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AdCare Health Systems, Inc. Turns Profitable; Reports 2009 First Quarter Earnings Results

SPRINGFIELD, Ohio, May 18 /PRNewswire-FirstCall/ -- AdCare Health Systems, Inc. (NYSE Amex: ADK), an Ohio-based long-term care, home health care and management company, today reported financial results for its first quarter of 2009.

Revenues for the quarter ended March 31st, 2009 were $6,384,889 as compared to $5,992,542 for the same quarter in 2008, an increase of $392,347. The increase was primarily due to improved occupancy at its assisted living communities, an increase in Medicare patients at its nursing homes, and the acquisition of the Lincoln Lodge.

Income from operations for the quarter ended March 31, 2009 was $403,926 as compared to $155,195 for the first quarter ended March 31, 2008, an increase of $248,731. Net income for the quarter ended March 31, 2009 was $95,814 as compared to a net loss of $139,468 for the quarter ended March 31, 2008, an increase of $235,282. Basic and diluted net income per share for the three months ended March 31, 2009 was $0.03 as compared to a net loss per share of $0.02 for the three months ended March 31, 2008, an improvement of $0.05 per share for the quarter.

David A. Tenwick, Chairman of AdCare, stated "I am pleased that the Company has turned profitable and continues to make progress. It is a testament to the strength of our senior management team to have made such considerable financial improvements during this economic downturn." He continued, "AdCare has improved its working capital by $490,000 since year end. The Company's current liabilities are only about $50,000 more than its current assets which is a significant improvement from year end. In addition, EBITDA (earnings before interest, taxes, depreciation and amortization) was $629,234 for the first quarter as compared to $381,889 for the first quarter last year, an increase of $247,345 or 65%."

About AdCare Health Systems, Inc.

AdCare Health Systems, Inc. (NYSE Amex: ADK) develops, owns and manages assisted living facilities, nursing homes and retirement communities and provides home health care services. Prior to becoming a publicly traded company in November of 2006, AdCare operated as a private company for 18 years. AdCare's 900 employees provide high-quality care for patients and residents residing in the 14 facilities that they manage, six of which are assisted living facilities, six skilled nursing centers and two independent senior living communities. The Company has ownership interests in eight of those facilities. In the ever expanding marketplace of long-term care, AdCare's mission is to provide quality healthcare services to the elderly.

Safe Harbor Statement

Statements contained in this press release that are not historical facts may be forward-looking statements within the meaning of federal law. Such forward-looking statements reflect management's beliefs and assumptions and are based on information currently available to management. The forward-looking statements involve known and unknown risks, results, performance or achievements of the Company to differ materially from those expressed or implied in such statements. Such factors are identified in the public filings made by the Company with the Securities and Exchange Commission and include the Company's ability to secure lines of credit and/or an acquisition credit facility, find suitable acquisition properties at favorable terms, changes in the health care industry because of political and economic influences, changes in regulations governing the industry, changes in reimbursement levels including those under the Medicare and Medicaid programs and changes in the competitive marketplace. There can be no assurance that such factors or other factors will not affect the accuracy of such forward-looking statements.

                               CONSOLIDATED BALANCE SHEET

                                               March 31,         December 31,
                                                 2009               2008
                          ASSETS              (Unaudited)
     Current Assets:
     Cash                                      $1,552,019         $1,266,315
     Accounts receivable:
         Long-term care resident
          receivables, net                      1,836,336          2,008,847
         Management, consulting and
          development receivables, net            285,979            258,811
         Advances and receivables from
          affiliates                               23,081             17,635
     Prepaid expenses and other                   516,373            478,534
               Total current assets             4,213,788          4,030,142

     Restricted cash                            1,141,777          1,155,596
     Property and equipment, net               16,622,981         16,772,660
     License, net                               1,189,307          1,189,307
     Goodwill                                   2,679,482          2,679,482
     Other assets                                 922,573          1,012,340
               Total assets                   $26,769,908        $26,839,527

     Current Liabilities:
         Current portion of notes
          payable and other debt                 $725,242           $713,323
         Current portion of notes
          payable to stockholder                    9,432              9,432
         Accounts payable                         836,203          1,009,002
         Accrued expenses                       2,693,637          2,838,407
               Total current liabilities        4,264,513          4,570,164

     Notes payable and other debt,
      net of current portion                   16,824,813         16,974,788
     Notes payable to stockholder,
      net of current portion                       32,594             34,626
     Other liabilities                            549,055            299,314
     Income tax payable                           180,649            170,007
            Total liabilities                  21,851,623         22,048,899

