation settlements |
|
(2,083 |
) |
|
|
— |
|
Depreciation and amortization |
|
3,507 |
|
|
|
3,572 |
|
Total operating expenses |
|
61,112 |
|
|
|
69,111 |
|
Loss from operations |
|
(2,257 |
) |
|
|
(6,387 |
) |
Interest expense, net |
|
14,273 |
|
|
|
12,582 |
|
Other income, net |
|
(771 |
) |
|
|
(232 |
) |
Loss before income tax benefit |
|
(15,759 |
) |
|
|
(18,737 |
) |
Income tax expense (benefit) |
|
299 |
|
|
|
323 |
|
Net loss |
|
(16,058 |
) |
|
|
(19,060 |
) |
Less: net loss attributable to noncontrolling interest |
|
2,985 |
|
|
|
2,688 |
|
Net loss attributable to AAC Holdings, Inc. common
stockholders |
$ |
(13,073 |
) |
|
$ |
(16,372 |
) |
|
|
|
|
|
|
|
|
Basic (loss) earnings per common share |
$ |
(0.52 |
) |
|
$ |
(0.66 |
) |
Diluted (loss) earnings per common share |
$ |
(0.52 |
) |
|
$ |
(0.66 |
) |
Weighted-average common shares outstanding: |
|
|
|
|
|
|
|
Basic |
|
24,938,894 |
|
|
|
24,741,530 |
|
Diluted |
|
24,938,894 |
|
|
|
24,741,530 |
|
AAC
HOLDINGS, INC. |
|
CONDENSED
CONSOLIDATED BALANCE SHEETS |
|
Unaudited |
|
(Dollars in
thousands) |
|
|
|
September 30 |
|
|
December 31 |
|
|
2019 |
|
|
2018 |
|
Assets |
|
|
|
|
|
|
|
Current assets |
|
|
|
|
|
|
|
Cash and cash equivalents |
$ |
1,521 |
|
|
$ |
5,409 |
|
Accounts receivable, net of allowances |
|
52,153 |
|
|
|
47,860 |
|
Prepaid expenses and other current assets |
|
5,167 |
|
|
|
10,695 |
|
Total current assets |
|
58,841 |
|
|
|
63,964 |
|
Property and equipment, net |
|
158,467 |
|
|
|
166,921 |
|
Right-of-use assets, net |
|
27,186 |
|
|
|
— |
|
Goodwill |
|
198,952 |
|
|
|
198,952 |
|
Intangible assets, net |
|
9,933 |
|
|
|
12,063 |
|
Other assets |
|
10,975 |
|
|
|
10,377 |
|
Total assets |
$ |
464,354 |
|
|
$ |
452,277 |
|
|
|
|
|
|
|
|
|
Liabilities and Stockholders’
Equity |
|
|
|
|
|
|
|
Current liabilities |
|
|
|
|
|
|
|
Accounts payable |
$ |
24,270 |
|
|
$ |
13,507 |
|
Accrued and other current liabilities |
|
40,771 |
|
|
|
30,423 |
|
Accrued litigation |
|
3,416 |
|
|
|
8,000 |
|
Current portion of lease liability |
|
4,921 |
|
|
|
— |
|
Current portion of long-term debt |
|
338,014 |
|
|
|
309,394 |
|
Current portion of financing lease obligation |
|
24,457 |
|
|
|
121 |
|
Total current liabilities |
|
435,849 |
|
|
|
361,445 |
|
Deferred tax liabilities |
|
1,643 |
|
|
|
1,227 |
|
Long-term debt, net of current portion and debt issuance
costs |
|
7,134 |
|
|
|
9,764 |
|
Lease liability, net of current portion |
|
27,393 |
|
|
|
— |
|
Financing lease obligation, net of current portion |
|
— |
|
|
|
24,421 |
|
Other long-term liabilities |
|
7,737 |
|
|
|
13,147 |
|
Total liabilities |
|
479,756 |
|
|
|
410,004 |
|
|
|
|
|
|
|
|
|
Stockholders’ equity |
|
14,508 |
|
|
|
64,413 |
|
Noncontrolling interest |
|
(29,910 |
) |
|
|
(22,140 |
) |
Total stockholders’ equity including noncontrolling
interest |
|
(15,402 |
) |
|
|
42,273 |
|
Total liabilities and
stockholders’
equity |
