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AdCare Health Systems Reports Third Quarter 2013 Results

           AdCare Health Systems Reports Third Quarter 2013 Results

Company Delivers 13.9% Sequential Increase in Quarterly EBITDAR to $5.4
Million;

Highest EBITDAR in Last Five Quarters

Quarterly Net Loss Narrows Significantly from Year-Ago Period and Sequentially

PR Newswire

ATLANTA, Nov. 14, 2013

ATLANTA, Nov. 14, 2013 /PRNewswire/ --AdCare Health Systems, Inc. (NYSE MKT:
ADK), (NYSE MKT: ADK.PA) a leading long-term care provider, reported results
for the third quarter and nine months ended September 30, 2013.

Financial Highlights

  oRevenues up 5% to $55.9 million from $53.2 million in the year-ago period
  oAdjusted EBITDAR from continuing operations was $5.4 million (see "Use of
    Non-GAAP Financial Information," below for more information)
  oAdCare's financial results included a non-cash derivative gain of $2.0
    million compared to a non-cash derivative loss of $2.1 millionin the
    third quarter last year (see, "About the Derivative Liability," below for
    more information)
  oBoard of Directors declared a quarterly cash preferred dividend payment of
    $0.68 per share on the Company's 10.875% Series A Cumulative Redeemable
    Preferred Stock which was paid on September 30, 2013 to holders of record
    at the close of business on September 20, 2013
  oSubsequent to the quarter end, completed a public offering of 500,000
    shares of its 10.875% Series A Cumulative Redeemable Preferred Stock;
    $11.2 million net proceeds to be used for general corporate purposes;
    completed offering eliminates embedded derivative from financial
    statements

"The third quarter is our seasonally slowest quarter and yet we delivered
solid revenue growth from the year ago period for both the third quarter and
the first nine months of 2013," said AdCare's president and chief executive
officer, Boyd P. Gentry. "Our EBITDAR continues to demonstrate the progress we
are making and this quarter we generated the highest EBITDA and EBITDAR in
five quarters - since Q2 of 2012. We have more than doubled Adjusted EBITDAR
since Q4 of 2012; adjusted EBITDAR from continuing operations reached $5.4
million compared to $2.5 million for the fourth quarter of 2012. We narrowed
our quarterly net loss attributable to AdCare Health stockholders
significantly to $0.5 million from $4.5 million in the prior year period and
sequentially from $7.0 million. We are on track to reduce our expense run-rate
by nearly $1 million annually, primarily from new fixed-price contracts for
certain expenses as well as eliminating some redundancy at the corporate
level." 

Mr. Gentry added, "Profitability improved sequentially even though revenues
decreased slightly due to the seasonality mentioned above. Additionally, we
are laying the groundwork for an enhanced sales and marketing strategy that
should begin to yield higher skilled mix in 2014. These anticipated
improvements in census and mix, when combined with our continued careful
expense control which are gaining traction should drive solid financial
improvements in the coming quarters. We believe this progress will become even
more evident as the non-recurring costs related to the Audit Committee review
and inquiry and the restatement process dissipate. Audit committee
investigation expenses decreased by more than $0.5 million sequentially from
Q2 to Q3. We are encouraged by the progress we have made and look forward to
continued profitable growth."

Q3 and Nine Month 2013 Summary of Financial Results
Revenues in the third quarter of 2013 were $55.9 million, up 5% from $53.2
million in the same year-ago quarter. Revenue for the first nine months of
2013 increased by 18.5% to $168.5 million from $142.2 million in 2012.

Inclusive of a $302,000 charge related to the Audit Committee's review and the
Company's restatement process, and a non-cash derivative gain of $2.0 million,
net loss attributable to AdCare common stockholders in the third quarter of
2013 totaled $0.5 million or $(0.03) per basic and diluted share. This
compares to a net loss of $4.5 million, or $(0.31) per basic and diluted
share, in the same year-ago quarter, which included a non-cash derivative loss
of $2.1 million. For the first nine months of 2013, the net loss attributable
to AdCare common stockholders was $10.4 million or $(0.70) per basic and
diluted share, versus a net loss of $7.0 million or $(0.50) per basic and
diluted share in 2012.