     Stockholders' equity:
         Preferred stock, no par value;
          500,000 shares authorized;
          no shares issued or
          outstanding                                   -                  -
         Common stock and additional
          paid-in capital, no par
          value; 14,500,000 shares
          authorized; 3,786,129
          shares issued and
          outstanding                          14,790,692         14,766,967
         Accumulated deficit                  (10,149,718)       (10,245,532)
            Total stockholders' equity          4,640,974          4,521,435
         Noncontrolling interest in
          subsidiaries                            277,311            269,193
            Total equity                        4,918,285          4,790,628
            Total liabilities and
             stockholders' equity             $26,769,908        $26,839,527


                                          Three Months Ended March 31,
                                              2009              2008
          Patient care revenues           $5,916,835        $5,568,061
          Management, consulting and
           development fee revenue           468,054           424,481
             Total revenue                 6,384,889         5,992,542

          Payroll and related payroll
           costs                           3,737,729         3,587,397
          Other operating expenses         2,017,926         2,023,256
          Depreciation and
           amortization                      225,308           226,694
             Total expenses                5,980,963         5,837,347

      Income from Operations                 403,926           155,195

      Other Income (Expense):
          Interest income                      1,308             9,133
          Interest expense, others          (294,142)         (226,352)
          Interest expense, related
           parties                              (718)          (14,872)
          Other expense                        4,200                 -
                                            (289,352)         (232,092)

      Income (Loss ) Before Income
       Taxes                                 114,574           (76,896)
      Income Tax Expense                     (10,642)          (10,642)
      Net Income (Loss)                      103,932           (87,538)
      Net Income Attributable to
       Noncontrolling Interest                (8,118)          (51,930)
      Net Income (Loss) Attributable
       to AdCare Health Systems, Inc.        $95,814         $(139,468)

      Net Income (Loss) Per Share,
       Basic                                   $0.03            $(0.02)
      Net Income (Loss) Per Share,
       Diluted                                 $0.03            $(0.02)

      Weighted Average Common Shares
          Basic                            3,786,129         3,786,129
          Diluted                          3,815,820         3,786,129


                                                     Common Stock
                                         Accumulated   Paid-in  Noncontrolling
                           Total           Deficit     Capital     Interest
    Balance, December
      31, 2008:          $4,790,628     $(10,245,532) $14,766,967   $269,193

        Warrants issued
         in connection
         with consulting
         agreement           12,567                -       12,567          -
        Stock option
         expense             11,158                -       11,158          -
        Net income           95,814           95,814            -          -
        Net income
         attributable to
         interest             8,118                -            -      8,118
     Balance, March 31,
      2009               $4,918,285     $(10,149,718) $14,790,692   $277,311


                                                Three-Months Ended March 31,
                                                  2009              2008
       Cash flows from operating
             Net Income (Loss)                   $95,814         $(139,468)
             Adjustments to reconcile
              net income (loss) to net
              cash provided by operating
                   Depreciation and
                    amortization                 225,308           226,694
                   Warrants issued for
                    services                      24,742             7,512
                   Stock option
                    compensation expense          11,158             9,576
                   Minority interest               8,118            51,930
                   Note receivable
                    forgiveness exchanged
                    for rent                           -             9,000
                   Changes in certain
                    assets and liabilities:
                      Accounts receivable        139,897          (110,987)
                      Prepaid expenses and
                       other                     (55,028)           24,640
                      Other assets                89,766          (100,614)
                      Accounts payable and
                       accrued expenses         (317,570)            9,343
                      Income tax liability        10,642            10,642
                      Other liabilities          249,741             9,730
             Net cash provided by
              operating activities               482,588             7,998

       Cash flows from investing
                Increase in restricted cash       13,819           230,811
                Purchase of property
                 plant and equipment             (70,615)         (157,373)
             Net cash (used in) provided
              by investing activities            (56,796)           73,438

       Cash flows from financing activities:
                Proceeds from notes payable        2,768                 -
                Repayment of notes
                 payable to stockholder           (2,032)                -
                Prepaid financing costs                -             1,786
                Repayment on notes payable      (140,824)         (123,847)
             Net cash used in financing
              activities                        (140,088)         (122,061)

       Net Increase (Decrease) in Cash           285,704           (40,625)
       Cash, Beginning                         1,266,315           926,625
       Cash, Ending                           $1,552,019          $886,000

       Supplemental Disclosure of Cash
        Flow Information:
             Cash paid during the year
              for interest                      $292,528          $265,760
       Supplemental Disclosure of
        Non-Cash Activities:
             Rent in exchange of note
              receivable repayment                    $-            $9,000

SOURCE AdCare Health Systems, Inc.
Copyright©2009 PR Newswire.
All rights reserved

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