ý | QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
o | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
Georgia | 31-1332119 | |
(State or other jurisdiction of incorporation) | (I.R.S. Employer Identification Number) |
Large accelerated filer o | Accelerated filer o | |
Non-accelerated filer o | Smaller reporting company x | |
(Do not check if a smaller reporting company) |
Page Number | ||
March 31, 2016 | December 31, 2015 | |||||||
(Unaudited) | ||||||||
ASSETS | ||||||||
Current assets: | ||||||||
Cash and cash equivalents | $ | 2,264 | $ | 2,720 | ||||
Restricted cash | 5,403 | 9,169 | ||||||
Accounts receivable, net of allowance of $11,276 and $12,487 | 8,558 | 8,805 | ||||||
Prepaid expenses and other | 3,425 | 3,214 | ||||||
Assets of disposal group held for sale | 1,237 | 1,249 | ||||||
Total current assets | 20,887 | 25,157 | ||||||
Restricted cash and investments | 3,485 | 3,558 | ||||||
Property and equipment, net | 124,835 | 126,676 | ||||||
Intangible assets - bed licenses | 2,471 | 2,471 | ||||||
Intangible assets - lease rights, net | 3,254 | 3,420 | ||||||
Goodwill | 4,183 | 4,183 | ||||||
Lease deposits | 1,414 | 1,812 | ||||||
Other assets | 2,714 | 1,996 | ||||||
Total assets | $ | 163,243 | $ | 169,273 | ||||
LIABILITIES AND DEFICIT | ||||||||
Current liabilities: | ||||||||
Current portion of notes payable and other debt | $ | 46,919 | $ | 50,960 | ||||
Accounts payable | 7,046 | 8,741 | ||||||
Accrued expenses | 2,327 | 3,125 | ||||||
Liabilities of disposal group held for sale | 949 | 958 | ||||||
Total current liabilities | 57,241 | 63,784 | ||||||
Notes payable and other debt, net of current portion: | ||||||||
Senior debt, net | 54,479 | 54,742 | ||||||
Bonds, net | 6,618 | 6,600 | ||||||
Convertible debt, net | 9,010 | 8,968 | ||||||
Other debt, net | 413 | 531 | ||||||
Other liabilities | 4,096 | 3,380 | ||||||
Deferred tax liability | 389 | 389 | ||||||
Total liabilities | 132,246 | 138,394 | ||||||
Commitments and contingencies (Note 14) | ||||||||
Preferred stock, no par value; 5,000 shares authorized; 2,614 and 2,427 shares issued and outstanding, redemption amount $65,346 and $60,273 at March 31, 2016 and December 31, 2015, respectively | 58,391 | 54,714 | ||||||
Stockholders’ equity: | ||||||||
Common stock and additional paid-in capital, no par value; 55,000 shares authorized; 19,907 and 19,861 issued and outstanding at March 31, 2016 and December 31, 2015, respectively | 61,126 | 60,958 | ||||||
Accumulated deficit | (88,520 | ) | (84,793 | ) | ||||
Total stockholders’ deficit | (27,394 | ) | (23,835 | ) | ||||
Total liabilities and stockholders' deficit | $ | 163,243 | $ | 169,273 |
Three Months Ended March 31, | ||||||||
2016 | 2015 | |||||||
Revenues: | ||||||||
Rental revenues | $ | 6,849 | $ | 1,340 | ||||
Management fee and other revenues | 233 | 218 | ||||||
Total revenues | 7,082 | 1,558 | ||||||
Expenses: | ||||||||
General and administrative expense | 2,542 | 3,331 | ||||||
Facility rent expense | 2,179 | 487 | ||||||
Depreciation and amortization | 1,713 | 1,675 | ||||||
Other expenses | 203 | 102 | ||||||
Total expenses | 6,637 | 5,595 | ||||||
Income (loss) from operations | 445 | (4,037 | ) | |||||
Other expense: | ||||||||
Interest expense, net | 1,825 | 2,490 | ||||||
Loss on extinguishment of debt | — | 680 | ||||||
Other expense | 42 | 288 | ||||||
Total other expense, net | 1,867 | 3,458 | ||||||
Loss from continuing operations before income taxes | (1,422 | ) | (7,495 | ) | ||||
Income tax expense | — | 20 | ||||||
Loss from continuing operations | (1,422 | ) | (7,515 | ) | ||||
Income (loss) from discontinued operations, net of tax | (528 | ) | 2,266 | |||||
Net loss | (1,950 | ) | (5,249 | ) | ||||
Net loss attributable to noncontrolling interests | — | 230 | ||||||
Net loss attributable to AdCare Health Systems, Inc. | (1,950 | ) | (5,019 | ) | ||||
Preferred stock dividends | (1,777 | ) | (646 | ) | ||||
Net loss attributable to AdCare Health Systems, Inc. Common Stockholders | $ | (3,727 | ) | $ | (5,665 | ) | ||
Net loss (income) per share of common stock attributable to AdCare Health Systems, Inc. | ||||||||
Basic and diluted: | ||||||||
Continuing operations | $ | (0.16 | ) | $ | (0.42 | ) | ||
Discontinued operations | (0.03 | ) | 0.13 | |||||
$ | (0.19 | ) | $ | (0.29 | ) | |||
Weighted average shares of common stock outstanding: | ||||||||
Basic and diluted | 19,885 | 19,218 |
Shares of Common Stock | Common Stock and Additional Paid-in Capital | Accumulated Deficit | Total | ||||||||||||
Balances, December 31, 2015 | 19,861 | $ | 60,958 | $ | (84,793 | ) | $ | (23,835 | ) | ||||||
Stock-based compensation | — | 480 | — | 480 | |||||||||||
Common stock repurchase program | (150 | ) | (312 | ) | — | (312 | ) | ||||||||
Issuance of restricted stock | 196 | — | — | — | |||||||||||
Preferred stock dividends | — | — | (1,777 | ) | (1,777 | ) | |||||||||
Net loss | — | — | (1,950 | ) | (1,950 | ) | |||||||||
Balances, March 31, 2016 | 19,907 | $ | 61,126 | $ | (88,520 | ) | $ | (27,394 | ) |
Three Months Ended March 31, | ||||||||
2016 | 2015 | |||||||
Cash flows from operating activities: | ||||||||
Net loss | $ | (1,950 | ) | $ | (5,249 | ) | ||
(Income) loss from discontinued operations, net of tax | 528 | (2,266 | ) | |||||
Loss from continuing operations | (1,422 | ) | (7,515 | ) | ||||
Adjustments to reconcile net loss from continuing operations to net cash provided by (used in) operating activities: | ||||||||
Depreciation and amortization | 1,713 | 1,675 | ||||||
Stock-based compensation expense | 480 | 202 | ||||||
Rent expense in excess of cash paid | 203 | 43 | ||||||
Rent revenue in excess of cash received | (718 | ) | (29 | ) | ||||
Amortization of deferred financing costs | 216 | 350 | ||||||
Amortization of debt discounts and premiums | 4 | 4 | ||||||
Loss on debt extinguishment | — | 680 | ||||||
Changes in operating assets and liabilities: | ||||||||
Accounts receivable | (1,219 | ) | 140 | |||||
Prepaid expenses and other | (242 | ) | (751 | ) | ||||
Other assets | 17 | 40 | ||||||
Accounts payable and accrued expenses | (590 | ) | (177 | ) | ||||
Other liabilities | 617 | 90 | ||||||
Net cash used in operating activities - continuing operations | (941 | ) | (5,248 | ) | ||||
Net cash (used in) provided by operating activities - discontinued operations | (639 | ) | 4,645 | |||||
Net cash used in operating activities | (1,580 | ) | (603 | ) | ||||
Cash flows from investing activities: | ||||||||
Change in restricted cash | 3,839 | 705 | ||||||
Proceeds from the sale of property and equipment | 325 | — | ||||||
Purchase of property and equipment | (19 | ) | (374 | ) | ||||
Net cash provided by investing activities - continuing operations | 4,145 | 331 | ||||||
Net cash used in investing activities - discontinued operations | (1 | ) | (44 | ) | ||||
Net cash provided by investing activities | 4,144 | 287 | ||||||
Cash flows from financing activities: | ||||||||
Proceeds from debt | 203 | 21,714 | ||||||
Proceeds from convertible debt | — | 1,685 | ||||||
Repayment of notes payable | (4,518 | ) | (21,892 | ) | ||||
Proceeds from lines of credit | — | 13,693 | ||||||
Repayment of lines of credit | — | (15,454 | ) | |||||
Debt issuance costs | (25 | ) | (511 | ) | ||||
Exercise of warrants and options | — | 1,688 | ||||||
Proceeds from preferred stock issuances, net | 3,677 | — | ||||||
Repurchase of common stock | (312 | ) | — | |||||
Dividends paid on preferred stock | (1,777 | ) | (646 | ) | ||||
Net cash (used in) provided by financing activities - continuing operations | (2,752 | ) | 277 | |||||
Net cash used in financing activities - discontinued operations | (268 | ) | (16 | ) | ||||
Net cash (used in) provided by financing activities | (3,020 | ) | 261 | |||||
Net change in cash and cash equivalents | (456 | ) | (55 | ) | ||||
Cash and cash equivalents, beginning | 2,720 | 10,735 | ||||||
Cash and cash equivalents, ending | $ | 2,264 | $ | 10,680 | ||||
Supplemental disclosure of cash flow information: | ||||||||
Cash paid during the year for: | ||||||||
Interest | $ | 1,630 | $ | 2,407 |
Income taxes | $ | — | $ | 20 | ||||
Supplemental disclosure of non-cash activities: | ||||||||
Notes issued in conjunction with financing of exit fees | $ | — | $ | 680 |
Three Months Ended March 31, | ||||||||||||||||||||||
2016 | 2015 | |||||||||||||||||||||
(Amounts in 000’s, except per share data) | Income (loss) | Shares | Per Share | Income (loss) | Shares | Per Share | ||||||||||||||||
Continuing operations: | ||||||||||||||||||||||
Loss from continuing operations | $ | (1,422 | ) | $ | (7,515 | ) | ||||||||||||||||
Preferred stock dividends | (1,777 | ) | (646 | ) | ||||||||||||||||||
Basic loss from continuing operations | $ | (3,199 | ) | 19,885 | $ | (0.16 | ) | $ | (8,161 | ) | 19,218 | $ | (0.42 | ) | ||||||||
Diluted loss from continuing operations(a) | $ | (3,199 | ) | 19,885 | $ | (0.16 | ) | $ | (8,161 | ) | 19,218 | $ | (0.42 | ) | ||||||||
Discontinued operations: | ||||||||||||||||||||||
(Loss) income from discontinued operations | $ | (528 | ) | $ | 2,266 | |||||||||||||||||
Net loss attributable to noncontrolling interests | — | 230 | ||||||||||||||||||||
Basic (loss) income from discontinued operations attributable to the Company | $ | (528 | ) | 19,885 | $ | (0.03 | ) | $ | 2,496 | 19,218 | $ | 0.13 | ||||||||||
Diluted (loss) income from discontinued operations attributable to the Company(a) | $ | (528 | ) | 19,885 | $ | (0.03 | ) | $ | 2,496 | 19,218 | $ | 0.13 | ||||||||||
Net loss attributable to AdCare: | ||||||||||||||||||||||
Basic loss | $ | (3,727 | ) | 19,885 | $ | (0.19 | ) | $ | (5,665 | ) | 19,218 | $ | (0.29 | ) | ||||||||
Diluted loss(a) | $ | (3,727 | ) | 19,885 | $ | (0.19 | ) | $ | (5,665 | ) | 19,218 | $ | (0.29 | ) |
March 31, | ||||||
(Share amounts in 000’s) | 2016 | 2015 | ||||
Stock options | 373 | 894 | ||||
Warrants | 2,051 | 2,266 | ||||
Subordinated convertible notes | 2,165 | 3,804 | ||||
Total anti-dilutive securities | 4,589 | 6,964 |
(Amounts in 000’s) | March 31, 2016 | December 31, 2015 | ||||||
Cash collateral and certificates of deposit, current | $ | 3,823 | $ | 7,687 | ||||
Current replacement reserves | 1,036 | 950 | ||||||
Escrow deposits | 544 | 532 | ||||||
Total current portion | 5,403 | 9,169 | ||||||
Restricted investments for other debt obligations | 1,940 | 2,264 | ||||||
HUD replacement reserves | 1,167 | 1,174 | ||||||
Reserves for capital improvements | 378 | 120 | ||||||
Total noncurrent portion | 3,485 | 3,558 | ||||||
Total restricted cash | $ | 8,888 | $ | 12,727 |
(Amounts in 000’s) | Estimated Useful Lives (Years) | March 31, 2016 | December 31, 2015 | |||||||
Buildings and improvements | 5-40 | $ | 129,062 | $ | 128,912 | |||||
Equipment | 2-10 | 13,484 | 13,470 | |||||||
Land | — | 6,810 | 7,128 | |||||||
Computer related | 2-10 | 3,000 | 2,999 | |||||||
Construction in process | — | 186 | 390 | |||||||
152,542 | 152,899 | |||||||||
Less: accumulated depreciation and amortization | (27,707 | ) | (26,223 | ) | ||||||
Property and equipment, net | $ | 124,835 | $ | 126,676 |
(Amounts in 000’s) | CON (included in property and equipment) | Bed Licenses - Separable | Lease Rights | Total | ||||||||||||
Balances, December 31, 2015 | ||||||||||||||||
Gross | $ | 35,690 | $ | 2,471 | $ | 6,881 | $ | 45,042 | ||||||||
Accumulated amortization | (4,760 | ) | — | (3,461 | ) | (8,221 | ) | |||||||||
Net carrying amount | $ | 30,930 | $ | 2,471 | $ | 3,420 | $ | 36,821 | ||||||||
Amortization expense | (293 | ) | — | (167 | ) | (460 | ) | |||||||||
Balances, March 31, 2016 | ||||||||||||||||
Gross | 35,690 | 2,471 | 6,881 | 45,042 | ||||||||||||
Accumulated amortization | (5,053 | ) | — | (3,628 | ) | (8,681 | ) | |||||||||
Net carrying amount | $ | 30,637 | $ | 2,471 | $ | 3,253 | $ | 36,361 |
(Amounts in 000’s) | Bed Licenses | Lease Rights | ||||||
2016(a) | $ | 880 | $ | 500 | ||||
2017 | 1,173 | 667 | ||||||
2018 | 1,173 | 667 | ||||||
2019 | 1,173 | 667 | ||||||
2020 | 1,173 | 482 | ||||||
Thereafter | 25,065 | 270 | ||||||
Total expected amortization expense | $ | 30,637 | $ | 3,253 |
(Amounts in 000’s) | March 31, 2016 | December 31, 2015 | ||||||
Goodwill | $ | 5,023 | $ | 5,023 | ||||
Accumulated impairment losses | (840 | ) | (840 | ) | ||||
Net carrying amount | $ | 4,183 | $ | 4,183 |
(Amounts in 000's) | ||||
2016(a) | $ | 6,006 | ||
2017 | 8,158 | |||
2018 | 8,340 | |||
2019 | 8,526 | |||
2020 | 8,697 | |||
Thereafter | 55,320 | |||
Total | $ | 95,047 |
(Amounts in 000's) | ||||
2016(a) | $ | 19,725 | ||
2017 | 26,845 | |||
2018 | 27,474 | |||
2019 | 28,082 | |||
2020 | 27,634 | |||
Thereafter | 204,913 | |||
Total | $ | 334,673 |
(Amounts in 000’s) | March 31, 2016 | December 31, 2015 | ||||||
Payroll related | $ | 395 | $ | 684 | ||||
Employee benefits | 306 | 648 | ||||||
Real estate and other taxes | 295 | 411 | ||||||
Self-insured reserve | 248 | 221 | ||||||
Accrued interest | 474 | 484 | ||||||
Other accrued expenses | 609 | 677 | ||||||
Total accrued expenses | $ | 2,327 | $ | 3,125 |
Amounts in (000's) | March 31, 2016 | December 31, 2015 | ||||||
Senior debt—guaranteed by HUD | $ | 25,323 | $ | 25,469 | ||||
Senior debt—guaranteed by USDA | 26,286 | 26,463 | ||||||
Senior debt—guaranteed by SBA | 3,508 | 3,548 | ||||||
Senior debt—bonds, net of discount | 7,028 | 7,025 | ||||||
Senior debt—other mortgage indebtedness | 46,985 | 51,128 | ||||||
Other debt | 2,562 | 2,638 | ||||||
Convertible debt | 9,200 | 9,200 | ||||||
Deferred financing costs | $ | (2,504 | ) | $ | (2,712 | ) | ||
Total debt | $ | 118,388 | $ | 122,759 | ||||
Current debt | 46,919 | 50,960 | ||||||
Debt included in liabilities of disposal group held for sale | 949 | 958 | ||||||
Notes payable and other debt, net of current portion | $ | 70,520 | $ | 70,841 |
(a) | United States ("U.S.") Department of Housing and Urban Development ("HUD"), U.S. Department of Agriculture("USDA"), U.S. Small Business Administration ("SBA"). |
Amounts in (000's) | March 31, | December 31, | |||||||||||||||
Facility | Lender | Maturity | Interest Rate (a) | 2016 | 2015 | ||||||||||||
Senior debt - guaranteed by HUD | |||||||||||||||||
The Pavilion Care Center | Red Mortgage | 12/01/2027 | Fixed | 4.16% | $ | 1,510 | $ | 1,534 | |||||||||
Hearth and Care of Greenfield | Red Mortgage | 08/01/2038 | Fixed | 4.20% | 2,236 | 2,251 | |||||||||||
Woodland Manor | Heartland Bank | 10/01/2044 | Fixed | 3.75% | 5,529 | 5,556 | |||||||||||
Glenvue | Heartland Bank | 10/01/2044 | Fixed | 3.75% | 8,585 | 8,628 | |||||||||||
Autumn Breeze | KeyBank | 01/01/2045 | Fixed | 3.65% | 7,463 | 7,500 | |||||||||||
Total | $ | 25,323 | $ | 25,469 | |||||||||||||
Senior debt - guaranteed by USDA | |||||||||||||||||
Attalla | Metro City | 09/30/2035 | Prime + 1.50% | 5.50% | $ | 7,348 | $ | 7,400 | |||||||||
Coosa | Metro City | 09/30/2035 | Prime + 1.50% | 5.50% | 6,625 | 6,671 | |||||||||||
Mountain Trace | Community B&T | 01/24/2036 | Prime + 1.75% | 5.75% | 4,476 | 4,507 | |||||||||||
Southland | Bank of Atlanta | 07/27/2036 | Prime + 1.50% | 6.00% | 4,548 | 4,576 | |||||||||||
Homestead | Square 1 | 10/14/2036 | Prime + 1.00% | 5.75% | 3,289 | 3,309 | |||||||||||
Total | $ | 26,286 | $ | 26,463 | |||||||||||||
Senior debt - guaranteed by SBA | |||||||||||||||||
College Park | CDC | 10/01/2031 | Fixed | 2.81% | $ | 1,676 | $ | 1,697 | |||||||||
Stone County | CDC | 07/01/2032 | Fixed | 2.42% | 1,109 | 1,123 | |||||||||||
Southland | Bank of Atlanta | 07/27/2036 | Prime + 2.25% | 5.75% | 723 | 728 | |||||||||||
Total | $ | 3,508 | $ | 3,548 |
(a) | Represents cash interest rates as of March 31, 2016 as adjusted for applicable interest rate floor limitations within the lender agreements. The rates exclude amortization of deferred financing costs which range from 0.08% to 1.92% per annum. |