"Quarterly cost of services declined to 82.5% of revenues in the third quarter
of 2013 compared to 83.6% of revenues in the prior year quarter and also
declined sequentially from 84.2% of revenues in the second quarter of 2013 due
to successful facility optimization efforts," commented Ronald Fleming, AdCare
Health's chief financial officer. "In addition, after the end of October, 2013
the non-cash derivative liability no longer impacts our financial statements
so going forward we will be able to present results that no longer reflect
this quarterly non-cash line item."

Adjusted EBITDAR from continuing operations in the third quarter of 2013
totaled $5.4 million, up 6.3% compared to $5.0 million in the third quarter of
2012 and up 13.9% sequentially compared to the $4.7 million in the second
quarter of 2013. Adjusted EBITDAR from continuing operations for the first
nine months of 2013 totaled $14.0 million compared to $14.9 million for the
first nine months of 2012 (see "Use of Non-GAAP Financial Information," below
for the definition of Adjusted EBITDA from continuing operations and Adjusted
EBITDAR from continuing operations, each, non-GAAP financial measures, as well
as an important discussion about the use of these measures and their
reconciliation to GAAP net loss, the most directly comparable GAAP financial
measure).

Cash and cash equivalents at September 30, 2013 totaled $12.7 million, as
compared to $15.9 million at December 31, 2012.

Q3 2013 Total Facility Count
At the end of the third quarter of 2013, the Company, through its
subsidiaries, operated or managed 47 facilities comprised of 43 skilled
nursing centers, three assisted living residences and one independent
living/senior housing facility, with a total of 4,781 beds/units in service.
Of these 47 facilities, 26 are owned, nine are leased, 11 are managed for
third parties and one is a consolidated variable interest entity. The
facilities are located in Alabama, Arkansas, Georgia, Missouri, North
Carolina, Ohio, Oklahoma and South Carolina.

Conference Call and Webcast
AdCare will hold a conference call to discuss its third quarter 2013 financial
results later today, Thursday, November 14, 2013 at 4:30 p.m. Eastern time.
Management will host the presentation, followed by a question and answer
period.

  oDate and time: Thursday, November 14, 2013 at 4:30 p.m. ET
  oDial-in number: 1-877-941-2069 (domestic) or 1-480-629-9713
    (international)
  oReplay number: Dial 1-877-870-5176 (domestic) or 1-858-384-5517
    (international). Please use passcode 4649187 to access the replay. The
    replay will be available until December 14, 2013.
  oWebcast link: www.adcarehealth.com or
    http://public.viavid.com/index.php?id=106804.

About the Derivative Liability
The derivative liability is the result of the Company issuing subordinated
convertible promissory notes in 2010 that include an anti-dilution provision
referred to as a "ratchet" provision. The derivative liability is a non-cash
item. The notes are convertible into shares of common stock of the Company at
a current conversion price of $3.73 that is subject to future reductions if
the Company issues equity instruments at a lower price (the "ratchet"
provision). Because there is no minimum conversion price, an indeterminate
number of shares may be issued in the future. Accordingly, the Company
determined an embedded derivative existed that was required to be bifurcated
from the subordinated convertible promissory notes and accounted for
separately as a derivative liability recorded at fair value. Pursuant to GAAP,
the Company estimates the fair value of the derivative liability using the
Black-Scholes Merton option-pricing model with changes in fair value being
reported in the condensed consolidated statement of operations.

These notes , which had an original maturity date of October 26, 2013, were
extended to August 29, 2014 and the anti-dilution provision was eliminated so
there will not be a derivative gain or loss recorded after Q4 13. At
maturity, the Company will be required to redeem the notes for cash (unless
they are earlier converted into common stock at the option of the holder). If
the notes are converted, to common stock, the debt will be extinguished, the
current fair market value of the common stock will be reflected as common
stock and additional paid-in capital, and there may be a resulting gain or
loss on the debt extinguishment.

About AdCare Health Systems
AdCare Health Systems, Inc. (NYSE MKT: ADK) (NYSE MKT:ADK.PA) is a recognized
provider of senior living and health care facility management. AdCare owns and
manages, long-term care facilities and retirement communities, and since the
Company's inception in 1988, its mission has been to provide the highest
quality of healthcare services to the elderly through its operating
subsidiaries, including a broad range of skilled nursing and sub-acute care
services. For more information about AdCare, visit www.adcarehealth.com.