$ |
464,354 |
|
|
$ |
452,277 |
|
AAC
HOLDINGS, INC. |
|
CONDENSED
CONSOLIDATED STATEMENTS OF CASH FLOWS |
|
Unaudited |
|
(Dollars in
thousands) |
|
|
|
|
|
|
|
|
|
|
Three Months Ended |
|
|
September 30, 2019 |
|
|
June 30,2019 |
|
Cash flows used in operating activities: |
|
|
|
|
|
|
|
Net loss |
$ |
(16,058 |
) |
|
$ |
(19,060 |
) |
Adjustments to reconcile net loss to net cash used in operating
activities: |
|
|
|
|
|
|
|
Depreciation and amortization |
|
3,507 |
|
|
|
3,572 |
|
Equity compensation |
|
115 |
|
|
|
850 |
|
Loss on disposal of property and equipment |
|
7 |
|
|
|
465 |
|
Amortization of debt issuance costs |
|
1,056 |
|
|
|
728 |
|
Deferred income taxes |
|
241 |
|
|
|
265 |
|
Changes in operating assets and liabilities: |
|
|
|
|
|
|
|
Accounts receivable |
|
(3,406 |
) |
|
|
(3,063 |
) |
Prepaid expenses and other assets |
|
(2,076 |
) |
|
|
1,701 |
|
Accounts payable |
|
6,526 |
|
|
|
577 |
|
Accrued and other current liabilities |
|
11,561 |
|
|
|
3,040 |
|
Accrued litigation |
|
(77 |
) |
|
|
(1,334 |
) |
Other long-term liabilities |
|
(1,400 |
) |
|
|
(1,227 |
) |
Net cash used in operating activities |
|
(4 |
) |
|
|
(13,486 |
) |
Cash flows used in investing activities: |
|
|
|
|
|
|
|
Purchase of property and equipment |
|
(652 |
) |
|
|
(1,075 |
) |
Net cash used in investing activities |
|
(652 |
) |
|
|
(1,075 |
) |
Cash flows (used in) provided by financing
activities: |
|
|
|
|
|
|
|
Payments on 2017 Credit Facility |
|
— |
|
|
|
(1,724 |
) |
Proceeds from 2019 Priming Facility, net of deferred financing
costs |
|
— |
|
|
|
260 |
|
Proceeds from 2017 Credit Facility, net of deferred financing
costs |
|
— |
|
|
|
1,211 |
|
Payments on finance leases and other |
|
(154 |
) |
|
|
(224 |
) |
Payments on AdCare Note |
|
(250 |
) |
|
|
(250 |
) |
Net cash (used in) provided by financing activities |
|
(404 |
) |
|
|
(727 |
) |
Net change in cash and cash equivalents |
|
(1,060 |
) |
|
|
(15,288 |
) |
Cash and cash equivalents, beginning of period |
|
2,581 |
|
|
|
17,869 |
|
Cash and cash equivalents, end
of period |
$ |
1,521 |
|
|
$ |
2,581 |
|
AAC HOLDINGS, INC. |
|
OPERATING METRICS |
|
Unaudited |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three MonthsEnded |
|
|
Nine and Six MonthsEnded |
|
|
September 30, 2019 |
|
|
June 30,2019 |
|
|
September 30, 2019 |
|
|
June 30,2019 |
|
Operating Metrics: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
New admissions1 |
|
4,844 |
|
|
|
4,830 |
|
|
|
14,315 |
|
|
|
9,471 |
|
Average daily inpatient census2 |
|
791 |
|
|
|
802 |
|
|
|
778 |
|
|
|
771 |
|
Average daily sober living census3 |
|
185 |
|
|
|
185 |
|
|
|
194 |
|
|
|
199 |
|
Total average daily census |
|
976 |
|
|
|
987 |
|
|
|
972 |
|
|
|
970 |
|
Average episode length (days)4 |
|
19 |
|
|
|
19 |
|
|
|
19 |
|
|
|
19 |
|
Average daily inpatient revenue5 |
$ |
704 |
|
|
$ |
790 |
|
|
$ |
724 |
|
|
$ |
735 |
|
Revenue per admission6 |