Amounts in (000's) | March 31, | December 31, | |||||||||||||||
Facility | Lender | Maturity | Interest Rate (a) | 2016 | 2015 | ||||||||||||
Senior debt - bonds, net of discount | |||||||||||||||||
Eaglewood Bonds Series A | City of Springfield, Ohio | 05/01/2042 | Fixed | 7.65% | $ | 6,449 | $ | 6,449 | |||||||||
Eaglewood Bonds Series B | City of Springfield, Ohio | 05/01/2021 | Fixed | 8.50% | 579 | 576 | |||||||||||
Total | $ | 7,028 | $ | 7,025 |
(a) | Represents cash interest rates as of March 31, 2016 as adjusted for applicable interest rate floor limitations within the lender agreements. The rates exclude amortization of deferred financing costs which range from 0.08% to 1.92% per annum. |
Amounts in (000's) | March 31, | December 31, | ||||||||||||
Facility | Lender | Maturity | Interest Rate (a) | 2016 | 2015 | |||||||||
Senior debt - other mortgage indebtedness | ||||||||||||||
Sumter Valley (c) | Private Bank (d) | 09/01/2016 | LIBOR + 4.25% | 4.63% | $ | 5,098 | $ | 5,123 | ||||||
Georgetown (c) | Private Bank (d) | 09/01/2016 | LIBOR + 4.25% | 4.63% | 4,006 | 4,026 | ||||||||
Northridge (b) | Private Bank (d) | 09/01/2016 | LIBOR + 4.25% | 5.50% | 3,667 | 4,230 | ||||||||
Woodland Hills (b) | Private Bank (d) | 09/01/2016 | LIBOR + 4.25% | 5.50% | 3,083 | 3,557 | ||||||||
Abington/Cumberland (b) | Private Bank (d) | 09/01/2016 | LIBOR + 4.25% | 5.50% | 3,493 | 4,029 | ||||||||
Heritage Park (b) | Private Bank (d) | 09/01/2016 | LIBOR + 3.50% | 6.00% | 2,886 | 3,370 | ||||||||
River Valley (b) | Private Bank (d) | 09/01/2016 | LIBOR + 3.50% | 6.00% | 3,505 | 3,989 | ||||||||
Quail Creek (e) | Congressional Bank | 09/27/2016 | LIBOR + 4.75% | 5.75% | 5,000 | 5,000 | ||||||||
Little Rock/West Markham (b) | Private Bank (d) | 12/31/2016 | LIBOR + 4.00% | 6.00% | 9,901 | 11,399 | ||||||||
Northwest | First Commercial | 12/31/2017 | Prime | 5.00% | 1,268 | 1,285 | ||||||||
Stone County | Metro City | 06/08/2022 | Prime + 2.25% | 6.25% | 1,688 | 1,697 | ||||||||
College Park | Bank of Las Vegas | 05/01/2031 | Prime + 2.00% | 6.25% | 2,441 | 2,465 | ||||||||
Hembree Rd. Building | Fidelity Bank | 12/01/2017 | Fixed | 5.50% | 949 | 958 | ||||||||
Total | $ | 46,985 | $ | 51,128 |
(a) | Represents cash interest rates as of March 31, 2016 as adjusted for applicable interest rate floor limitations within the lender agreements. The rates exclude amortization of deferred financing costs which range from 0.08% to 1.92% per annum. |
(b) | On March 24, 2016, the Company received a commitment from a lender to refinance the Bentonville, Heritage Park and River Valley Credit Facility (under which only two facilities remain financed upon the sale of the Bentonville facility in 2015), the Little Rock Credit Facility, and the Northridge, Woodland Hills and Abington Credit Facility for a combined total of $25.4 million of debt subject to definitive documentation and certain closing conditions. |
(c) | On March 24, 2016, the Company obtained a lender commitment to extend the maturity date of the Georgetown and Sumter Credit Facility from September 2016 to June 2017 subject to definitive documentation and certain closing conditions. |
(d) | On March 24, 2016, the Company obtained the release of approximately $3.9 million of restricted cash funds and applied the amounts as additional principal payments related to certain of the above debt facilities with Private Bank. |
(e) | On March 29, 2016, the Company obtained a lender commitment to extend the maturity date of the Quail Creek Credit facility from September 2016 to September 2018 subject to definitive documentation and certain closing conditions. |
Amounts in (000's) | ||||||||||||||
Lender | Maturity | Interest Rate (a) | March 31, 2016 | December 31, 2015 | ||||||||||
Other debt | ||||||||||||||
First Insurance Funding | 02/29/2017 | Fixed | 3.99% | $ | 206 | $ | 14 | |||||||
Key Bank | 08/25/2016 | Fixed | — | 680 | 680 | |||||||||
Reliant Rehabilitation | 11/15/2016 | Fixed | 7.00% | 758 | 944 | |||||||||
Pharmacy Care of Arkansas | 02/08/2018 | Fixed | 2.00% | 918 | 1,000 | |||||||||
Total | $ | 2,562 | $ | 2,638 |
(a) | Represents cash interest rates as of March 31, 2016 in accordance with the lender agreements. The rates exclude amortization of deferred financing costs which range from 0.08% to 1.92% per annum. |
Amounts in (000's) | |||||||||||||||
Facility | Maturity | Interest Rate (a) | March 31, 2016 | December 31, 2015 | |||||||||||
Convertible debt | |||||||||||||||
Issued July 2012 | 10/31/2017 | Fixed | 10.00% | $ | 1,500 | $ | 1,500 | ||||||||
Issued March 2015 | 04/30/2017 | Fixed | 10.00% | 7,700 | 7,700 | ||||||||||
Total | $ | 9,200 | $ | 9,200 |
(a) | Represents cash interest rates as of March 31, 2016 in accordance with the lender agreements.The rates exclude amortization of deferred financing costs which range from 0.08% to 1.92% per annum. |
(Amounts in 000’s) | |||
2017 | $ | 47,867 | |
2018 | 12,502 | ||
2019 | 1,778 | ||
2020 | 1,866 | ||
2021 | 1,969 | ||
Thereafter | 55,112 | ||
Subtotal | $ | 121,094 | |
Less: unamortized discounts | (202 | ) | |
Less: deferred financing costs | $ | (2,504 | ) |
Total notes and other debt | $ | 118,388 |
Three Months Ended March 31, | ||||||||
(Amounts in 000’s) | 2016 | 2015 | ||||||
Total revenues | $ | — | $ | 46,862 | ||||
Cost of services | 519 | 42,930 | ||||||
Net income (loss) | (528 | ) | 2,266 | |||||
Interest expense, net | 8 | 313 |
(Amounts in 000’s) | March 31, 2016 | December 31, 2015 | ||||||
Property and equipment, net | $ | 1,237 | $ | 1,249 | ||||
Assets of disposal groups held for sale | $ | 1,237 | $ | 1,249 | ||||
Notes payable | $ | 949 | $ | 958 | ||||
Liabilities of disposal group held for sale | $ | 949 | $ | 958 |
Shares Issued & Outstanding | Net Proceeds from Issuance (in 000's) | Dividends Paid (in 000's) | |||||||
Balances, December 31, 2015 | 2,426,930 | $ | 54,714 | ||||||
At-The-Market offering | 186,905 | $ | 3,677 | ||||||
Dividends paid during 2016 | $ | 1,777 | |||||||
Balances, March 31, 2016 | 2,613,835 | $ | 58,391 |
Three Months Ended March 31, | ||||||||
(Amounts in 000’s) | 2016 | 2015 | ||||||
Employee compensation: | ||||||||
Restricted stock | $ | 111 | $ | 63 | ||||
Stock options | 85 | 44 | ||||||
Warrants | 246 | 33 | ||||||
Total employee stock-based compensation expense | $ | 442 | $ | 140 | ||||
Non-employee compensation: | ||||||||
Board restricted stock | $ | 26 | $ | 51 | ||||
Board stock options | 12 | 12 | ||||||
Total non-employee stock-based compensation expense | $ | 38 | $ | 63 | ||||
Total stock-based compensation expense | $ | 480 | $ | 203 |
• | The 2011 Stock Incentive Plan, which expires March 28, 2021 and provides for a maximum of 2,152,500 shares of common stock to be issued. |
Three Months Ended March 31, | |||||
2016 | 2015 | ||||
Dividend yield | — | % | — | % | |
Expected volatility | 41 | % | 51 | % | |
Risk-free interest rate | 1.43 | % | 1.73 | % | |
Expected term | 5.0 years | 5.2 years |
Number of Shares | Weighted Average Exercise Price | Weighted Average Remaining Contractual Term (in years) | Aggregate Intrinsic Value (in 000's) | ||||||||||
Outstanding, December 31, 2015 | 266,514 | $ | 3.96 | ||||||||||
Granted | 141,507 | $ | 2.07 | ||||||||||
Exercised | — | $ | — | ||||||||||
Forfeited | (8,334 | ) | $ | 4.06 | |||||||||
Expired | (26,250 | ) | $ | 3.93 | |||||||||
Outstanding, March 31, 2016 | 373,437 | $ | 3.24 | 6.0 | $ | 37 | |||||||
Vested at March 31, 2016 | 298,946 | $ | 3.07 | 5.4 | $ | 37 |
Stock Options Outstanding | Options Exercisable | ||||||||||||||
Exercise Price | Number of Shares | Weighted Average Remaining Contractual Term (in years) | Weighted Average Exercise Price | Vested at March 31, 2016 | Weighted Average Exercise Price | ||||||||||
$1.30 | 1,989 | 0.1 | $ | 1.30 | 1,989 | $ | 1.30 | ||||||||
$1.31 - $3.99 | 289,337 | 6.0 | $ | 3.01 | 220,183 | $ | 2.73 | ||||||||
$4.00 - $4.30 | 82,111 | 6.0 | $ | 4.11 | 76,774 | $ | 4.09 | ||||||||
Total | 373,437 | 6.0 | $ | 3.24 | 298,946 | $ | 3.07 |
Number of Shares | Weighted Average Exercise Price | Weighted Average Remaining Contractual Term (in years) | Aggregate Intrinsic Value (in 000's) | ||||||||||
Outstanding, December 31, 2015 | 2,051,475 | $ | 3.46 | ||||||||||
Granted | — | $ | — | ||||||||||
Exercised | — | $ | — | ||||||||||
Forfeited | — | $ | — | ||||||||||
Expired | — | $ | — | ||||||||||
Outstanding, March 31, 2016 | 2,051,475 | $ | 3.46 | 4.5 | $ | 249 | |||||||
Vested at March 31, 2016 | 1,576,475 | $ | 3.19 | 3.2 | $ | 249 |
Warrants Outstanding | Warrants Exercisable | ||||||||||||||
Exercise Price | Number of Shares | Weighted Average Remaining Contractual Term (in years) | Weighted Average Exercise Price | Vested at March 31, 2016 | Weighted Average Exercise Price | ||||||||||
$0 - $1.99 | 327,664 | 1.6 | $ | 1.56 | 327,664 | $ | 1.56 | ||||||||
$2.00 - $2.99 | 335,354 | 2.3 | $ | 2.58 | 335,354 | $ | 2.58 | ||||||||
$3.00 - $3.99 | 500,355 | 3.6 | $ | 3.59 | 500,355 | $ | 3.59 | ||||||||
$4.00 - $4.99 | 864,769 | 7.0 | $ | 4.37 | 389,769 | $ | 4.40 | ||||||||
$5.00 - $5.90 | 23,333 | 7.1 | $ | 5.90 | 23,333 | $ | 5.90 | ||||||||
Total | 2,051,475 | 4.5 | $ | 3.46 | 1,576,475 | $ | 3.19 |
Number of Shares | Weighted Avg. Grant Date Fair Value | ||||||
Unvested at December 31, 2015 | 294,021 | $ | 4.19 | ||||
Granted | 196,251 | $ | 2.14 | ||||
Vested | (53,141 | ) | $ | 2.07 | |||
Forfeited | — | $ | — | ||||
Unvested at March 31, 2016 | 437,131 | $ | 3.53 |
Owned | Leased | Managed for Third Parties | Total | |||||||||||||||||||||
Facilities | Beds/Units | Facilities | Beds/Units | Facilities | Beds/Units | Facilities | Beds/Units | |||||||||||||||||
State | ||||||||||||||||||||||||
Arkansas | 9 | 958 | — | — | — | — | 9 | 958 | ||||||||||||||||
Alabama | 2 | 304 | — | — | — | — | 2 | 304 | ||||||||||||||||
Georgia | 4 | 463 | 10 | 1,168 | — | — | 14 | 1,631 | ||||||||||||||||
North Carolina | 1 | 106 | — | — | — | — | 1 | 106 | ||||||||||||||||
Ohio | 4 | 279 | 1 | 94 | 3 | 332 | 8 | 705 | ||||||||||||||||
Oklahoma | 2 | 197 | — | — | — | — | 2 | 197 | ||||||||||||||||
South Carolina | 2 | 180 | — | — | — | — | 2 | 180 | ||||||||||||||||
Total | 24 | 2,487 | 11 | 1,262 | 3 | 332 | 38 | 4,081 | ||||||||||||||||
Facility Type | ||||||||||||||||||||||||
Skilled Nursing | 22 | 2,375 | 11 | 1,262 | 2 | 249 | 35 | 3,886 | ||||||||||||||||
Assisted Living | 2 | 112 | — | — | — | — | 2 | 112 | ||||||||||||||||
Independent Living | — | — | — | — | 1 | 83 | 1 | 83 | ||||||||||||||||
Total | 24 | 2,487 | 11 | 1,262 | 3 | 332 | 38 | 4,081 |
Operator Affiliation | Number of Facilities | Beds / Units | ||||
Aria Health Group / Skyline Healthcare (1) | 9 | 958 | ||||
Beacon Health Management | 7 | 585 | ||||
C.R. Management | 7 | 830 | ||||
Wellington Health Services | 4 | 641 | ||||
New Beginnings Care (2) | 3 | 252 | ||||
Symmetry Healthcare | 3 | 286 | ||||
Southwest LTC | 2 | 197 | ||||
Subtotal | 35 | 3,749 | ||||
AdCare Managed | 3 | 332 | ||||
Total | 38 | 4,081 |
(1) | AdCare subleased through its subsidiaries nine facilities located in Arkansas to affiliates of Aria pursuant to separate sublease agreements. Eight of the Aria Subleases commenced on May 1, 2015 and one Aria Sublease commenced on November 1, 2015. Effective February 3, 2016, each Aria Sublease was terminated due to the failure to pay rent pursuant to the terms of such sublease. Subsequently, on February 5, 2016, the Company entered into the Skyline Lease with respect to such facilities, |
(2) | On January 22, 2016, New Beginnings Care ("New Beginnings") filed a petition to reorganize its finances under the Bankruptcy Code. To date, New Beginnings has neither affirmed nor rejected the Master Lease entered into on November 3, 2015 with respect to the Jeffersonville, Oceanside, and Savannah Beach facilities. The Company is in discussions with New Beginnings and other potential operators about renting such facilities. For a more detailed discussion, see Note 7 - Leases, to the Company's Notes to Consolidated Financial Statements located in Part I, Item 1, of this Quarterly Report on Form 10-Q. |
Three Months Ended March 31, | Increase (Decrease) | ||||||||||||||
(Amounts in 000’s) | 2016 | 2015 | Amount | Percent | |||||||||||
Revenues: | |||||||||||||||
Rental revenues | $ | 6,849 | $ | 1,340 | $ | 5,509 | 411.1 | % | |||||||
Management fee and other revenues | 233 | 218 | 15 | 6.9 | % | ||||||||||
Total revenues | 7,082 | 1,558 | 5,524 | 354.6 | % | ||||||||||
Expenses: | |||||||||||||||
General and administrative expenses | 2,542 | 3,331 | (789 | ) | (23.7 | )% | |||||||||
Facility rent expense | 2,179 | 487 | 1,692 | 347.4 | % | ||||||||||
Depreciation and amortization | 1,713 | 1,675 | 38 | 2.3 | % | ||||||||||
Other operating expenses | 203 | 102 | 101 | 99.0 | % | ||||||||||
Total expenses | 6,637 | 5,595 | 1,042 | 18.6 | % | ||||||||||
Income (loss) from operations | 445 | (4,037 | ) | 4,482 | 111.0 | % | |||||||||
Other expense: | |||||||||||||||
Interest expense, net | 1,825 | 2,490 | (665 | ) | (26.7 | )% | |||||||||
Loss on extinguishment of debt | — | 680 | (680 | ) | (100.0 | )% | |||||||||
Other expense | 42 | 288 | (246 | ) | (85.4 | )% | |||||||||
Total other expense, net | 1,867 | 3,458 | (1,591 | ) | (46.0 | )% | |||||||||
Loss from continuing operations before income taxes | (1,422 | ) | (7,495 | ) | (6,073 | ) | (81.0 | )% | |||||||
Income tax benefit | — | 20 | 20 | (100.0 | )% | ||||||||||
Loss from continuing operations | (1,422 | ) | (7,515 | ) | (6,053 | ) | (80.5 | )% | |||||||
(Loss) income from discontinued operations, net of tax | (528 | ) | 2,266 | 2,794 | 123.3 | % | |||||||||
Net loss | $ | (1,950 | ) | $ | (5,249 | ) | $ | (3,259 | ) | (62.1 | )% |
Three Months Ended March 31, | ||||||||
(Amounts in 000’s) | 2016 | 2015 | ||||||
Net cash used in operating activities - continuing operations | $ | (941 | ) | $ | (5,248 | ) | ||
Net cash (used in) provided by operating activities - discontinued operations | (639 | ) | 4,645 | |||||
Net cash provided by investing activities - continuing operations | 4,145 | 331 | ||||||
Net cash used in investing activities - discontinued operations | (1 | ) | (44 | ) | ||||
Net cash (used in) provided by financing activities - continuing operations | (2,752 | ) | 277 | |||||
Net cash used in financing activities - discontinued operations | (268 | ) | (16 | ) | ||||
Net change in cash and cash equivalents | (456 | ) | (55 | ) | ||||
Cash and cash equivalents at beginning of period | 2,720 | 10,735 | ||||||
Cash and cash equivalents at end of period | $ | 2,264 | $ | 10,680 |
Period | Total Number of Shares Purchased | Average Price Paid per Share | Total Number of Shares Purchased as Part of Publicly Announced Plan | Maximum Number of Shares That May Yet Be Purchased (a) | |||||||||
January 1, 2016 - January 31, 2016 | 150,000 | $ | 2.05 | 150,000 | 350,000 | ||||||||
February 1, 2016 - February 29, 2016 | — | — | — | — | |||||||||
March 1, 2016 - March 31, 2016 | — | — | — | — | |||||||||
Total | 150,000 | $ | 2.05 | 150,000 | 350,000 |
• | should not in all instances be treated as categorical statements of fact, but rather as a way of allocating the risk to one of the parties if those statements prove to be inaccurate; |
• | have been qualified by disclosures that were made to the other party in connection with the negotiation of the applicable agreement, which disclosures are not necessarily reflected in the agreement; |
• | may apply standards of materiality in a way that is different from what may be viewed as material to investors; and |