Important Cautions Regarding Forward-Looking Statements
Statements contained in this press release that are not historical facts may
be forward-looking statements within the meaning of federal law. Such
statements can be identified by the use of forward-looking terminology, such
as "believes," "expects," "plans," "intends," "anticipates" and variations of
such words or similar expressions, but their absence does not mean that the
statement is not forward-looking. Statements in this announcement that are
forward-looking include, but are not limited to: (i) statements regarding
drivers of operational growth; (ii) statements regarding expense reductions
and expense run-rate; (iii) statements regarding improvements in the
admissions process; (iv) statements regarding financial and operational
improvements; and (v) statements regarding the Company's current plans to
issue equity instruments. Such forward-looking statements reflect management's
beliefs and assumptions and are based upon information currently available to
management and involve known and unknown risks, results, performance or
achievements of AdCare, which may differ materially from those expressed or
implied in such statements. Such factors are identified in the public filings
made by AdCare with the Securities and Exchange Commission and include, among
others, AdCare's ability to secure lines of credit and/or an acquisition
credit facility, AdCare's ability to refinance its current debt on more
favorable terms, AdCare's ability to expand its borrowing arrangement with
certain existing lenders, AdCare's ability to raise equity capital, AdCare's
ability to improve operating results, changes in the health care industry
because of political and economic influences, changes in regulations governing
the health care industry, changes in reimbursement levels including those
under the Medicare and Medicaid programs and changes in the competitive
marketplace. There is no assurance that such factors or other factors will not
affect the accuracy of such forward-looking statements. Except where required
by law, AdCare undertakes no obligation to revise or update any
forward-looking statements to reflect events or circumstances after the date
of this press release.

In addition, each facility mentioned in this press release is operated by a
separate, wholly owned, independent operating subsidiary that has its own
management, employees and assets.

References to the consolidated Company and its assets and activities, as well
as the use of terms such as "we," "us," "our," and similar verbiage, is not
meant to imply that AdCare Health Systems, Inc. has direct operating assets,
employees or revenue or that any of the facilities, the home health business
or other related businesses are operated by the same entity.

Use of Non-GAAP Financial Information
Beginning with the reporting of results for the first quarter of 2011, the
Company began to report the measures of Adjusted EBITDA from continuing
operations and Adjusted EBITDAR from continuing operations. These are measures
of operating performance that are not calculated in accordance with U.S.
generally accepted accounting principles ("GAAP"). The Company defines: (i)
"Adjusted EBITDA from continuing operations " as net income (loss) from
continuing operations before interest expense, income tax expense;
depreciation and amortization (including amortization of non-cash stock-based
compensation), acquisition costs (net of gains), loss on extinguishment of
debt, derivative loss or gain and other non-routine adjustments; and (ii)
"Adjusted EBITDAR from continuing operations" as net income (loss) from
continuing operations before interest expense; income tax expense,
depreciation and amortization (including amortization of non-cash stock-based
compensation), acquisition costs (net of gains), loss on extinguishment of
debt, derivative loss and other non-routine adjustments.

Adjusted EBITDA from continuing operations and Adjusted EBITDAR from
continuing operations should not be considered in isolation or as a substitute
for net income, income from operations or cash flows provided by, or used in,
operations as determined in accordance with GAAP. Adjusted EBITDA from
continuing operations and Adjusted EBITDAR from continuing operations are used
by management to focus on operating performance and management without mixing
in items of income and expense that relate to the financing and capitalization
of the business, fixed rent or lease payments of facilities, derivative loss
or gain, and certain acquisition related charges and other non-routine
adjustments.

The Company believes these measures are useful to investors in evaluating the
Company's performance, results of operations and financial position for the
following reasons:

  oThey are helpful in identifying trends in the Company's day-to-day
    performance because the items excluded have little or no significance to
    the Company's day-to-day operations;
  oThey provide an assessment of controllable expenses and afford management
    the ability to make decisions which are expected to facilitate meeting
    current financial goals as well as achieve optimal financial performance;
    and
  oThey provide data that assists management to determine whether or not
    adjustments to current spending decisions are needed.

