AdCare Reports “Record” Q4 Revenues of $45.4 Million, Cites M&A Campaign

AdCare Health Systems, Inc. (NYSE Amex:ADK) reported revenues of $45.4 million in the fourth quarter ended Dec. 31, 2011, up 76% from the previous year’s $25.8 million. The company attributed this increase to its acquisitions completed since the end of 2010 as part of its aggressive merger and acquisition program.

For the full year, AdCare brought in a record $151.4 million in revenue, up 198% from $50.8 million in 2010, again thanks to its M&A campaign.

“Our record 2011 results reflect successful execution on our M&A program, resulting in nearly tripling our revenues over last year and record growth in adjusted EBITDAR from continuing operations,” said Boyd P. Gentry, AdCare’s president and CEO, in a statement. “Our corporate strategy of optimizing skilled nursing results through guiding local facility leadership to increase their post-acute and Medicare census has helped drive this strong performance.”


However, the company reported a net loss of $4.8 million in the fourth quarter, compared to 2010’s net loss of less than $1.2 million, with a total annual net loss of $7.6 million. Of this, $3.1 million was lost through continuing operations in the fourth quarter.

Net loss attributable to AdCare Health Systems and its shareholders in Q4 was $4.5 million, or ($0.37) per basic and diluted common share. At year’s end, the company had a net loss of nearly $6.2 million, or ($0.62) per basic and diluted common share. This net loss reflects acquisition expenses of approximately $0.4 million in the fourth quarter, and acquisition expenses of approximately $1.2 million for the full year.

As part of the company’s strategy to focus on the growth of skilled nursing facilities, AdCare decided in the fourth quarter that it would exit the home health segment of the business, which represented only 1% of total revenues for the company in 2011. It experienced declining results of operations following a net loss of $1.7 million in 2011’s final quarter.


The company plans to continue pursuing an aggressive M&A program, and did so throughout 2011.

“AdCare has put under contract 59 facilities since we began our M&A campaign in the fall of 2009 and 32 since the beginning of 2011,” said Chris Brogdon, AdCare’s chief acquisition officer. “During the quarter, our M&A program expanded operations into the Southwest, established two additional facilities in Arkansas and Ohio, and put five additional facilities under contract in Oklahoma and five in Arkansas. We continue to expect our new facilities and these pending acquisitions to improve our overall EBITDA margin.”

AdCare’s estimated annualized revenue run-rate is expected to exceed $350 million, combining current annualized run-rate with transactions currently in the process of closing. This figure represents an increase of more than 131% over the company’s 2011 revenues, and over 13 times more than its annualized revenue run-rate since the M&A campaign kicked off in the fall of 2009.

“We are currently evaluating several attractive opportunities in the Southern region of the U.S.,” said Brogdon, “with accretive acquisitions and the optimization of our facilities continuing to be our major focus in 2012.”

Click here to view the full earnings report.

Written by Alyssa Gerace

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