• | were made only as of the date of the applicable agreement or such other date or dates as may be specified in the agreement and are subject to more recent developments. |
Exhibit No. | Description | Method of Filing |
2.1 | Purchase and Sale Agreement, by and among Valley River Property Holdings, LLC, Homestead Property Holdings, LLC, Park Heritage Property Holdings, LLC, Mt. V Property Holdings, LLC, Mountain Top Property Holdings, LLC, Little Rock HC&R Property Holdings, LLC, Woodland Hills HC Property Holdings, LLC, Northridge HC&R Property Holdings, LLC, APH&R Property Holdings, LLC, and Little Ark Realty Holdings, LLC | Filed herewith |
3.1 | Declaration of Conversion of AdCare Health Systems, Inc., an Ohio corporation, to AdCare Health Systems, Inc., a Georgia corporation | Incorporated by reference to Appendix A of the Registrant’s Proxy Statement on Schedule 14A filed with the Securities and Exchange Commission on October 29, 2013 |
3.2 | Certificate of Conversion of AdCare Health Systems, Inc. | Incorporated by reference to Exhibit 3.2 of the Registrant’s Current report on Form 8-K filed on December 18, 2013 |
3.3 | Certificate for Conversion for Entities Converting Within or Off the Records of the Ohio Secretary of State. | Incorporated by reference to Exhibit 3.1 of the Registrant’s Current report on Form 8-K filed on December 18, 2013 |
3.4 | Articles of Incorporation of AdCare Health Systems, Inc., filed with the Secretary of State of the State of Georgia on December 12, 2013 | Incorporated by reference to Exhibit 3.3 of the Registrant’s Current report on Form 8-K filed on December 27, 2013 |
3.5 | Articles of Correction to Articles of Incorporation of AdCare Health Systems, Inc., filed with the Secretary of State of the State of Georgia on December 12, 2013. | Incorporated by reference to Exhibit 3.1 of the Registrant’s Current report on Form 8-K filed on December 27, 2013 |
3.6 | Bylaws of AdCare Health Systems, Inc. | Incorporated by reference to Exhibit 3.4 of the Registrant’s Current report on Form 8-K filed on December 27, 2013 |
3.7 | Amendment No. 1 to the Bylaws of AdCare Health Systems, Inc. | Incorporated by reference to Exhibit 3.7 of the Registrant’s Annual Report on Form 10-K for the year ended December 31, 2013 |
3.8 | Articles of Amendment to the Articles of Incorporation of AdCare Health Systems, Inc., as amended, filed with the Secretary of State of the State of Georgia on April 7, 2015. | Incorporated by reference to Exhibit 3.1 of the Registrant's Current Report on Form 8-K filed on April 13, 2015 |
3.9 | Articles of Amendment to the Articles of Incorporation of AdCare Health Systems, Inc., as amended, filed with the Secretary of State of the State of Georgia on May 28, 2015 | Incorporated by reference to Exhibit 3.1 of the Registrant's Current Report on Form 8-K filed on June 2, 2015 |
3.10 | Articles of Amendment to the Articles of Incorporation of AdCare Health Systems, Inc., as amended, filed with the Secretary of State of the State of Georgia on December 11, 2015. | Incorporated by reference to Exhibit 3.1 of the Registrant's Current Report on Form 8-K filed on December 14, 2015 |
3.11 | Amendment No. 2 to the Bylaws of AdCare Health Systems, Inc. | Incorporated by reference to Exhibit 3.2 of the Registrant's Current Report on Form 8-K filed on December 14, 2015 |
4.1 | Specimen Common Stock Certificate of AdCare Health Systems, Inc. | Incorporated by reference to Exhibit 3.1 of the Registrant’s Current report on Form 8-K filed on December 18, 2013 |
4.2* | 2004 Stock Option Plan of AdCare Health Systems, Inc. | Incorporated by reference to Exhibit 4.1 of the Registrant’s Registration Statement on Form S-8 (Registration No. 333-131542) filed October 27, 2011 |
4.3* | 2005 Stock Option Plan of AdCare Health Systems, Inc. | Incorporated by reference to Exhibit 4.2 of the Registrant’s Registration Statement on Form S-8 (Registration No. 333-131542) filed October 27, 2011 |
4.4* | AdCare Health Systems, Inc. 2011 Stock Incentive Plan | Incorporated by reference to Exhibit 4.3 of the Registrant’s Registration Statement on Form S-8 (Registration No. 333-131542) filed October 27, 2011 |
4.5* | Form of Non-Statutory Stock Option Agreement | Incorporated by reference to Exhibit 4.4 of the Registrant’s Registration Statement on Form S-8 (Registration No. 333-131542) filed October 27, 2011 |
4.6* | Form of Incentive Stock Option Agreement | Incorporated by reference to Exhibit 4.5 of the Registrant’s Registration Statement on Form S-8 (Registration No. 333-131542) filed October 27, 2011 |
4.7 | Form of 8% Subordinated Convertible Note Due 2015 issued by AdCare Health Systems, Inc. | Incorporated by reference to Exhibit 99.3 to the Registrant’s Current Report on Form 8-K filed July 5, 2012 |
4.8 | Form of Warrant to Purchase Common Stock of the Company | Incorporated by reference to Exhibit 4.3 to the Registrant’s Form S-3 (File No. 333-175541) |
4.9 | Warrant to Purchase 50,000 Shares of Common Stock, dated December 28, 2012, issued by AdCare Health Systems, Inc. to Strome Alpha Offshore Ltd. | Incorporated by reference to Exhibit 4.21 of the Registrant’s Annual Report on Form 10-K for the year ended December 31, 2012 |
4.10 | Form of Warrant, dated March 28, 2014, issued by AdCare Health Systems, Inc. to the placement agent and its affiliates in connection with the offering of 10% Subordinated Convertible Notes Due April 30, 2015 | Incorporated by reference to Exhibit 4.3 of the Registrant's Quarterly Report on Form 10-Q for the three months ended March 31, 2014 |
4.11 | Form of Warrant granted to management to Purchase Shares of AdCare Health Systems, Inc. dated November 20, 2007 | Incorporated by reference to Exhibit 10.19 of the Registrant's annual report on form 10-KSB as amended March 31, 2008 |
4.12 | Registration Rights Agreement, dated March 31, 2015, by and among AdCare Health Systems, Inc. and the Purchasers of the Company’s 10% Convertible Subordinated Notes Due April 30, 2017 | Incorporated by reference to Exhibit 4.1 of the Registrant's Quarterly Report on Form 10-Q for the quarter ended March 31, 2015 |
4.13 | Form of 10% Convertible Subordinated Notes Due April 30, 2017 | Incorporated by reference to Exhibit 4.2 of the Registrant's Quarterly Report on Form 10-Q for the quarter ended March 31, 2015 |
4.14 | Form of 10% Convertible Subordinated Notes Due April 30, 2017 (Affiliate Form) | Incorporated by reference to Exhibit 4.3 of the Registrant's Quarterly Report on Form 10-Q for the quarter ended June 30, 2015 |
4.15 | Amendment to Subordinated Convertible Note Issued March 31, 2015, Dated July 30, 2015, by and between AdCare Health Systems, Inc., and Cantone Asset Management, LLC and Cantone Research, Inc. | Incorporated by reference to Exhibit 10.105 of the Registrant's Quarterly Report on Form 10-Q for the quarter ended June 30, 2015 |
10.1 | Master Lease Agreement, dated February 5, 2016, by and among Valley River Property Holdings, LLC, Homestead Property Holdings, LLC, Park Heritage Property Holdings, LLC, Mt. V Property Holdings, LLC, Mountain Top Property Holdings, LLC, Little Rock HC&R Property Holdings, LLC, Woodland Hills HC Property Holdings, LLC, Northridge HC&R Property Holdings, LLC, APH&R Property Holdings, LLC, and Skyline Healthcare, LLC | Incorporated by reference to Exhibit 10.462 of the Registrant's Annual Report on Form 10-K for the year ended December 31, 2015 |
10.2 | Option Agreement, dated February 5, 2016, by and among Valley River Property Holdings, LLC, Homestead Property Holdings, LLC, Park Heritage Property Holdings, LLC, Mt. V Property Holdings, LLC, Mountain Top Property Holdings, LLC, Little Rock HC&R Property Holdings, LLC, Woodland Hills HC Property Holdings, LLC, Northridge HC&R Property Holdings, LLC, APH&R Property Holdings, LLC, and Joseph Schwartz | Incorporated by reference to Exhibit 10.463 of the Registrant's Annual Report on Form 10-K for the year ended December 31, 2015 |
10.3 | Third Amendment to Lease, dated October 1, 2015, by and between William M. Foster and ADK Georgia, LLC | Filed herewith |
10.4* | Letter Agreement, dated February 1, 2016, by and between E. Clinton Cain and AdCare Health Systems, Inc. | Filed herewith |
31.1 | Certification of CEO pursuant to Section 302 of the Sarbanes-Oxley Act | Filed herewith |
31.2 | Certification of CFO pursuant to Section 302 of the Sarbanes-Oxley Act | Filed herewith |
32.1 | Certification of CEO pursuant to Section 906 of the Sarbanes-Oxley Act | Filed herewith |
32.2 | Certification of CFO pursuant to Section 906 of the Sarbanes-Oxley Act | Filed herewith |
101 | The following financial information from AdCare Health Systems, Inc. Quarterly Report on Form 10-Q for the quarter ended March 31, 2016, formatted in XBRL (eXtensible Business Reporting Language): (i) Consolidated Balance Sheets as of March 31, 2016 and December 31, 2015, (ii) Consolidated Statements of Operations for the three months ended March 31, 2016 and 2015, (iii) Consolidated Statements of Stockholders’ Deficit for the three months ended March 31, 2016 (iv) Consolidated Statements of Cash Flows for the three months ended March 31, 2016 and 2015, and (v) the Notes to Consolidated Financial Statements. | Filed herewith |
ADCARE HEALTH SYSTEMS, INC. | |||
(Registrant) | |||
Date: | May 16, 2016 | /s/ William McBride III | |
William McBride III | |||
Chairman and Chief Executive Officer | |||
(Principal Executive Officer) | |||
Date: | May 16, 2016 | /s/ Allan J. Rimland | |
Allan J. Rimland | |||
President, Chief Financial Officer and Corporate Secretary (Principal Financial Officer) | |||
Date: | May 16, 2016 | /s/ E. Clinton Cain | |
E. Clinton Cain | |||
Senior Vice President, Chief Accounting Officer and Controller (Principal Accounting Officer) |
if to Sellers, to: | c/o AdCare Health Systems, Inc. | ||
Two Buckhead Plaza | |||
3050 Peachtree Road NW, Suite 355 | |||
Atlanta, Georgia 30305 | |||
Attn: CEO | |||
Facsimile: (404) 842-1899 | |||
with a copies to: | Andrew D. Simons, Esq. | ||
Reicker, Pfau, Pyle & McRoy LLP | |||
1421 State Street, Suite B | |||
Santa Barbara, California 93101 | |||
Facsimile: (805) 966-3320 | |||
and | |||
Gregory P. Youra, Esq. | |||
Holt Ney Zatcoff & Wasserman, LLP | |||
100 Galleria Parkway, Suite 1800 | |||
Atlanta, Georgia 30339 | |||
Facsimile: (770) 956-1490 |
If to Purchasers, to: | c/o Skyline Health Care, LLC | |
505 Marlboro Road | ||
Wood-Ridge, New Jersey | ||
Attn: Joseph Schwartz | ||
Facsimile: _______________ | ||
With copies to: | Koss & Schonfeld LLP | |
90 John Street – Suite 408 | ||
New York, NY 10038 | ||
(Fax) 212-401-4757 | ||
Attention: Allen Koss, Esq. | ||
If to Escrow Agent: | WACO Title Company | |
11300 Cantrell Road, Suite 105 | ||
Little Rock, AR 72212 | ||
Attn: Sandy J. Batteria | ||
SELLERS: | |||
VALLEY RIVER PROPERTY HOLDINGS, | |||
LLC, a Georgia limited liability company | |||
By: | /s/ William McBride | ||
Name: | William McBride | ||
Title: | Manager | ||
HOMESTEAD PROPERTY HOLDINGS, LLC, | |||
a Georgia limited liability company | |||
By: | /s/ William McBride | ||
Name: | William McBride | ||
Title: | Manager | ||
PARK HERITAGE PROPERTY | |||
HOLDINGS, LLC, a Georgia limited liability | |||
company | |||
By: | /s/ William McBride | ||
Name: | William McBride | ||
Title: | Manager | ||
MT. V PROPERTY HOLDINGS, LLC, a Georgia | |||
limited liability company | |||
By: | /s/ William McBride | ||
Name: | William McBride | ||
Title: | Manager | ||
MOUNTAIN TOP PROPERTY HOLDINGS, | |||
LLC, a Georgia limited liability company | |||
By: | /s/ William McBride | ||
Name: | William McBride | ||
Title: | Manager | ||
LITTLE ROCK HC&R PROPERTY | |||
HOLDINGS, LLC, a Georgia limited liability | |||
company | |||
By: | /s/ William McBride | ||
Name: | William McBride | ||
Title: | Manager | ||
WOODLAND HILLS HC PROPERTY | |||
HOLDINGS, LLC, a Georgia limited liability | |||
company | |||
By: | /s/ William McBride | ||
Name: | William McBride | ||
Title: | Manager | ||
NORTHRIDGE HC&R PROPERTY | |||
HOLDINGS, LLC, a Georgia limited liability | |||
company | |||
By: | /s/ William McBride | ||
Name: | William McBride | ||
Title: | Manager | ||
APH&R PROPERTY HOLDINGS, LLC, | |||
a Georgia limited liability company | |||
By: | /s/ William McBride | ||
Name: | William McBride | ||
Title: | Manager | ||
PURCHASERS: | |||
LITTLE ARK REALTY HOLDINGS, LLC, | |||
an Arkansas limited liability company | |||
By: | /s/ Joseph Schwartz | ||
Name: | Joseph Schwartz | ||
Title: | Manager | ||
Facility Name | Landlord | Tenant | Address | Bed Number Facility Type |
Homestead Manor Nursing Home | Homestead Property Holdings, LLC | __________ | 826 North Street Stamps, AR 71860-4522 | 104 bed SNF |
Heritage Park Nursing Center | Park Heritage Property Holdings, LLC | __________ | 1513 S. Dixieland Road Rogers 72758-4935 | 110 bed SNF |
Stone County Nursing and Rehabilitation Center | Mt. V Property Holdings, LLC | __________ | 706 Oak Grove Street Mountain View, AR 72560-8601 | 97 bed SNF |
Stone County Residential Care Facility | Mountain Top Property Holdings, LLC | __________ | 414 Massey Avenue Mountain View, AR 72560-6132 | 32 bed ALF |
West Markham Sub Acute and Rehabilitation Center | Little Rock HC&R Property Holdings, LLC | __________ | 5720 West Markham Street Little Rock, AR 72205-3328 | 154 bed SNF |
Woodland Hills Healthcare and Rehabilitation | Woodland Hills HC Property Holdings, LLC | __________ | 8701 Riley Dr. Little Rock, AR 72205-6509 | 140 bed SNF |
Northridge Healthcare and Rehabilitation | Northridge HC&R Property Holdings, LLC | __________ | 2501 John Ashley Dr. North Little Rock, AR 72114-1815 | 140 bed SNF |
Cumberland Health and Rehabilitation Center | APH&R Property Holdings, LLC | __________ | 1516 S. Cumberland Street Little Rock, AR 72202-5065 | 120 bed SNF |
River Valley Health and Rehabilitation Center | Valley River Property Holdings, LLC | __________ | 5301 Wheeler Avenue Fort Smith, AR 72901-8339 | 129 bed SNF |
LESSOR: | LESSEE: | |||
ADK GEORGIA, LLC, a Georgia limited liability | ||||
company | ||||
/s/ William M. Foster | By: | /s/ William McBride | ||
William M. Foster | William McBride, Manager |
If to Owner: | William M. Foster c/o Foster Development Company 146 Spring Street Macon, Georgia 31201 |
With a copy to: | Joshua E. Kight, Esq. 306 Academy Ave., Suite 200 P.O. Box 816 Dublin, GA 31040 |
If to Sub-Landlord: | ADK Georgia, LLC 3050 Peachtree Road NW, Suite 355 Atlanta, Georgia 30305 Attn: Manager |
With a copy to: | Gregory P. Youra, Esq. Holt Ney Zatcoff & Wasserman, LLP 100 Galleria Parkway, Suite 1800 Atlanta, Georgia 30339 |
If to Lender: | Regions Bank 1900 5th Avenue North, 14th Floor Birmingham, AL 35203 Attn: Steven W. "Steve" Mitchell |
With a copy to: | Baker, Donelson, Bearman, Caldwell & Berkowitz, PC 1600 Wells Fargo Tower Birmingham, Alabama 35203 Attn: Luther P. Crull, III, Esq |
Signed, sealed and delivered in the presence of: Unofficial Witness Notary Public My Commission Expires: | OPERATOR: By: Name: Its: Date: |
Signed, sealed and delivered in the presence of: Unofficial Witness Notary Public My Commission Expires: | SUB-LANDLORD: ADK GEORGIA, LLC By: Name: Its: Date: |
Signed, sealed and delivered in the presence of: Unofficial Witness Notary Public My Commission Expires: | OWNER: By: Name: Its: Date: |
Signed, sealed and delivered in the presence of: Unofficial Witness Notary Public My Commission Expires: | LENDER: By: Name: Its: Date: |
/s/ Allan J. Rimland 2/1/2016 | /s/ E. Clinton Cain 2/1/2016 | |||
Allan J. Rimland, President, Date | Name, Date | |||
Date: | May 16, 2016 | /s/ William McBride III | |
William McBride III | |||