AdCare believes that the use of the measures provides a meaningful and
consistent comparison of the Company's underlying business between periods by
eliminating certain items required by GAAP, which have little or no
significance in the Company's day-to-day operations.



ADCARE HEALTH SYSTEMS, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(Amounts in 000's, except per share data)
(Unaudited)
                             Three Months Ended    Nine Months Ended September
                             September 30,         30,
                               2013       2012        2013           2012
Revenues:
  Patient care revenues      $ 55,344   $ 52,633   $  166,986     $  140,522
  Management revenues          521        588         1,529          1,637
      Total revenues           55,865     53,221      168,515        142,159
Expenses:
  Cost of services
  (exclusive of facility
  rent, depreciation
      and amortization)        46,102     44,475      141,219        115,645
  General and                  4,583      3,957       14,017         12,204
  administrative expense
  Audit committee              302        -           2,284          -
  investigation expense
  Facility rent expense        1,761      1,775       5,256          5,278
  Depreciation and             1,888      1,760       5,558          4,730
  amortization
  Salary retirement and        5          38          154            38
  continuation costs
   Total expenses          54,641     52,005      168,488        137,895
Income from Operations         1,224      1,216       27             4,264
Other Income (Expense):
  Interest expense, net        (3,462)    (3,695)     (10,253)       (9,475)
  Acquisition costs, net of    (33)       (342)       (607)          (1,160)
  gains
  Derivative gain (loss)       1,989      (2,105)     2,178          (1,342)
  (Loss) gain on               (6)        500         (33)           500
  extinguishment of debt
  (Loss) gain on disposal      (6)        -           (10)           2
  of assets
  Other income (expense)       15         (229)       15             (258)
      Total other expense,    (1,503)    (5,871)     (8,710)        (11,733)
      net
Loss from Continuing
Operations Before Income       (279)      (4,655)     (8,683)        (7,469)
Taxes
Income tax benefit             54         (111)       (24)           (132)
(expense)
Loss from Continuing           (225)      (4,766)     (8,707)        (7,601)
Operations
(Loss) Income from
Discontinued Operations,       (188)      126         (1,402)        203
Net of Tax
Net Loss                       (413)      (4,640)     (10,109)       (7,398)
Net Loss Attributable to       195        134         629            420
Noncontrolling Interests
Net Loss Attributable to       (218)      (4,506)     (9,480)        (6,978)
AdCare Health Systems, Inc.
Preferred stock dividend       (306)      -           (918)          -
Net Loss Attributable to
AdCare Health Systems, Inc.  $ (524)    $ (4,506)  $  (10,398)    $  (6,978)
Common Stockholders
Net (loss) income per Common
Share attributable to AdCare
Health Systems, Inc.
Common Stockholders -
  Basic:
  Continuing Operations      $ (0.02)   $ (0.32)   $  (0.61)      $  (0.51)
  Discontinued Operations      (0.01)     0.01        (0.09)         0.01
                             $ (0.03)   $ (0.31)   $  (0.70)      $  (0.50)
Net (loss) income per Common
Share attributable to AdCare
Health Systems, Inc.
Common Stockholders -
  Diluted:
  Continuing Operations      $ (0.02)   $ (0.32)   $  (0.61)      $  (0.51)
  Discontinued Operations      (0.01)     0.01        (0.09)         0.01
                             $ (0.03)   $ (0.31)   $  (0.70)      $  (0.50)
Weighted Average Common
Shares Outstanding:
  Basic                        14,962     14,498      14,805         13,825
  Diluted                      14,962     14,498      14,805         13,825





