AdCare Health Systems Reports Second Quarter 2016 Results
ATLANTA– AdCare Health Systems, Inc. (NYSE MKT: ADK) (NYSE MKT: ADK.PRA), a self-managed healthcare real estate investment company that invests primarily in real estate purposed for senior living and long-term care, today reported results for the three months and six months ended June 30, 2016.
•Entered into a Purchase and Sale Agreement with affiliates of Skyline Healthcare LLC for the sale of the Company's nine Arkansas facilities for $55.0 million, of which $52.0 million shall be paid in cash and $3.0 million shall be paid by promissory note. Completion of the sale is expected to occur on or before August 31, 2016, and is subject to customary termination provisions and closing conditions. If the sale is completed, net proceeds from the sale after the repayment of related mortgage indebtedness are expected to be approximately $25.0 million (including the $3.0 million promissory note).
•Entered into a master sublease for three of the Company's Georgia facilities with affiliates of Peach Health Group LLC ("Peach Health"). ◦Transferred the operations of the Company's Savannah Beach facility located in Georgia from an affiliate of New Beginnings Care, LLC to Peach Health.
◦Recertification efforts for Oceanside and Jeffersonville facilities are progressing.
•Completed the sale of all non-core assets, including three office buildings and a parcel of excess land for $1.4 million in aggregate.
•Strategic review by the Board of Directors, with the assistance of its financial advisor, is ongoing.
"In the second quarter, we continued to improve the value of our real estate portfolio, reduced our general and administrative expenses and strengthened our balance sheet to increase our financial flexibility," commented Bill McBride, AdCare's Chairman and Chief Executive Officer. "We completed the sale of all assets we identified as non-core. If completed, the sale of our nine Arkansas facilities, which is expected to close during the third quarter, will enable increased management focus on our remaining core operations."
"We continue to evaluate strategic alternatives with the assistance of our financial advisor, while working to enhance our portfolio to maximize shareholder value," continued Mr. McBride. "In the context of the Board's review of strategic alternatives, the Board will consider its options for the redeployment of the net proceeds from the sale of the Arkansas properties, if completed."