Chief Executive Officer |
Date: | May 16, 2016 | /s/ Allan J. Rimland | |
Allan J. Rimland | |||
President, Chief Financial Officer, and Corporate Secretary (Principal Financial Officer) |
Date: | May 16, 2016 | /s/ William McBride III | |
William McBride III | |||
Chief Executive Officer |
Date: | May 16, 2016 | /s/ Allan J. Rimland | |
Allan J. Rimland | |||
President, Chief Financial Officer, and Corporate Secretary |
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Document and Entity Information - shares |
3 Months Ended | |
---|---|---|
Mar. 31, 2016 |
Apr. 30, 2016 |
|
Document and Entity Information | ||
Entity Registrant Name | ADCARE HEALTH SYSTEMS, INC | |
Entity Central Index Key | 0001004724 | |
Document Type | 10-Q | |
Document Period End Date | Mar. 31, 2016 | |
Amendment Flag | false | |
Current Fiscal Year End Date | --12-31 | |
Entity Filer Category | Smaller Reporting Company | |
Entity Common Stock, Shares Outstanding | 19,948,534 | |
Document Fiscal Year Focus | 2016 | |
Document Fiscal Period Focus | Q1 |
CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($) $ in Thousands |
Mar. 31, 2016 |
Dec. 31, 2015 |
---|---|---|
Statement of Financial Position [Abstract] | ||
Accounts receivable, allowance (in dollars) | $ 11,276 | $ 12,487 |
Preferred stock, par value (in dollars per share) | $ 0 | $ 0 |
Preferred stock, shares authorized (in shares) | 5,000,000 | 5,000,000 |
Preferred stock, shares issued (in shares) | 2,613,835 | 2,426,930 |
Preferred stock, shares outstanding (in shares) | 2,614,000 | 2,427,000 |
Preferred stock, redemption amount | $ 65,346 | $ 60,273 |
Common stock and additional paid-in capital, par value (in dollars per share) | $ 0 | $ 0 |
Common stock and additional paid-in capital, shares authorized (in shares) | 55,000,000 | 55,000,000 |
Common stock and additional paid-in capital, shares issued (in shares) | 19,907,000 | 19,861,000 |
Common stock and additional paid-in capital, shares outstanding (in shares) | 19,907,000 | 19,861,000 |
CONSOLIDATED STATEMENT OF STOCKHOLDERS’ EQUITY / (DEFICIT) - 3 months ended Mar. 31, 2016 - USD ($) $ in Thousands |
Total |
Shares of Common Stock |
Common Stock and Additional Paid-in Capital |
Accumulated Deficit |
---|---|---|---|---|
Balance at beginning of period at Dec. 31, 2015 | $ (23,835) | $ 60,958 | $ (84,793) | |
Balance at beginning of period (in shares) at Dec. 31, 2015 | 19,861,000 | 19,861,000 | ||
Increase (Decrease) in Stockholders' Equity | ||||
Stock-based compensation | $ 480 | 480 | ||
Common stock repurchase program (shares) | (150,000) | (150,000) | ||
Common stock repurchase program | $ (312) | (312) | ||
Issuance of restricted stock, net (shares) | 196,000 | |||
Preferred stock dividends | (1,777) | (1,777) | ||
Net loss | (1,950) | (1,950) | ||
Balance at end of period at Mar. 31, 2016 | $ (27,394) | $ 61,126 | $ (88,520) | |
Balance at end of period (in shares) at Mar. 31, 2016 | 19,907,000 | 19,907,000 |
Organization and Significant Accounting Policies |
3 Months Ended |
---|---|
Mar. 31, 2016 | |
Accounting Policies [Abstract] | |
ORGANIZATION AND SIGNIFICANT ACCOUNTING POLICIES | ORGANIZATION AND SIGNIFICANT ACCOUNTING POLICIES See Part II, Item 8, Notes to Consolidated Financial Statements, Note 1 - Organization and Significant Accounting Policies included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2015, filed with the Securities and Exchange Commission (the "SEC") on March 30, 2016 (the "Annual Report"), for a description of all significant accounting policies. Description of Business AdCare Health Systems, Inc. (“AdCare”), through its subsidiaries (together, the “Company” or “we”), is a self-managed real estate investment company that invests primarily in real estate purposed for long-term care and senior living. The Company's business primarily consists of leasing and subleasing such facilities to third-party tenants, which operate the facilities. As of March 31, 2016, the Company owned, leased, or managed for third parties 38 facilities primarily in the Southeast. The operators of the Company's facilities provide a range of health care services, including skilled nursing and assisted living services, social services, various therapy services, and other rehabilitative and healthcare services for both long-term and short-stay patients and residents. The Company was incorporated in Ohio on August 14, 1991, under the name Passport Retirement, Inc. In 1995, the Company acquired substantially all of the assets and liabilities of AdCare Health Systems, Inc. and changed its name to AdCare Health Systems, Inc. AdCare completed its initial public offering in November 2006. Initially based in Ohio, the Company expanded its portfolio through a series of strategic acquisitions to include properties in a number of other states, primarily in the Southeast. In 2012, the Company relocated its executive offices and accounting operations to Georgia, and AdCare changed its state of incorporation from Ohio to Georgia on December 12, 2013. Historically, the Company's business focused on owning and operating skilled nursing and assisted living facilities. The Company also managed facilities on behalf of unaffiliated owners with whom the Company entered into management contracts. In July 2014, the Company's Board of Directors (the “Board”) approved a strategic plan to transition (the “Transition”) the Company to a healthcare property holding and leasing company through a series of leasing and subleasing transactions. The Company completed the Transition through: (i) leasing to third-party operators all of the healthcare properties which it owns and previously operated; (ii) subleasing to third-party operators all of the healthcare properties which it leases (but does not own) and previously operated; and (iii) continuing the one remaining management agreement to manage two skilled nursing facilities and one independent living facility for third parties. The Company leases its currently-owned healthcare properties, and subleases its currently-leased healthcare properties, on a triple-net basis, meaning that the lessee (i.e., the new third-party operator of the property) is obligated under the lease or sublease, as applicable, for all costs of operating the properties including insurance, taxes and facility maintenance, as well as the lease or sublease payments, as applicable. These leases are generally long-term in nature with renewal options and annual escalation clauses. As a result of the Transition, the Company now has many of the characteristics of a real estate investment trust ("REIT") and is now focused on the ownership, acquisition and leasing of healthcare related properties. The Board is analyzing and considering: (i) whether and, if so, when, the Company could satisfy the requirements to qualify as a REIT under the Internal Revenue Code of 1986, as amended (the “Code”); (ii) the structural and operational complexities which would need to be addressed before the Company could qualify as a REIT, including the disposition of certain assets or the termination of certain operations which may not be REIT compliant; and (iii) if the Company were to qualify as a REIT, whether electing REIT status would be in the best interests of the Company and its shareholders in light of various factors, including our significant consolidated Federal net operating loss carryforwards. There is no assurance that the Company will qualify as a REIT in future taxable years or, if it were to so qualify, that the Board would determine that electing REIT status would be in the best interests of the Company and its shareholders. On March 29, 2016, the Company announced that given the completion of the Transition, the Board has begun to explore strategic alternatives for the Company. As of March 31, 2016, the Company owned, leased, or managed 38 facilities primarily in the Southeast. Of the 38 facilities, the Company: (i) leased 22 owned and subleased 11 leased skilled nursing facilities to third-party operators; (ii) leased two owned assisted living facilities to third-party operators; and (iii) managed on behalf of third-party owners two skilled nursing facilities and one independent living facility (see Part II, Item 8, Notes to Consolidated Financial Statements, Note 7 - Leases in the Annual Report for a full description of the Company's leases). Basis of Presentation The accompanying unaudited consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) for interim financial information and with the instructions to Form 10-Q and Rule 8-03 of Article 8 of Regulations S-X. Accordingly, they do not include all of the information and footnotes required by GAAP for complete financial statements. In the opinion of management, all adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation of the results of operations for the periods presented have been included. Operating results for the three months ended March 31, 2016 and 2015, are not necessarily indicative of the results that may be expected for the fiscal year. The balance sheet at December 31, 2015, has been derived from the audited consolidated financial statements at that date, but does not include all of the information and footnotes required by GAAP for complete financial statements. You should read the accompanying unaudited consolidated financial statements together with the historical consolidated financial statements of the Company for the year ended December 31, 2015, included in the Annual Report. Use of Estimates The preparation of consolidated financial statements in conformity with GAAP requires management to make certain estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported results of operations during the reporting period. Examples of significant estimates include allowance for doubtful accounts, deferred tax valuation allowance, fair value of employee and nonemployee stock based awards, valuation of goodwill and other long-lived assets, and cash flow projections. Actual results could differ materially from those estimates. Reclassifications Certain items previously reported in the consolidated financial statement captions have been reclassified to conform to the current financial statement presentation with no effect on the Company’s consolidated financial position or results of operations. These reclassifications did not affect total assets, total liabilities, or stockholders’ equity. Reclassifications were made to the Consolidated Statements of Operations and Consolidated Statements of Cash Flows for the three months ended March 31, 2015, to reflect the same facilities in discontinued operations for both periods presented. In addition, reclassifications were made to the Consolidated Balance Sheet as of March 31, 2016 and December 31, 2015 to reflect the netting of deferred financing costs with the respective debt facility. Revenue Recognition Rental Revenues. The Company's triple-net leases provide for periodic and determinable increases in rent. The Company recognizes rental revenues under these leases on a straight-line basis over the applicable lease term when collectibility is reasonably assured. Recognizing rental income on a straight-line basis generally results in recognized revenues during the first half of a lease term exceeding the cash amounts contractually due from our tenants, creating a straight-line rent receivable that is included in other assets on our consolidated balance sheets. Rent revenues for nine facilities in Arkansas and three facilities in Georgia are recorded on a cash basis. Management Fee Revenues and Other Revenues. The Company recognizes management fee revenues as services are provided. Further, the Company recognizes interest income from lease inducements receivables as other revenues. Allowances. The Company assesses the collectibility of our rent receivables, including straight-line rent receivables. The Company bases its assessment of the collectibility of rent receivables on several factors, including, payment history, the financial strength of the tenant and any guarantors, the value of the underlying collateral, and current economic conditions. If the Company's evaluation of these factors indicates it is probable that the Company will be unable to receive the rent payments, the Company provides an allowance against the recognized rent receivable asset for the portion that we estimate may not be recovered. If the Company changes its assumptions or estimates regarding the collectibility of future rent payments required by a lease, the Company may adjust its reserve to increase or reduce the rental revenue recognized in the period the Company makes such change in its assumptions or estimates. As of March 31, 2016 and December 31, 2015, the Company allowed for approximately $11.3 million and $12.5 million, respectfully, of gross patient care related receivables primarily from our operations before completion of our Transition. Allowance for patient care receivables are estimated based on an aged bucket method incorporating different payor types. Any changes in patient care receivable allowances will be recognized as a component of discontinued operations. All patient care receivables exceeding 365 days are fully allowed at March 31, 2016 and December 31, 2015. Accounts receivable, net totaled $8.6 million at March 31, 2016 and $8.8 million at December 31, 2015 of which $6.5 million and $8.0 million, respectively, related to patient care receivables from our legacy operations. Fair Value Measurements and Financial Instruments Accounting guidance establishes a three-level valuation hierarchy for disclosure of fair value measurements. The valuation hierarchy is based upon the transparency of inputs to the valuation of an asset or liability as of the measurement date. The categorization of a measurement within the valuation hierarchy is based upon the lowest level of input that is significant to the fair value measurement. The three levels are defined as follows: Level 1— Quoted market prices in active markets for identical assets or liabilities Level 2— Other observable market-based inputs or unobservable inputs that are corroborated by market data Level 3— Significant unobservable inputs The respective carrying value of certain financial instruments of the Company approximates their fair value. These instruments include cash and cash equivalents, restricted cash and investments, accounts receivable, notes receivable, and accounts payable. Fair values were assumed to approximate carrying values for these financial instruments since they are short-term in nature and their carrying amounts approximate fair values, they are receivable or payable on demand, or the interest rates earned and/or paid approximate current market rates. Recent Accounting Pronouncements Except for rules and interpretive releases of the SEC under authority of federal securities laws, the Financial Accounting Standards Board ("FASB") Accounting Standards Codification ("ASC") is the sole source of authoritative GAAP literature recognized by the FASB and applicable to the Company. The Company has reviewed the FASB accounting pronouncements and Accounting Standards Update ("ASU") interpretations that have effectiveness dates during the periods reported and in future periods. In May 2014, the FASB issued ASU 2014-09 guidance which requires revenue to be recognized in an amount that reflects the consideration expected to be received in exchange for those goods and services. The new standard requires the disclosure of sufficient quantitative and qualitative information for financial statement users to understand the nature, amount, timing and uncertainty of revenue and associated cash flows arising from contracts