ADCARE HEALTH SYSTEMS, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(Amounts in 000's)
                                            September 30,     December 31,
                                            2013              2012
                                            (Unaudited)
ASSETS
Current assets:
 Cash and cash equivalents                  $     12,724  $     15,937
 Restricted cash and investments            3,473             1,742
 Accounts receivable, net of allowance of   24,305            26,037
 $5,372 and $3,729
 Prepaid expenses and other                 1,519             489
 Assets of disposal group held for sale     400               6,159
    Total current assets                    42,421            50,364
Restricted cash and investments             11,361            7,215
Property and equipment, net                 149,676           151,064
Intangible assets - bed licenses            2,471             2,471
Intangible assets - lease rights, net       5,446             6,844
Goodwill                                    5,023             5,023
Lease deposits                              1,694             1,720
Deferred loan costs, net                    4,877             6,137
Other assets                                22                3,611
    Total assets                            $    222,991   $    234,449
LIABILITIES AND EQUITY
Current liabilities:
 Current portion of notes payable and other $     21,634  $     
 debt                                                         6,941
 Revolving credit facilities and lines of   3,111             1,498
 credit
 Current portion of convertible debt, net   13,803            10,948
 of discount
 Accounts payable                           23,054            19,503
 Accrued expenses                           13,799            13,730
 Liabilities of disposal group held for     93                3,662
 sale
    Total current liabilities               75,494            56,282
Notes payable and other debt, net of
current portion:
 Senior debt                                101,316           112,160
 Bonds, net of discounts                    12,940            16,088
 Revolving credit facilities                6,167             7,706
 Convertible debt                           7,500             12,009
 Other debt                                 231               864
Derivative liability                        929               3,630
Other liabilities                           1,516             1,394
Deferred tax liability                      77                104
    Total liabilities                       206,170           210,237
Commitments and contingency
Preferred stock, no par value; 1,000 shares
authorized; 450 shares
 issued and outstanding                     9,159             9,159
Stockholders' equity:
 Common stock and additional paid-in
 capital, no par value; 29,000
    shares authorized; 15,319 and 14,659    45,280            41,644
    issued and outstanding
 Accumulated deficit                        (36,151)          (25,753)
    Total stockholders' equity              9,129             15,891
 Noncontrolling interest in subsidiaries    (1,467)           (838)
    Total equity                            7,662             15,053
    Total liabilities and equity            $    222,991   $    234,449





ADCARE HEALTH SYSTEMS, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
TRAILING SIX QUARTERS
(Amounts in 000's)
(Unaudited)
               For Three Months Ended
               6/30/2012  9/30/2012  12/31/2012  3/31/2013  6/30/2013  9/30/2013
Revenues:
 Patient care $46,390    $52,633    $53,031     $55,719    $55,923    $55,344
revenues
 Management   525        588        519         510        498        521
revenue
Total         46,915     53,221     53,550      56,229     56,421     55,865
revenues
Expenses:
 Cost of
services
(exclusive of
facility rent, 36,476     44,475     46,556      47,622     47,495     46,102
depreciation
and
amortization)
 General and
administrative 4,295      3,957      4,800       4,928      4,505      4,583
expense
 Audit
committee      -          -          -           1,134      848        302
investigation
expense
 Facility     1,745      1,775      1,790       1,737      1,758      1,761
rent expense
 Depreciation
and            1,426      1,760      1,973       1,803      1,867      1,888
amortization
 Salary
retirement and -          38         5           -          149        5
continuation
costs
 Total        43,942     52,004     55,125      57,224     56,622     54,641
expenses
Income (Loss)
from           2,973      1,217      (1,575)     (995)      (201)      1,224
Operations
Other Income
(Expense):
 Interest     (3,280)    (3,695)    (3,749)     (3,436)    (3,355)    (3,462)
expense, net
 Acquisition
costs, net of  (524)      (342)      (802)       (97)       (477)      (33)
gains
 Derivative   352        (2,105)    (399)       2,136      (1,947)    1,989
gain (loss)
 Gain (loss)
on             -          500        -           (2)        (25)       (6)
extinguishment
of debt
 Loss on
disposal of    -          -          -           -          (4)        (6)
assets
 Other
(expense)      (13)       (229)      134         -          -          15
income
Total other    (3,465)    (5,871)    (4,816)     (1,399)    (5,808)    (1,503)
expense, net
Loss from
Continuing
Operations
Before Income
Taxes
Before Income  (492)      (4,655)    (6,392)     (2,394)    (6,009)    (279)
Taxes
Income tax
benefit        (18)       (111)      35          (78)       -          54
(expense)
Loss from
Continuing     (510)      (4,766)    (6,357)     (2,472)    (6,009)    (225)
Operations
Income (Loss)
from
Discontinued   163        126        6,213       (278)      (936)      (188)
Operations,
Net of Tax
Net Loss       (347)      (4,640)    (144)       (2,750)    (6,945)    (413)
Net Loss
Attributable
to             142        134        236         192        241        195
Noncontrolling
Interest
Net (Loss)
Income
Attributable   ($205)     ($4,506)   $92         ($2,558)   ($6,704)   ($218)
to AdCare
Health
Systems, Inc.
Preferred      -          -          (156)       (306)      (306)      (306)
stock dividend
Net Loss
Attributable
to AdCare
Health         ($205)     ($4,506)   ($64)       ($2,864)   ($7,010)   ($524)
Systems, Inc.
Common
Stockholders