$ |
12,008 |
|
|
$ |
12,546 |
|
|
$ |
12,033 |
|
|
$ |
12,046 |
|
Outpatient visits7 |
|
35,500 |
|
|
|
37,903 |
|
|
|
113,120 |
|
|
|
77,620 |
|
Revenue per outpatient visit8 |
$ |
151 |
|
|
$ |
143 |
|
|
$ |
152 |
|
|
$ |
153 |
|
Client related diagnostic services9 |
|
3 |
% |
|
|
(4 |
%) |
|
|
1 |
% |
|
|
0 |
% |
Inpatient bed count at end of period10 |
|
996 |
|
|
|
996 |
|
|
|
996 |
|
|
|
996 |
|
Effective inpatient bed count at end of period11 |
|
992 |
|
|
|
992 |
|
|
|
992 |
|
|
|
992 |
|
Average effective inpatient bed utilization12 |
|
80 |
% |
|
|
81 |
% |
|
|
78 |
% |
|
|
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 |
|
|
September 30, 2019 |
|
|
June 30,2019 |
|
Net loss
attributable to AAC Holdings, Inc. common stockholders |
$ |
(13,073 |
) |
|
$ |
(16,372 |
) |
Non-GAAP Adjustments1: |
|
|
|
|
|
|
|
Interest expense |
|
14,273 |
|
|
|
12,582 |
|
Depreciation and amortization |
|
3,507 |
|
|
|
3,572 |
|
Income tax benefit |
|
299 |
|
|
|
323 |
|
Net loss attributable to noncontrolling interest |
|
(2,985 |
) |
|
|
(2,688 |
) |
Stock-based compensation and other |
|
485 |
|
|
|
1,539 |
|
Litigation settlements, regulatory and California matter related
expense |
|
(1,799 |
) |
|
|
66 |
|
Acquisition-related expense |
|
77 |
|
|
|
40 |
|
Transaction costs |
|
2,071 |
|
|
|
532 |
|
Recruitment and retention expense |
|
298 |
|
|
|
50 |
|
Employee severance expense |
|
45 |
|
|
|
185 |
|
Change in accounting estimate |
|
560 |
|
|
|
— |
|
Facility closure operating losses and expense |
|
1,783 |
|
|
|
3,059 |
|
Adjusted EBITDA |
$ |
5,541 |
|
|
$ |
2,888 |
|
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 |
|
|
September 30, 2019 |
|
|
June 30,2019 |
|
Net loss attributable to AAC Holdings, Inc. common
stockholders |
$ |
(13,073 |
) |
|
$ |
(16,372 |
) |
Non-GAAP Adjustments: |
|
|
|
|
|
|
|
Litigation settlements, regulatory and California matter related
expense |
|
(1,799 |
) |
|
|
66 |
|
Acquisition-related expense |
|
77 |
|
|
|
40 |
|
Transaction costs |
|
2,071 |
|
|
|
532 |
|
Recruitment and retention expense |
|
298 |
|
|
|
50 |
|
Employee severance expense |
|
45 |
|
|
|
185 |
|
Change in accounting estimate |
|
560 |
|
|
|
— |
|
Facility closure operating losses and expense |
|
1,783 |
|
|
|
3,059 |
|
Adjusted net (loss) income attributable to AAC Holdings, Inc.
common stockholders |
$ |
(10,038 |
) |
|
$ |
(12,440 |
) |
Weighted-average common shares outstanding - diluted |
|
24,938,894 |
|
|
|
24,741,530 |
|
GAAP diluted (loss) income per common share |
$ |
(0.52 |
) |
|
$ |
(0.66 |
) |
Adjusted (loss) earnings per diluted common share |
$ |
(0.40 |
) |
|
$ |
(0.50 |
) |
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.
Investor Contact: |
Andrew McWilliams |
Media
Contact: |
Joy Sutton |
|
(615) 732-1385 |
|
(615) 587-7728 |
|
IR@contactAAC.com |
|
Mediarequest@contactAAC.com |
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