with customers. The new guidance does not affect the recognition of revenue from leases. In August 2015, the FASB delayed the effective date of the new revenue standard by one year. As a result, this new revenue standard is effective for annual reporting periods beginning after December 15, 2017, including interim periods within those reporting periods. Early application is permitted under the original effective date of fiscal years, and interim periods within those fiscal years, beginning after December 15, 2016. The Company is currently evaluating the impact on the Company's financial position and results of operations and related disclosures. In August 2014, the FASB issued ASU 2014-15, which provides guidance regarding an entity’s ability to continue as a going concern, which requires management to assess a company’s ability to continue as a going concern and to provide related footnote disclosures in certain circumstances. Before this new standard, there was minimal guidance in GAAP specific to going concern. Under the new standard, disclosures are required when conditions give rise to substantial doubt about a company’s ability to continue as a going concern within one year from the financial statement issuance date. The guidance is effective for annual reporting periods beginning after December 15, 2016, including interim periods within that reporting period, with early adoption permitted. The Company has concluded that changes in its accounting required by this new guidance will not materially impact the Company's financial position or results of operations and related disclosures. In February 2015, the FASB issued ASU 2015-02, which which changes the way reporting enterprises evaluate whether (a) they should consolidate limited partnerships and similar entities, (b) fees paid to a decision maker or service provider are variable interests in a variable interest entity (VIE), and (c) variable interests in a VIE held by related parties of the reporting enterprise require the reporting enterprise to consolidate the VIE. It also eliminates the VIE consolidation model based on majority exposure to variability that applied to certain investment companies and similar entities. This consolidation guidance is effective for public business entities for annual and interim periods beginning after December 15, 2015. The adoption of this guidance did not have a material impact on the Company's consolidated financial condition, results of operations or cash flows. In April 2015, the FASB issued ASU 2015-03, which requires debt issuance costs to be presented as a direct reduction from the carrying amount of the debt liability, consistent with the presentation of debt discounts. The amortization of debt issuance costs will be reported as interest expense. The new standard is to be applied on a retrospective basis and reported as a change in an accounting principle. In August 2015, the FASB released clarifying guidance for debt issuance costs related to line-of-credit arrangements, which permits debt issuance costs to be presented as an asset, regardless of whether there are any outstanding borrowings on the line-of-credit arrangement. Debt issuance costs associated with a line of credit can be amortized ratably over the term of the line-of-credit arrangement. This standard is effective for annual reporting periods beginning after December 15, 2015, including interim periods within that reporting period. Early adoption is permitted for financial statements that have not been previously issued. The Company adopted in the first quarter of 2016 and has retroactively applied to the December 31, 2015 balance sheet presentation. This change represents a change in accounting principle. The amount of deferred financing costs reclassified against long-term debt was $2.5 million and $2.7 million for March 31, 2016 and December 31, 2015, respectively. The adoption did not materially impact the Company's results of operations and related disclosures. In September 2015, the FASB issued ASU 2015-16, which requires that an acquirer in a business combination recognize adjustments to provisional amounts that are identified during the measurement period in the reporting period in which the adjustment amounts are determined. Under this guidance the acquirer recognizes, in the same period's financial statements, the effect on earnings of changes in depreciation, amortization, or other income effects, if any, as a result of the change to the provisional amounts, calculated as if the accounting had been completed at the acquisition date. New disclosures are required to present separately on the face of the income statement or disclose in the notes the portion of the amount recognized in current-period earnings by line item that would have been recognized in previous reporting periods if the adjustment to the provisional amounts had been recognized as of the acquisition date. This guidance is effective for annual reporting periods beginning after December 15, 2015, including interim periods within that reporting period. At adoption, the new guidance is to be applied prospectively to adjustments to provisional amounts that occur after the effective date with earlier application permitted for financial statements that have not been issued. The adoption of this guidance did not have a material impact on the Company's consolidated financial condition, results of operations or cash flows. In January 2016, the FASB issued ASU 2016-01 which provides revised accounting guidance related to the accounting for and reporting of financial instruments. This guidance significantly revises an entity’s accounting related to (i) the classification and measurement of investments in equity securities and (ii) the presentation of certain fair value changes for financial liabilities measured at fair value. It also amends certain disclosure requirements associated with the fair value of financial instruments. The ASU is effective for annual periods and interim periods within those annual periods beginning after December 15, 2017; earlier adoption is permitted. The adoption of this guidance is not expected to have a material impact on the Company's consolidated financial condition, results of operations or cash flows. In February 2016, the FASB issued ASU 2016-02 as a comprehensive new leases standard that amends various aspects of existing guidance for leases and requires additional disclosures about leasing arrangements. It will require companies to recognize lease assets and lease liabilities by lessees for those leases classified as operating leases under previous guidance, ASC 840, Leases. ASU 2016-02 creates a new Topic, ASC 842, Leases. This new Topic retains a distinction between finance leases and operating leases. The classification criteria for distinguishing between finance leases and operating leases are substantially similar to the classification criteria for distinguishing between capital leases and operating leases in the previous leases guidance. The ASU is effective for annual periods beginning after December 15, 2018, including interim periods within those fiscal years; earlier adoption is permitted. In the financial statements in which the ASU is first applied, leases shall be measured and recognized at the beginning of the earliest comparative period presented with an adjustment to equity. The Company is currently evaluating the impact of the adoption of this guidance on its consolidated financial condition, results of operations and cash flows. In March 2016, the FASB issued ASU 2016-09 with the intention to simplify aspects of the accounting for share-based payment transactions, including income tax impacts, classification on the statement of cash flows, and forfeitures. The ASU is effective for fiscal years and interim periods within those years beginning after December 15, 2016. The various amendments within the standard require different approaches to adoption of either retrospective, modified retrospective or prospective. Early adoption is permitted. The company is currently evaluating the potential impact of this standard as well as the as available transition methods. |
Earnings Per Share |
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Earnings Per Share [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
EARNINGS PER SHARE | EARNINGS PER SHARE Basic earnings per share is computed by dividing net income or loss attributable to common stockholders by the weighted-average number of shares of common stock outstanding during the period. Diluted earnings per share is similar to basic earnings per share except: (i) net income or loss is adjusted by the impact of the assumed conversion of convertible debt into shares of common stock; and (ii) the weighted-average number of shares of common stock outstanding includes potentially dilutive securities (such as options, warrants and additional shares of common stock issuable under convertible debt outstanding during the period) when such securities are not anti-dilutive. Potentially dilutive securities from options and warrants are calculated in accordance with the treasury stock method, which assumes that proceeds from the exercise of all options and warrants with exercise prices exceeding the average market value are used to repurchase common stock at market value. The incremental shares remaining after the proceeds are exhausted represent the potentially dilutive effect of the securities. Potentially dilutive securities from convertible debt are calculated based on the assumed issuance at the beginning of the period, as well as any adjustment to income that would result from their assumed issuance. For the three months ended March 31, 2016 and 2015, potentially dilutive securities of 4.6 million and 7.0 million, respectively, were excluded from the diluted income (loss) per share calculation because including them would have been anti-dilutive for those periods. The following tables provide a reconciliation of net income (loss) for continuing and discontinued operations and the number of shares of common stock used in the computation of both basic and diluted earnings per share:
(a) Securities outstanding that were excluded from the computation, prior to the use of the treasury stock method, because they would have been anti-dilutive are as follows:
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Liquidity and Profitability |
3 Months Ended |
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Mar. 31, 2016 | |
LIQUIDITY AND PROFITABILITY | |
LIQUIDITY AND PROFITABILITY | LIQUIDITY AND PROFITABILITY Sources of Liquidity The Company continues to undertake measures to improve its operations and streamline cost infrastructure in connection with its new business model, including: (i) increasing future minimum lease revenue; (ii) refinancing or repaying current maturities to reduce interest costs and reducing mandatory principal repayments through refinancing transactions with HUD or other lending sources; and (iii) reducing general and administrative expenses. At March 31, 2016, the Company had $2.3 million in cash and cash equivalents as well as restricted cash of $8.9 million. Over the next twelve months, the Company anticipates both access to and receipt of several sources of liquidity. At March 31, 2016, the Company had two office buildings held for sale. The Company completed the sale of one of its office buildings on April 25, 2016 for $0.7 million and expects to complete the sale of its second office building by the end of the second quarter of 2016. The office building sold on April 25, 2016 had debt of approximately $0.9 million and the remaining office building, which is unencumbered, is contracted to sell at $0.2 million. The Company anticipates that the sale of the two office buildings combined will approximate the related debt obligations. The Company routinely has discussions with existing and new potential lenders to refinance current debt on a long-term basis and, in recent periods, has refinanced short-term acquisition-related debt with traditional long-term mortgage notes, some of which have been executed under government guaranteed lending programs. On July 21, 2015, the Company entered into separate At Market Issuance Sales Agreements (together, the “Sales Agreements”) with each of MLV & Co. LLC and JMP Securities LLC (each, an “Agent” and together, the “Agents”), pursuant to which the Company may offer and sell, from time to time, up to 800,000 shares of the Company’s 10.875% Series A Cumulative Redeemable Preferred Stock, no par value per share and liquidation preference of $25.00 per share (the "Series A Preferred Stock"), through an “at-the-market” offering program ("ATM"). As of March 31, 2016, the Company sold 500,600 shares of Series A Preferred Stock under the ATM, generating net proceeds to the Company of approximately $10.4 million (see Note 11 - Common and Preferred Stock). On March 24, 2016, the Company received a commitment to refinance the Bentonville, Heritage Park and River Valley Credit Facility, the Little Rock Credit Facility, and the Northridge, Woodland Hills and Abington Credit Facility for a combined total of $25.4 million of debt, subject to definitive documentation and certain closing conditions. On March 24, 2016, the Company also obtained a lender commitment to extend the maturity date of the Georgetown and Sumter Credit Facility totaling $9.1 million from September 2016 to June 2017 subject to definitive documentation and certain closing conditions. On March 29, 2016, the Company obtained a lender commitment to extend the maturity date of the Quail Creek Credit Facility totaling $5.0 million from September 2016 to September 2018 subject to definitive documentation and certain closing conditions. On May 10, 2016, the Company executed a purchase and sale agreement to sell nine of its facilities in Arkansas for a total sales price of $55.0 million. At March 31, 2016, total outstanding debt on those facilities was approximately $30.2 million, net of restricted cash deposits. All such debt and restricted cash was current at March 31, 2016. The Company anticipates cash inflows associated with the sale of such facilities to exceed related obligations by approximately $21.8 million, less routine closing costs and a seller note of $3.0 million. Cash Requirements At March 31, 2016, the Company had $118.4 million in indebtedness of which the current portion is $47.9 million. This current portion is comprised of the following components: (i) debt of held for sale entities of approximately $0.9 million, primarily senior debt - bond and mortgage indebtedness; and (ii) remaining debt of approximately $46.9 million which includes senior debt - mortgage indebtedness (for a complete debt listing see Note 9 - Notes Payable and Other Debt). As indicated previously, the Company routinely has ongoing discussions with existing and potential new lenders to refinance current debt on a longer term basis and, in recent periods, has refinanced shorter term acquisition debt with traditional longer term mortgage notes, some of which have been executed under government guaranteed lending programs. The Company anticipates, for the next twelve months, net principal disbursements of approximately $42.9 million (including approximately $1.7 million of payments on shorter term vendor notes, $2.7 million of routine debt service amortization, $0.9 million of the sale of two office buildings, and $0.7 million payment of other debt) which is inclusive of anticipated proceeds on refinancing of approximately $36.9 million. On March 24, 2016, the Company received a lender commitment to refinance approximately $25.4 million and