ADCARE HEALTH SYSTEMS, INC. AND SUBSIDIARIES
RECONCILIATION OF NET LOSS TO ADJUSTED EBITDA FROM CONTINUING
OPERATIONS AND ADJUSTED EBITDAR FROM CONTINUING OPERATIONS
(Amounts in 000's)
(Unaudited)
               For Three Months Ended
               6/30/2012  9/30/2012  12/31/2012  3/31/2013  6/30/2013  9/30/2013
Net Loss       ($347)     ($4,640)   ($144)      ($2,750)   ($6,945)   ($413)
 Impact of
discontinued   (163)      (126)      (6,213)     278        936        188
operations
Net Loss from
continuing     (510)      (4,766)    (6,357)     (2,472)    (6,009)    (225)
operations
 Interest     3,280      3,695      3,749       3,436      3,355      3,462
expense, net
 Income tax
expense        18         111        (35)        78         -          (54)
(benefit)
 Amortization
of stock based 182        269        356         260        291        186
compensation
 Depreciation
and            1,426      1,760      1,973       1,803      1,867      1,888
amortization
 Acquisition
costs, net of  524        342        802         97         477        33
gains
 (Gain) loss
on             -          (500)      -           2          25         6
extinguishment
of debt
 Derivative   (352)      2,105      399         (2,136)    1,947      (1,989)
(gain) loss
 Loss on
disposal of    -          -          -           -          4          6
assets
 Audit
committee      -          -          -           1,134      848        302
investigation
expense
 Other
expense        -          218        (134)       -          -          (15)
(income)
 Salary
retirement and -          38         5           -          149        5
continuation
costs
Adjusted
EBITDA from    4,568      3,272      758         2,202      2,954      3,605
continuing
operations
 Facility     1,745      1,775      1,790       1,737      1,758      1,761
rent expense
Adjusted
EBITDAR from   $6,313     $5,047     $2,548      $3,939     $4,712     $5,366
continuing
operations





ADCARE HEALTH SYSTEMS, INC. AND SUBSIDIARIES
SUPPLEMENTARY SCHEDULES
(Unaudited)
            2012                                     2013
End of      Q1    Q2    Q3    9 Mo.   Q4    Q1    Q2      Q3    9 Mo.
Period Data                         YTD                                     YTD
Number of
Facilities
SNF
 Owned    17      18      21      21       24      24      24      24      24
 Leased   9       9       9       9        9       9       9       9       9
 VIE      -       -       -       -        -       -       -       -       -
 Managed  10      10      10      10       10      10      10      10      10
ALF
 Owned    2       2       2       2        2       2       2       2       2
 VIE      1       1       1       1        1       1       1       1       1
 Managed  -       -       -       -        -       -       -       -       -
IL
 Managed  1       1       1       1        1       1       1       1       1
Total       40      41      44      44       47      47      47      47      47
Number of
Operational
Beds
SNF
 Owned    1,870   1,947   2,311   2,311    2,579   2,579   2,579   2,579   2,579
 Leased   1,090   1,090   1,090   1,090    1,090   1,090   1,090   1,090   1,090
 VIE      -       -       -       -        -       -       -       -       -
 Managed  813     813     813     813      813     813     813     813     813
ALF
 Owned    112     112     112     112      112     112     112     112     112
 VIE      104     104     104     104      104     104     104     104     104
 Managed  -       -       -       -        -       -       -       -       -
IL
 Managed  83      83      83      83       83      83      83      83      83
Total       4,072   4,149   4,513   4,513    4,781   4,781   4,781   4,781   4,781
SNF + ALF % 65.7%   66.5%   69.9%   69.9%    71.9%   71.9%   71.9%   71.9%   71.9%
Owned
SNF + ALF % 34.3%   33.5%   30.1%   30.1%    28.1%   28.1%   28.1%   28.1%   28.1%
Leased
Revenue Mix
% (b)
 Skilled  31.1%   30.0%   26.7%   29.1%    30.5%   32.3%   31.5%   28.8%   30.9%
(c)
 Medicaid 52.8%   53.6%   56.5%   54.5%    53.0%   51.7%   52.9%   53.4%   52.6%
 Private  16.1%   16.5%   16.7%   16.5%    16.6%   16.0%   15.7%   17.8%   16.5%
+ Other
Total       100.0%  100.0%  100.0%  100.0%   100.0%  100.0%  100.0%  100.0%  100.0%
Patient
Days (b)
 Skilled  29,814  31,601  32,169  93,584   37,150  40,794  40,360  35,828  116,982
(c)
 Medicaid 140,265 154,704 177,601 472,570  173,813 178,768 185,292 188,268 552,328
 Private  36,272  39,529  45,313  121,114  45,933  46,806  45,353  48,698  140,857
+ Other
Total       206,351 225,834 255,083 687,268  256,896 266,368 271,005 272,794 810,167
Patient Day
Mix % (a)
 Skilled  15.5%   14.9%   13.4%   14.5%    15.3%   16.2%   15.7%   13.8%   15.2%
(c)
 Medicaid 71.9%   72.3%   73.2%   72.5%    71.1%   70.3%   71.5%   72.0%   71.3%
 Private  12.6%   12.8%   13.4%   13.0%    13.6%   13.5%   12.8%   14.1%   13.5%
+ Other
Total       100.0%  100.0%  100.0%  100.0%   100.0%  100.0%  100.0%  100.0%  100.0%
Revenue
Rates Per
Patient Day
(a)
 Skilled  $432.82 $439.89 $437.38 $436.77  $434.83 $441.70 $436.07 $444.92 $440.75
(c)
 Medicaid $157.12 $161.35 $168.17 $162.67  $162.11 $161.59 $160.18 $157.66 $159.78
 Private  $174.23 $172.33 $167.69 $171.09  $174.73 $176.48 $175.86 $176.17 $176.17
+ Other
Weighted
Average     $210.09 $213.88 $214.26 $212.89  $214.10 $216.58 $213.46 $209.61 $213.19
Total
Average
Daily
Census (b)
 Skilled  379     353     356     390      434     453     444     389     429
(c)
 Medicaid 1,785   1,727   1,963   1,969    2,029   1,986   2,033   2,046   2,023
 Private  462     441     501     505      536     520     501     529     516
+ Other
Total
Average     2,627   2,522   2,820   2,864    2,999   2,960   2,978   2,965   2,968
Daily
Census
Occupancy   82.7%   77.5%   78.0%   79.2%    77.2%   76.2%   76.7%   76.3%   76.4%
(b)
(in '000)
Total       $42,023 $46,915 $53,221 $142,159 $53,550 $56,229 $56,421 $55,865 $168,515
Revenue (b)
Adjusted    $3,552  $6,313  $5,047  $14,912  $2,548  $3,939  $4,712  $5,366  $14,017
EBITDAR (b)
Adjusted    $1,793  $4,568  $3,272  $9,633   $758    $2,202  $2,954  $3,605  $8,761
EBITDA (b)
(a) Skilled Nursing Only - Excludes Managed Facilities
(b) AdCare Consolidated incorporating Discontinued Operations for all period presented
(c) Skilled is defined as Medicare A + Managed Care RUGS



SOURCE AdCare Health Systems, Inc.

Website: http://www.adcarehealth.com
Contact: Company, Boyd Gentry, CEO, AdCare Health Systems, Inc., Tel (678)
869-5116, info@adcarehealth.com, or Investor Relations, Brett Maas, Managing
Partner, Hayden IR, Tel (646) 536-7331, brett@haydenir.com