to extend $9.1 million of current maturities, subject to definitive documentation and certain closing conditions. On March 29, 2016, the Company received a lender commitment to extend approximately $5.0 million of current maturities, subject to definitive documentation and certain closing conditions. The Company anticipates operating cash requirements for the next twelve months as being substantially less than previous twelve months due to the Transition. Based on the described sources of liquidity, the Company expects sufficient funds for its operations and scheduled debt service, at least through the next twelve months. On a longer term basis, at March 31, 2016, the Company has approximately $60.4 million of debt maturities due over the next two year period ending March 31, 2018. These debt maturities include $9.2 million of convertible promissory notes, which are convertible into shares of the common stock. The Company has been successful in recent years in raising new equity capital and believes based on recent discussions that these markets will continue to be available for raising capital in the future. The Company believes its long-term liquidity needs will be satisfied by these same sources, as well as borrowings as required to refinance indebtedness. The Company has absorbed negative cash flows from operations in the past, including the three months ended March 31, 2016, but anticipates a reversal to a positive cash flow from operations during the remainder of 2016. In order to satisfy the Company's capital needs, the Company seeks to: (i) continue improving operating results through its leasing and subleasing transactions executed with favorable terms and consistent and predictable cash flow; (ii) expand borrowing arrangements with certain lenders; (iii) refinance current debt where possible to obtain more favorable terms; (iv) potential sale of certain facilities; and (v) raise capital through the issuance of debt or equity securities. The Company anticipates that these actions, if successful, will provide the opportunity to maintain liquidity on a short and long-term basis, thereby permitting the Company to meet our operating and financing obligations for the next twelve months. However, there is no guarantee that such actions will be successful or that anticipated operating results of the Transition. If the Company is unable to expand existing borrowing agreements, refinance current debt, or raise capital through the issuance of securities, then the Company may be required to restructure its outstanding indebtedness, implement further cost reduction initiatives or sell assets. The Board has agreed to explore strategic alternatives for the Company which may affect the sources of liquidity and cash requirements of the Company. |
Restricted Cash |
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Restricted Cash and Investments [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
RESTRICTED CASH | RESTRICTED CASH The following table sets forth the Company’s various restricted cash, escrow deposits and related financial instruments:
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Intangible Assets and Goodwill |
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Goodwill and Intangible Assets Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
INTANGIBLE ASSETS AND GOODWILL | INTANGIBLE ASSETS AND GOODWILL Intangible assets consist of the following:
Amortization expense for the CON included in property and equipment was approximately $0.3 million and $0.3 million for the three months ended March 31, 2016 and 2015, respectively. Amortization expense for lease rights was approximately $0.2 million and $0.2 million for the three months ended March 31, 2016 and 2015, respectively. Expected amortization expense for all definite lived intangibles for each of the years ended December 31, is as follows:
(a) Estimated amortization expense for the year ending December 31, 2016, includes only amortization to be recorded after March 31, 2016. The following table summarizes the carrying amount of goodwill:
The Company does not amortize indefinite lived intangibles, which consist of separable bed licenses, or goodwill. |
Property and Equipment |
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Property, Plant and Equipment [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
PROPERTY AND EQUIPMENT | PROPERTY AND EQUIPMENT The following table sets forth the Company’s property and equipment:
Buildings and improvements includes the capitalization of costs incurred for the respective certificates of need (the "CON"). For additional information on the CON amortization, see Note 6 - Intangible Assets and Goodwill. For the three months ended March 31, 2016 and 2015, total depreciation and amortization expense was $1.7 million and $1.7 million, respectively. Total depreciation and amortization expense excludes $0.1 million in the three months ended March 31, 2015 that is recognized in Loss from Discontinued Operations, net of tax. No amount was excluded for the three months ended March 31, 2016. |
Leases |
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Leases [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
LEASES | LEASES Operating Leases The Company leases a total of eleven skilled nursing facilities from unaffiliated owners under non-cancelable leases, most of which have rent escalation clauses and provisions for payments of real estate taxes, insurance and maintenance costs. Each of the skilled nursing facilities that are leased by the Company are subleased to and operated by third-party operators. The Company also leases certain office space located in Atlanta, Georgia. The Company has also entered into lease agreements for various equipment previously used in the facilities. These leases are included in future minimum lease payments below. As of March 31, 2016, the Company is in compliance with all operating lease financial and administrative covenants. Future Minimum Lease Payments Future minimum lease payments for each of the next five years ending December 31, are as follows:
(a) Estimated minimum lease payments for the year ending December 31, 2016, include only payments to be recorded after March 31, 2016. Leased and Subleased Facilities to Third-Party Operators As a result of the completion of the Transition, the Company leases or subleases to third-party operators 35 facilities (24 owned by us and 11 leased to us) on a triple net basis, meaning that the lessee (i.e., the new third-party operator of the property) is obligated under the lease or sublease, as applicable, for all costs of operating the property, including insurance, taxes and facility maintenance, as well as the lease or sublease payments, as applicable. Termination of Arkansas Leases. Until February 3, 2016, the Company subleased through its subsidiaries (the “Aria Sublessors”) nine facilities located in Arkansas (the “Arkansas Facilities”) to affiliates (the “Aria Sublessees”) of Aria Health Group, LLC (“Aria”) pursuant to separate sublease agreements (the “Aria Subleases”). Effective February 3, 2016, the Company terminated the applicable Aria Sublease due to the applicable Aria Sublessee’s failure to pay rent pursuant to the terms of such sublease. The term of each Aria Sublease was approximately fifteen (15) years, and the annual aggregate base and special rent payable to the Company under the Aria Subleases was approximately $5.1 million in the first year of such subleases and the base rent was subject to specified annual rent escalators. On July 17, 2015, the Company made a short-term loan to Highlands Arkansas Holdings, LLC, an affiliate of Aria (“HAH”), for working capital purposes, and, in connection therewith, HAH executed a promissory note (the “Note”) in favor of the Company. Since July 17, 2015, the Note has been amended from time to time and currently has an outstanding principal amount of $1.75 million and had a maturity date of December 31, 2015. The Company is currently seeking the repayment of the Note in accordance with its terms and expects full repayment. Lease of Arkansas Facilities. On February 5, 2016, nine wholly-owned subsidiaries of the Company (each, a “Skyline Lessor”) entered into a Master Lease Agreement (the “Skyline Lease”) pursuant to which each Skyline Lessor leases to Skyline Healthcare LLC (“Skyline”), or any affiliate of Skyline (the “Skyline Lessee”), one of the Arkansas Facilities. The term of the Skyline Lease commenced on April 1, 2016. The initial lease term of the Skyline Lease is fifteen (15) years with two (2) separate renewal terms of five (5) years each. The annual rent under the Skyline Lease in the first year will be $5.4 million, and such rent shall escalate at 2.5% each year during the initial term and any subsequent renewal terms. Skyline has guaranteed the obligations of its affiliates. In connection with the Skyline Lease, the Skyline Lessors entered into an Option Agreement, dated February 5, 2016, with Joseph Schwartz, the manager of Skyline, pursuant to which Mr. Schwartz, or an entity designated by Mr. Schwartz (the “Purchaser”), had an exclusive and irrevocable option to purchase the Arkansas Facilities at a purchase price of $55.0 million, which the Purchaser could exercise in accordance with such agreement until May 1, 2016. The purchase price shall be paid by the Purchaser as $52.0 million in cash at closing with the balance of the purchase price to be evidenced by a promissory note executed by the Purchaser. The closing of such purchase and sale shall take place on or before August 1, 2016 on a date designated by the Purchaser to the Skyline Lessors in writing. The Purchaser has delivered notice of its intent to exercise the purchase option and a definitive agreement with respect to such purchase has been executed (see Note 16 - Subsequent Events). New Beginnings. On January 22, 2016, New Beginnings Care, LLC and its affiliated debtors (collectively, “New Beginnings”) filed petitions to reorganize their finances under the Bankruptcy Code. New Beginnings operates the Savannah Beach, Oceanside and Jeffersonville facilities pursuant to a master lease dated November 3, 2015 with the Company. The Jeffersonville facility was decertified by the Center for Medicare Services (“CMS”) in February 2016 for deficiencies related to its operations and maintenance of the facility. Since that time, New Beginnings has been paying partial rent for the Oceanside and Savannah Beach facilities but not for the Jeffersonville Facility. On March 4, 2016, due to defaults by New Beginnings, the Company petitioned the Bankruptcy Court to lift the automatic stay to enable the Company to regain possession of the three facilities. Prior to the court ruling on the motion, the Company entered into a consent order (the “Consent Order”) with New Beginnings, the debtors’ creditors’ committee, which represents the unsecured creditors in the proceedings, and Gemino Financial (the debtors’ secured lender), in which the Company agreed to give the creditors’ committee until June 4, 2016 to sell all of New Beginnings’ assets including the leasehold interest and personal property for the Company’s three facilities. The Consent Order further provides that if the creditors’ committee is unable to sell the assets by such date, the automatic stay will be lifted and the Company will be allowed to reclaim possession of the three facilities. The court signed the Consent Order on May 9, 2016, and it was entered on the docket on May 10, 2016. The Oceanside facility was cited for deficiencies during a State survey on November 6, 2015 and had six months, or until May 5, 2016, to meet the pertinent provisions of Section 1819 and 1919 of the Social Security Act and be deemed in substantial compliance with each of the requirements for long term care facilities established by the Secretary of Health and Human Services in 42 CFR section 483.1 et seq. (collectively, “CMS Requirements”) with regard to the facility. As of May 3, 2016, out of concern that decertification of Oceanside was imminent, New Beginnings obtained a preliminary injunction against the Georgia Department of Community Health and the United States Department of Health and Human Services Center for Medicare and Medicaid Services and their officers, agents, servants, employees and attorneys prohibiting the termination of the facility’s Medicare and Medicaid provider agreements until the earlier of (i) July 1, 2016, or (ii) the completion of the administrative review process pursuant to 42 U.S.C. § 405(g), or (iii) the full administration of the bankruptcy estate pursuant to Title 11 of the United States Code, in part in order to give New Beginnings time to market its leasehold interests and assets to potential buyers pursuant to the Consent Order. On May 9, 2016, a Notice of Involuntary Termination from CMS was issued to New Beginnings indicating that its operations at the Oceanside facility were not in substantial compliance with CMS Requirements and that its provider agreements with CMS were terminated as of such date. The letter noted that the effectuation of the involuntary termination is stayed by the terms of the Bankruptcy Court’s order. The Company is providing support to New Beginnings in an effort to clear the deficiencies raised by CMS and to persuade CMS to rescind its decertification of the Oceanside facility. To date, New Beginnings has neither affirmed nor rejected the Master Lease entered into on November 3, 2015 with respect to the Jeffersonville, Oceanside, and Savannah Beach facilities. The Company is in discussions with New Beginnings and other potential operators about renting such facilities. Future minimum lease receivables from the Company’s facilities leased and subleased to third party operators for each of the next five years ending December 31, are as follows:
(a) Estimated minimum lease receivables for the year ending December 31, 2016, include only payments to be received after March 31, 2016. For further details regarding the Company's leased and subleased facilities to third-party operators, see Part II, Item 8, Notes to Consolidated Financial Statements, Note 7 - Leases included in the Annual Report. |
Accrued Expenses |
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Payables and Accruals [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
ACCRUED EXPENSES | ACCRUED EXPENSES Accrued expenses consist of the following:
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Notes Payable and Other Debt |
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Debt Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
NOTES PAYABLE AND OTHER DEBT | NOTES PAYABLE AND OTHER DEBT See Part II, Item 8, Notes to Consolidated Financial Statements, Note 9 - Notes Payable and Other Debt included in the Annual Report for a detailed description of all the Company's debt facilities. Notes payable and other debt consists of the following (a):
The following is a detailed listing of the debt facilities that comprise each of the above categories:
The Company was in compliance with all applicable debt covenants as of March 31, 2016. Scheduled Maturities The schedule below summarizes the scheduled maturities for the twelve months ended March 31 of the respective year (not adjusted for commitments to refinance or extend the maturities of debt as noted above). The 2017 maturities include $1.0 million related to the outstanding loan of one of the two office buildings located in Roswell, Georgia which is classified in liabilities of disposal group held for sale. In April 2016, the office building was sold and the related outstanding debt was repaid in full (see Note 16 - Subsequent Events).
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Discontinued Operations |
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Discontinued Operations and Disposal Groups [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
DISCONTINUED OPERATIONS | DISCONTINUED OPERATIONS For the discontinued operations, the patient care revenue, related cost of services, and facility rental expense prior to the commencement of subleasing are classified in the activities below. For a historical listing and description of the Company's discontinued entities, see Part II, Item 8, Notes to Consolidated Financial Statements, Note 11 - Discontinued Operations included in the Annual Report. The following table summarizes certain activity of discontinued operations for the three months ended March 31, 2016 and 2015:
At March 31, 2016, the Company had two office buildings held for sale. The Company completed the sale of one of these buildings on April 25, 2016 for $0.7 million. Debt obligations on the transaction exceeded proceeds by $0.2 million. The other office building is unencumbered and under contract for a sales price of $0.2 million. The Company expects to complete the sale of the second office building in the second quarter of 2016. On February 9, 2016, the Company sold an office building in Arkansas for $0.3 million. The office space was unencumbered. Assets and liabilities of the disposal group held for sale at March 31, 2016 and December 31, 2015, are as follows:
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Stock Based Compensation |
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Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
STOCK BASED COMPENSATION | STOCK BASED COMPENSATION For the three months ended March 31, 2016 and 2015, the Company recognized stock-based compensation expense as follows:
Stock Incentive Plan The Company has one active employee stock option plan:
The 2011 Stock Incentive Plan permits the granting of incentive or nonqualified stock options and the granting of restricted stock. The plan is administered by the Board which has the authority to determine the employees to whom awards will be made, the amounts of the awards, and the other terms and conditions of the awards. The number of securities remaining available for future issuance is 634,384. In addition to the Company's stock option plan, the Company grants stock warrants to officers, directors, employees and certain consultants to the Company from time to time as determined by the Board and, when appropriate, the Compensation Committee of the Board. The assumptions used in calculating the fair value of employee common stock options and warrants granted during the three months ended March 31, 2016 and March 31, 2015, using the Black-Scholes-Merton option-pricing model, are set forth in the following table:
Common Stock Options The following table summarizes the Company's common stock option activity for the three months ended March 31, 2016:
On January 27, 2016, the Board granted 77,186 and 64,321 common stock options to its Chief Executive Officer and Chief Financial Officer, respectively, as part of their 2015 performance bonuses. The options vested immediately upon grant and are exercisable at $2.07 per share. The weighted-average grant date fair value for the options granted was approximately $0.78 per option. The following table summarizes the common stock options outstanding and exercisable as of March 31, 2016:
For options unvested at March 31, 2016, $0.1 million in compensation expense will be recognized over the next 1.7 years. Common Stock Warrants The following table summarizes the Company's common stock warrant activity for the three months ended March 31, 2016:
The following table summarizes the common stock warrants outstanding and exercisable as of March 31, 2016:
For warrants unvested at March 31, 2016, $0.4 million in compensation expense will be recognized over the next 1.7 years. Restricted Stock The following table summarizes the Company's restricted stock activity for the three months ended March 31, 2016:
On January 1, 2016, the Company granted to its Chief Accounting Officer and certain employees 7,792 and 26,622 shares of restricted stock, respectively, with a weighted average grant-date fair value of $2.49 per share, as part of their 2015 performance bonuses. The restricted shares vest as to one-third of the total shares granted on December 31, 2016, December 31, 2017 and December 31, 2018. On January 27, 2016, the Board granted to the Company's Chief Executive Officer and Chief Financial Officer 28,986 and 24,155 shares of restricted stock, respectively, with a weighted average grant-date fair value of $2.07 per share, as part of their 2015 performance bonuses. The restricted shares vested immediately upon grant. On January 27, 2016, three non-management members of the Board were each granted 36,232 shares of restricted stock with a weighted average grant-date fair value of $2.07 per share, as compensation for their services as Directors. The restricted shares vest on the following schedule: (i) 12,077 shares on January 27, 2017; (ii) 12,077 shares of January 27, 2018; and (iii) 12,078 shares on January 27, 2019. For restricted stock unvested at March 31, 2016, $1.2 million in compensation expense will be recognized over the next 2.6 years. |
Common and Preferred Stock |
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Equity [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
COMMON AND PREFERRED STOCK | COMMON AND PREFERRED STOCK Common Stock Repurchase Activity In the three months ended March 31, 2016, the Company repurchased 150,000 shares of common stock pursuant to the share repurchase program announced on November 12, 2015 (the “Repurchase Program”) at an average purchase price of approximately $2.05 per share, exclusive of commissions and related fees. Pursuant to the Repurchase Program, the Company is authorized to repurchase up to 500,000 shares of its outstanding common stock during a twelve-month period. Share repurchases may be made from time to time through open market transactions, block trades or privately negotiated transactions and are subject to market conditions, as well as corporate, regulatory and other considerations. The Repurchase Program may be suspended or discontinued at any time. As of March 31, 2016, a maximum 350,000 shares may yet be purchased under the Repurchase Program. Preferred Stock The liquidation preference of the Company's Series A Preferred Stock is $25 per share. Cumulative dividends accrue and are paid in the amount of $2.72 per share each year, which is equivalent to 10.875% of the $25 liquidation preference per share. The dividend rate may increase under certain circumstances. Holders of the Series A Preferred Stock generally have no voting rights but have limited voting rights under certain circumstances. The Company may not redeem the Series A Preferred Stock before December 1, 2017, except the Company is required to redeem the Series A Preferred Stock following a "Change of Control," as defined in the Company's Articles of Incorporation. On and after December 1, 2017, the Company may, at its option, redeem the Series A Preferred Stock, in whole or in part, by paying $25 per share, plus any accrued and unpaid dividends to the redemption date. The change-in-control provision requires the Series A Preferred Stock to be classified as temporary equity because, although deemed a remote possibility, a purchaser could acquire a majority of the voting power of the outstanding common stock without company approval, thereby triggering redemption. FASB ASC Topic 480-10-S99-3A, SEC Staff Announcement: Classification and Measurement of Redeemable Securities, requires classification outside of permanent equity for redeemable instruments for which the redemption triggers are outside of the issuer's control. The assessment of whether the redemption of an equity security could occur outside of the issuer's control is required to be made without regard to the probability of the event or events that may result in the instrument becoming redeemable. Preferred Stock Offerings and Dividends The following table summarizes the shares of preferred stock issued by the Company and net proceeds received from issuance and dividends paid on the Company's preferred stock for the three months ended March 31, 2016:
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Variable Interest Entities |
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Mar. 31, 2016 | |
Variable Interest Entity, Consolidated, Carrying Amount, Assets and Liabilities, Net [Abstract] | |
VARIABLE INTEREST ENTITIES | VARIABLE INTEREST ENTITIES Non-consolidated Variable Interest Entities Aria. On April 30, 2015, the Company entered into a lease inducement (the "Aria Lease Inducement") with Aria Health Consulting, LLC with respect to the Aria Subleases. The Aria Lease Inducement provided for a one-time payment from the Company to Aria Health Consulting, LLC equal to $2.0 million minus the security deposits and first month's base and special rent for all Aria Sublessees. On April 30, 2015, in connection with the Aria Lease Inducement, eight sublease agreements with Aria Sublessees were amended to, among other things, provide that the Aria Sublessees shall, collectively, pay to the Aria Sublessors special rent in the amount of $29,500 per month payable in advance on or before the first day of each month (except for the first special rent payment, which was subtracted from the lease inducement fee paid by the Company under the Aria Lease Inducement). On July 17, 2015, the Company made a short-term loan to HAH, for working capital purposes, and, in connection therewith, HAH executed the Note in favor of the Company. Since July 17, 2015, the Note has been amended from time to time and currently has an outstanding principal amount of $1.75 million and had a maturity date of December 31, 2015. On October 6, 2015, HAH and the Company entered into a security agreement, whereby HAH granted the Company a security interest in all accounts arising from the business of HAH and the Aria Sublessees, and all rights to payment from patients, residents, private insurers and others arising from the business of HAH and the Aria Sublessees (including any proceeds thereof), as security for payment of the Note, as amended, and certain rent and security deposit obligations of the Aria Sublessees under Aria Subleases. The Company is currently seeking the repayment of the Note in accordance with its terms and expects full repayment. The Aria Lease Inducement and Note entered into by the Company create a variable interest that may absorb some or all of a variable interest entity's ("VIE") expected losses. The Company does not consolidate the operating activities of the Aria Sublessees as the Company does not have the power to direct the activities that most significantly impact the VIE’s economic performance. Effective February 3, 2016, each Aria Sublessor terminated the applicable Aria Sublease due to the applicable Aria Sublessee’s failure to pay rent pursuant to the terms of such sublease. Beacon. On August 1, 2015, the Company entered into a Lease Inducement Fee Agreement with certain affiliates of Beacon Health Management, LLC ("Beacon"), pursuant to which the Company paid a fee of $0.6 million as a lease inducement for certain affiliates of Beacon (the "Beacon Sublessees") to enter into sublease agreements and to commence such subleases and transfer operations thereunder. The inducement fee was paid net of certain other fees and costs owed by the affiliates of, including the first month of base rent for all of the Beacon facilities and the first month of special rent pertaining to the four of such facilities. On August 1, 2015, the Company made a short-term loan to certain affiliates of Beacon (collectively, the "Beacon Affiliates") and, in connection therewith, Beacon Affiliates executed a promissory note maturing on May 31, 2016 in the amount $0.6 million (the "Beacon Note"), as amended, in favor of the Company. Interest accrues on the unpaid principal balance of the note at a rate of 18% per annum. Until all amounts due and owing under the note have been paid, the Beacon Sublessees will not pledge, as security, any of the accounts receivable relating to the respective facilities that such entities sublease from affiliates of the Company. As of March 31, 2016, the principal amount outstanding on the Beacon Note was $0.6 million. The Beacon Lease Inducement and Beacon Note entered into by the Company create a variable interest that may absorb some or all of a VIE’s expected losses. The Company does not consolidate the operating activities of the Beacon Sublessees as the Company does not have the power to direct the activities that most significantly impact the VIE’s economic performance. |
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3 Months Ended |
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Mar. 31, 2016 | |
Commitments and Contingencies Disclosure [Abstract] | |
COMMITMENTS AND CONTINGENCIES | COMMITMENTS AND CONTINGENCIES Regulatory Matters Laws and regulations governing federal Medicare and state Medicaid programs are complex and subject to interpretation. Compliance with such laws and regulations can be subject to future governmental review and interpretation as well as significant regulatory action including fines, penalties, and exclusion from certain governmental programs. In March 2016, the Centers for Medicare and Medicaid Services ("CMS") decertified the Jeffersonville facility meaning the facility can no longer accept Medicare or Medicaid patients. The operator is considering appealing the decision by CMS. The Company believes that it is in compliance in all material respects with all applicable laws and regulations. Legal Matters The Company is party to various legal actions and administrative proceedings and is subject to various claims arising in the ordinary course of business, including claims that the services the Company provided during the time it operated skilled nursing facilities resulted in injury or death to the residents of the Company's facilities and claims related to employment, staffing requirements and commercial matters. Although the Company intends to vigorously defend itself in these matters, there is no assurance that the outcomes of these matters will not have a material adverse effect on the Company's business, results of operations and financial condition. The Company previously operated, and the Company's tenants now operate, in an industry that is extremely regulated. As such, in the ordinary course of business, the Company's tenants are continuously subject to state and federal regulatory scrutiny, supervision and control. Such regulatory scrutiny often includes inquiries, investigations, examinations, audits, site visits and surveys, some of which are non-routine. In addition, we believe that there has been, and will continue to be, an increase in governmental investigations of long-term care providers, particularly in the area of Medicare/Medicaid false claims, as well as an increase in enforcement actions resulting from these investigations. Adverse determinations in legal proceedings or governmental investigations against or involving the Company, for the Company's prior operations, or the Company's tenants, whether currently asserted or arising in the future, could have a material adverse effect on the Company's business, results of operations and financial condition. The Company is a defendant in a purported class action lawsuit captioned Amy Cleveland et. al. v. APHR&R Nursing, LLC et al filed on March 4, 2015 with the Circuit Court of Pulaski County, Arkansas, 16th Division, 6th Circuit. On December 16, 2015, the Company's insurance carrier reached a settlement with each of the individual plaintiffs on behalf of the Company and all other defendants pursuant to which separate payments are to be made by the Company's carrier to the plaintiffs. The individual settlements are contingent on approval by the probate courts having jurisdiction over the deceased plaintiffs' respective estates, if applicable. As of March 31, 2016, all but two of the individual settlement agreements had been approved and the settlement consideration paid to the plaintiffs. |
Related Party Transactions |
3 Months Ended |
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Mar. 31, 2016 | |
Related Party Transactions [Abstract] | |
RELATED PARTY TRANSACTIONS | RELATED PARTY TRANSACTIONS Personal Guarantor on Loan Agreements Christopher Brogdon, a former director of the Company and a greater than 5% beneficial owner of the common stock, serves as personal guarantor on certain loan agreements, entered into by the Company prior to 2015, related to the following properties: (i) one of the two office buildings located in Roswell, Georgia; (ii) College Park, a 95-bed skilled nursing facility located in College Park, Georgia; (iii) Attalla, a 182-bed skilled nursing facility located in Attalla, Alabama; and (iv) Coosa Valley, 122-bed skilled nursing facility located in Glencoe, Alabama. At March 31, 2016, the total outstanding principal owed under the loans was approximately $17.5 million. Consulting Agreements The Company had a Consulting Agreement (as amended, the "Consulting Agreement") with Mr. Brogdon pursuant to which Mr. Brogdon was compensated by the Company for providing consulting services related to the acquisition and financing of skilled nursing facilities. On March 21, 2016, the Company and Mr. Brogdon entered into a letter agreement whereby the Company and Mr. Brogdon agreed that the Consulting Agreement was terminated as of November 20, 2015. As of March 31, 2016, the Company had an outstanding balance of $0.3 million receivable from Mr. Brogdon for a prior promissory note. For further details, see Part II, Item 8, Notes to Consolidated Financial Statements, Note 18 - Related Party Transactions included in the Annual Report. |
Subsequent Events |
3 Months Ended |
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Mar. 31, 2016 | |
Subsequent Events [Abstract] | |
SUBSEQUENT EVENTS | SUBSEQUENT EVENTS The Company has evaluated all subsequent events through the date the consolidated financial statements were issued and filed with the SEC. The following is a summary of the material subsequent events. Office Building Sale On April 25, 2016, the Company completed the sale of one of its office buildings located in Roswell, Georgia for $0.7 million. The Company’s debt obligations with respect to the building exceeded the proceeds of the sale by $0.2 million (see Note 15 - Related Party Transactions). Arkansas Facilities Sale Agreement As described previously, on April 1, 2016, the Skyline Lessors entered into the Skyline Lease pursuant to which each Skyline Lessor leases one of the Arkansas Facilities to the Skyline Lessee (see Note 7 - Leases). In connection with the Skyline Lease, the Skyline Lessors entered into an Option Agreement, dated February 5, 2016, with Joseph Schwartz, the manager of Skyline, pursuant to which the Purchaser had an exclusive and irrevocable option to purchase the Arkansas Facilities at a purchase price of $55.0 million, which the Purchaser could exercise in accordance with such agreement until May 1, 2016. Pursuant to such purchase option, the purchase price shall be paid by the Purchaser as $52.0 million in cash at closing with the balance of the purchase price to evidenced by a promissory note executed by the Purchaser. On April 22, 2016, the Purchaser delivered notice to the Company of its intent to exercise its option to purchase the Arkansas Facilities. Pursuant to such purchase option, on May 10, 2016, the Skyline Lessors and the Purchaser entered into a Purchase and Sale Agreement (the “Purchase Agreement”) whereby the Skyline Lessors agreed to sell, and the Purchaser agreed to buy, the Arkansas Facilities, together with all improvements, fixtures, furniture and equipment pertaining to such facilities (except for certain leased business equipment) and the Skyline Lessors’ intangible assets (including intellectual property) relating to the operation of the nursing home business at such facilities, for an aggregate purchase price of $55.0 million, subject to the terms and conditions set forth in the Purchase Agreement The purchase price consists of: (i) a deposit of $1.0 million deposited by the Purchaser with an escrow agent at the time of the Purchaser’s exercise of the purchase option; (ii) cash consideration of $51.0 million; and (iii) a promissory note from the Purchaser in favor of the Skyline Lessors with a principal amount of $3,000,000, to be executed and delivered at closing (the “Skyline Note”). The Skyline Note shall be paid in twenty-four (24) equal monthly installments of interest only at the rate of ten percent (10%) per annum, with the principal balance to be due and payable in full on August 1, 2018. The Skyline Note shall be personally guaranteed by Joseph Schwartz. The sale of the Arkansas Facilities is subject to customary conditions and termination rights for transactions of this type. The closing of the transaction is required to occur on or before August 1, 2016. The Skyline Lease shall remain in full force and effect through the closing date and, upon the closing, the Skyline Lease shall either terminate or be assigned to the Purchaser’s entities, at the Purchaser’s option. If the closing does not occur, the Skyline Lease shall remain in full force and effect in accordance with its terms. Notice of Non-Compliance from NYSE MKT On April 18, 2016, the Company received notice from NYSE Regulation, Inc. that it is not in compliance with certain NYSE MKT (the “NYSE MKT”) continued listing standards relating to stockholders’ equity. Specifically, the Company is not in compliance with Section 1003(a)(i) (requiring stockholders’ equity of $2.0 million or more if an issuer has reported losses from continuing operations and/or net losses in two of its three most recent fiscal years), Section 1003(a)(ii) (requiring stockholders’ equity of $4.0 million or more if an issuer has reported losses from continuing operations and/or net losses in three of its four most recent fiscal years) and Section 1003(a)(iii) (requiring stockholders’ equity of $6.0 million or more if an issuer has reported losses from continuing operations and/or net losses in its five most recent fiscal years) of the NYSE MKT Company Guide (the “Company Guide”) because the Company reported a stockholders’ deficit of $23.8 million as of December 31, 2015 and net losses for the last five (5) fiscal years. As a result, the Company has become subject to the procedures and requirements of Section 1009 of the Company Guide and is required to submit a plan by May 18, 2016 advising the NYSE MKT of the actions the Company has taken or will take to regain compliance with the NYSE MKT’s continued listing standards by October 18, 2017. The Company intends to submit a plan by the May 18, 2016 deadline. The Company’s common stock and Series A Preferred Stock will continue to be listed on the NYSE MKT while the Company seeks to regain compliance with the listing standards noted, subject to the Company’s compliance with other continued listing requirements. If the Company fails to submit a plan or if the Company’s plan is not accepted, then the NYSE MKT may commence delisting procedures. Furthermore, the NYSE MKT may commence delisting procedures, if it deems appropriate, if the Company does not regain compliance by October 18, 2017 or if the Company does not make progress consistent with its plan during the plan period. Decertification of Oceanside Facility On May 9, 2016, New Beginnings received a Notice of Involuntary Termination from CMS indicating that its operations at the Oceanside facility were not in substantial compliance with CMS Requirements and that its provider agreements with CMS are terminated as of such date. The letter noted that any decertification or further remedial action would be subject to the stays issued in the Bankruptcy Court’s order (see Note 7 - Leases, New Beginnings). |
Organization and Significant Accounting Policies (Policies) |
3 Months Ended |
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Mar. 31, 2016 | |
Accounting Policies [Abstract] | |
Basis of Presentation | Basis of Presentation The accompanying unaudited consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) for interim financial information and with the instructions to Form 10-Q and Rule 8-03 of Article 8 of Regulations S-X. Accordingly, they do not include all of the information and footnotes required by GAAP for complete financial statements. In the opinion of management, all adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation of the results of operations for the periods presented have been included. Operating results for the three months ended March 31, 2016 and 2015, are not necessarily indicative of the results that may be expected for the fiscal year. The balance sheet at December 31, 2015, has been derived from the audited consolidated financial statements at that date, but does not include all of the information and footnotes required by GAAP for complete financial statements. You should read the accompanying unaudited consolidated financial statements together with the historical consolidated financial statements of the Company for the year ended December 31, 2015, included in the Annual Report. |
Use of Estimates | Use of Estimates |
Reclassifications | Reclassifications Certain items previously reported in the consolidated financial statement captions have been reclassified to conform to the current financial statement presentation with no effect on the Company’s consolidated financial position or results of operations. These reclassifications did not affect total assets, total liabilities, or stockholders’ equity. Reclassifications were made to the Consolidated Statements of Operations and Consolidated Statements of Cash Flows for the three months ended March 31, 2015, to reflect the same facilities in discontinued operations for both periods presented. |
Revenue Recognition | Revenue Recognition Rental Revenues. The Company's triple-net leases provide for periodic and determinable increases in rent. The Company recognizes rental revenues under these leases on a straight-line basis over the applicable lease term when collectibility is reasonably assured. Recognizing rental income on a straight-line basis generally results in recognized revenues during the first half of a lease term exceeding the cash amounts contractually due from our tenants, creating a straight-line rent receivable that is included in other assets on our consolidated balance sheets. Rent revenues for nine facilities in Arkansas and three facilities in Georgia are recorded on a cash basis. Management Fee Revenues and Other Revenues. The Company recognizes management fee revenues as services are provided. Further, the Company recognizes interest income from lease inducements receivables as other revenues. Allowances. The Company assesses the collectibility of our rent receivables, including straight-line rent receivables. The Company bases its assessment of the collectibility of rent receivables on several factors, including, payment history, the financial strength of the tenant and any guarantors, the value of the underlying collateral, and current economic conditions. If the Company's evaluation of these factors indicates it is probable that the Company will be unable to receive the rent payments, the Company provides an allowance against the recognized rent receivable asset for the portion that we estimate may not be recovered. If the Company changes its assumptions or estimates regarding the collectibility of future rent payments required by a lease, the Company may adjust its reserve to increase or reduce the rental revenue recognized in the period the Company makes such change in its assumptions or estimates. As of March 31, 2016 and December 31, 2015, the Company allowed for approximately $11.3 million and $12.5 million, respectfully, of gross patient care related receivables primarily from our operations before completion of our Transition. Allowance for patient care receivables are estimated based on an aged bucket method incorporating different payor types. Any changes in patient care receivable allowances will be recognized as a component of discontinued operations. All patient care receivables exceeding 365 days are fully allowed at March 31, 2016 and December 31, 2015. Accounts receivable, net totaled $8.6 million at March 31, 2016 and $8.8 million at December 31, 2015 of which $6.5 million and $8.0 million, respectively, related to patient care receivables from our legacy operations. |
Fair Value Measurements and Financial Instruments | Fair Value Measurements and Financial Instruments Accounting guidance establishes a three-level valuation hierarchy for disclosure of fair value measurements. The valuation hierarchy is based upon the transparency of inputs to the valuation of an asset or liability as of the measurement date. The categorization of a measurement within the valuation hierarchy is based upon the lowest level of input that is significant to the fair value measurement. The three levels are defined as follows: Level 1— Quoted market prices in active markets for identical assets or liabilities Level 2— Other observable market-based inputs or unobservable inputs that are corroborated by market data Level 3— Significant unobservable inputs |
Recent Accounting Pronouncements | Recent Accounting Pronouncements Except for rules and interpretive releases of the SEC under authority of federal securities laws, the Financial Accounting Standards Board ("FASB") Accounting Standards Codification ("ASC") is the sole source of authoritative GAAP literature recognized by the FASB and applicable to the Company. The Company has reviewed the FASB accounting pronouncements and Accounting Standards Update ("ASU") interpretations that have effectiveness dates during the periods reported and in future periods. In May 2014, the FASB issued ASU 2014-09 guidance which requires revenue to be recognized in an amount that reflects the consideration expected to be received in exchange for those goods and services. The new standard requires the disclosure of sufficient quantitative and qualitative information for financial statement users to understand the nature, amount, timing and uncertainty of revenue and associated cash flows arising from contracts with customers. The new guidance does not affect the recognition of revenue from leases. In August 2015, the FASB delayed the effective date of the new revenue standard by one year. As a result, this new revenue standard is effective for annual reporting periods beginning after December 15, 2017, including interim periods within those reporting periods. Early application is permitted under the original effective date of fiscal years, and interim periods within those fiscal years, beginning after December 15, 2016. The Company is currently evaluating the impact on the Company's financial position and results of operations and related disclosures. In August 2014, the FASB issued ASU 2014-15, which provides guidance regarding an entity’s ability to continue as a going concern, which requires management to assess a company’s ability to continue as a going concern and to provide related footnote disclosures in certain circumstances. Before this new standard, there was minimal guidance in GAAP specific to going concern. Under the new standard, disclosures are required when conditions give rise to substantial doubt about a company’s ability to continue as a going concern within one year from the financial statement issuance date. The guidance is effective for annual reporting periods beginning after December 15, 2016, including interim periods within that reporting period, with early adoption permitted. The Company has concluded that changes in its accounting required by this new guidance will not materially impact the Company's financial position or results of operations and related disclosures. In February 2015, the FASB issued ASU 2015-02, which which changes the way reporting enterprises evaluate whether (a) they should consolidate limited partnerships and similar entities, (b) fees paid to a decision maker or service provider are variable interests in a variable interest entity (VIE), and (c) variable interests in a VIE held by related parties of the reporting enterprise require the reporting enterprise to consolidate the VIE. It also eliminates the VIE consolidation model based on majority exposure to variability that applied to certain investment companies and similar entities. This consolidation guidance is effective for public business entities for annual and interim periods beginning after December 15, 2015. The adoption of this guidance did not have a material impact on the Company's consolidated financial condition, results of operations or cash flows. In April 2015, the FASB issued ASU 2015-03, which requires debt issuance costs to be presented as a direct reduction from the carrying amount of the debt liability, consistent with the presentation of debt discounts. The amortization of debt issuance costs will be reported as interest expense. The new standard is to be applied on a retrospective basis and reported as a change in an accounting principle. In August 2015, the FASB released clarifying guidance for debt issuance costs related to line-of-credit arrangements, which permits debt issuance costs to be presented as an asset, regardless of whether there are any outstanding borrowings on the line-of-credit arrangement. Debt issuance costs associated with a line of credit can be amortized ratably over the term of the line-of-credit arrangement. This standard is effective for annual reporting periods beginning after December 15, 2015, including interim periods within that reporting period. Early adoption is permitted for financial statements that have not been previously issued. The Company adopted in the first quarter of 2016 and has retroactively applied to the December 31, 2015 balance sheet presentation. This change represents a change in accounting principle. The amount of deferred financing costs reclassified against long-term debt was $2.5 million and $2.7 million for March 31, 2016 and December 31, 2015, respectively. The adoption did not materially impact the Company's results of operations and related disclosures. In September 2015, the FASB issued ASU 2015-16, which requires that an acquirer in a business combination recognize adjustments to provisional amounts that are identified during the measurement period in the reporting period in which the adjustment amounts are determined. Under this guidance the acquirer recognizes, in the same period's financial statements, the effect on earnings of changes in depreciation, amortization, or other income effects, if any, as a result of the change to the provisional amounts, calculated as if the accounting had been completed at the acquisition date. New disclosures are required to present separately on the face of the income statement or disclose in the notes the portion of the amount recognized in current-period earnings by line item that would have been recognized in previous reporting periods if the adjustment to the provisional amounts had been recognized as of the acquisition date. This guidance is effective for annual reporting periods beginning after December 15, 2015, including interim periods within that reporting period. At adoption, the new guidance is to be applied prospectively to adjustments to provisional amounts that occur after the effective date with earlier application permitted for financial statements that have not been issued. The adoption of this guidance did not have a material impact on the Company's consolidated financial condition, results of operations or cash flows. In January 2016, the FASB issued ASU 2016-01 which provides revised accounting guidance related to the accounting for and reporting of financial instruments. This guidance significantly revises an entity’s accounting related to (i) the classification and measurement of investments in equity securities and (ii) the presentation of certain fair value changes for financial liabilities measured at fair value. It also amends certain disclosure requirements associated with the fair value of financial instruments. The ASU is effective for annual periods and interim periods within those annual periods beginning after December 15, 2017; earlier adoption is permitted. The adoption of this guidance is not expected to have a material impact on the Company's consolidated financial condition, results of operations or cash flows. In February 2016, the FASB issued ASU 2016-02 as a comprehensive new leases standard that amends various aspects of existing guidance for leases and requires additional disclosures about leasing arrangements. It will require companies to recognize lease assets and lease liabilities by lessees for those leases classified as operating leases under previous guidance, ASC 840, Leases. ASU 2016-02 creates a new Topic, ASC 842, Leases. This new Topic retains a distinction between finance leases and operating leases. The classification criteria for distinguishing between finance leases and operating leases are substantially similar to the classification criteria for distinguishing between capital leases and operating leases in the previous leases guidance. The ASU is effective for annual periods beginning after December 15, 2018, including interim periods within those fiscal years; earlier adoption is permitted. In the financial statements in which the ASU is first applied, leases shall be measured and recognized at the beginning of the earliest comparative period presented with an adjustment to equity. The Company is currently evaluating the impact of the adoption of this guidance on its consolidated financial condition, results of operations and cash flows. In March 2016, the FASB issued ASU 2016-09 with the intention to simplify aspects of the accounting for share-based payment transactions, including income tax impacts, classification on the statement of cash flows, and forfeitures. The ASU is effective for fiscal years and interim periods within those years beginning after December 15, 2016. The various amendments within the standard require different approaches to adoption of either retrospective, modified retrospective or prospective. Early adoption is permitted. The company is currently evaluating the potential impact of this standard as well as the as available transition methods. |
Earnings Per Share (Tables) |
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Earnings Per Share [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Reconciliation of net income (loss) for continuing and discontinued operations and the number of common shares used in the computation of both basic and diluted earnings per share | The following tables provide a reconciliation of net income (loss) for continuing and discontinued operations and the number of shares of common stock used in the computation of both basic and diluted earnings per share:
(a) Securities outstanding that were excluded from the computation, prior to the use of the treasury stock method, because they would have been anti-dilutive are as follows: |
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Schedule of securities outstanding that were excluded from the computation, prior to the use of the treasury stock method, because they would have been anti-dilutive |
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Restricted Cash (Tables) |
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Schedule of restricted cash, escrow deposits and investments | The following table sets forth the Company’s various restricted cash, escrow deposits and related financial instruments:
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Intangible Assets and Goodwill (Tables) |
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Goodwill and Intangible Assets Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of intangible assets | Intangible assets consist of the following:
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Schedule of estimated amortization expense for all definite lived intangibles | Expected amortization expense for all definite lived intangibles for each of the years ended December 31, is as follows:
(a) Estimated amortization expense for the year ending December 31, 2016, includes only amortization to be recorded after March 31, 2016. |
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Summary of the changes in the carrying amount of goodwill | The following table summarizes the carrying amount of goodwill:
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Property and Equipment (Tables) |
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Mar. 31, 2016 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Property, Plant and Equipment [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of property and equipment | The following table sets forth the Company’s property and equipment:
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Leases (Tables) |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||
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Mar. 31, 2016 | |||||||||||||||||||||||||||||||||||||||||||||||||||
Leases [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Future Minimum Rental Payments for Operating Leases | Future minimum lease payments for each of the next five years ending December 31, are as follows:
(a) Estimated minimum lease payments for the year ending December 31, 2016, include only payments to be recorded after March 31, 2016. |
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Schedule of Future Minimum Rental Payments Receivable for Operating Leases | Future minimum lease receivables from the Company’s facilities leased and subleased to third party operators for each of the next five years ending December 31, are as follows:
(a) Estimated minimum lease receivables for the year ending December 31, 2016, include only payments to be received after March 31, 2016. |
Accrued Expenses (Tables) |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Mar. 31, 2016 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Payables and Accruals [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of accrued expenses | Accrued expenses consist of the following:
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Notes Payable and Other Debt (Tables) |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Mar. 31, 2016 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Debt Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of notes payable and other debt | Notes payable and other debt consists of the following (a):
The following is a detailed listing of the debt facilities that comprise each of the above categories:
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Summary of the scheduled maturities | The schedule below summarizes the scheduled maturities for the twelve months ended March 31 of the respective year (not adjusted for commitments to refinance or extend the maturities of debt as noted above). The 2017 maturities include $1.0 million related to the outstanding loan of one of the two office buildings located in Roswell, Georgia which is classified in liabilities of disposal group held for sale. In April 2016, the office building was sold and the related outstanding debt was repaid in full (see Note 16 - Subsequent Events).
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Discontinued Operations (Tables) |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Mar. 31, 2016 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Discontinued Operations and Disposal Groups [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of operations, assets and liabilities of the disposal groups held for sale | The following table summarizes certain activity of discontinued operations for the three months ended March 31, 2016 and 2015:
At March 31, 2016, the Company had two office buildings held for sale. The Company completed the sale of one of these buildings on April 25, 2016 for $0.7 million. Debt obligations on the transaction exceeded proceeds by $0.2 million. The other office building is unencumbered and under contract for a sales price of $0.2 million. The Company expects to complete the sale of the second office building in the second quarter of 2016. On February 9, 2016, the Company sold an office building in Arkansas for $0.3 million. The office space was unencumbered. Assets and liabilities of the disposal group held for sale at March 31, 2016 and December 31, 2015, are as follows:
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Stock Based Compensation (Tables) |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Mar. 31, 2016 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Summary of recognized stock based compensation | STOCK BASED COMPENSATION For the three months ended March 31, 2016 and 2015, the Company recognized stock-based compensation expense as follows:
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Summary of the Company's stock option activity | The following table summarizes the Company's common stock option activity for the three months ended March 31, 2016:
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Summary of the Company's restricted stock activity | The following table summarizes the Company's restricted stock activity for the three months ended March 31, 2016:
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Schedule of exercise price range | The following table summarizes the common stock options outstanding and exercisable as of March 31, 2016:
The following table summarizes the common stock warrants outstanding and exercisable as of March 31, 2016:
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Schedule of common stock warrant activity | The following table summarizes the Company's common stock warrant activity for the three months ended March 31, 2016:
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Schedule of assumptions | The assumptions used in calculating the fair value of employee common stock options and warrants granted during the three months ended March 31, 2016 and March 31, 2015, using the Black-Scholes-Merton option-pricing model, are set forth in the following table:
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Common and Preferred Stock Common and Preferred Stock (Tables) |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Mar. 31, 2015 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Equity [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of preferred stock | The following table summarizes the shares of preferred stock issued by the Company and net proceeds received from issuance and dividends paid on the Company's preferred stock for the three months ended March 31, 2016:
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Organization and Significant Accounting Policies (Details Textual) $ in Thousands |
3 Months Ended | |
---|---|---|
Mar. 31, 2016
USD ($)
facility
|
Dec. 31, 2015
USD ($)
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|
Operating Leased Assets [Line Items] | ||
Number of facilities | 38 | |
Number of sublease agreements executed, owned by company | 22 | |
Number of sublease agreements executed, leased by company | 11 | |
Patient care receivables, estimated allowance for uncollectible accounts | $ | $ 11,300 | $ 12,500 |
Accounts receivable, net of allowance | $ | $ 8,558 | 8,805 |
Third Party Operators | ||
Operating Leased Assets [Line Items] | ||
Number of owned assisted living facilities leased | 2 | |
Patient Care Receivables [Member] | ||
Operating Leased Assets [Line Items] | ||
Accounts receivable, net of allowance | $ | $ 6,500 | $ 8,000 |
Anti-dilutive Securities (Details) - shares shares in Thousands |
3 Months Ended | |
---|---|---|
Mar. 31, 2016 |
Mar. 31, 2015 |
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Anti-dilutive securities outstanding that were excluded from the computation | ||
Total anti-dilutive securities (in shares) | 4,589 | 6,964 |
Stock options | ||
Anti-dilutive securities outstanding that were excluded from the computation | ||
Total anti-dilutive securities (in shares) | 373 | 894 |
Warrants | ||
Anti-dilutive securities outstanding that were excluded from the computation | ||
Total anti-dilutive securities (in shares) | 2,051 | 2,266 |
Subordinated convertible notes | ||
Anti-dilutive securities outstanding that were excluded from the computation | ||
Total anti-dilutive securities (in shares) | 2,165 | 3,804 |
Restricted Cash (Details) - USD ($) $ in Thousands |
Mar. 31, 2016 |
Dec. 31, 2015 |
---|---|---|
Restricted Cash and Investments [Abstract] | ||
Cash collateral and certificates of deposit, current | $ 3,823 | $ 7,687 |
Current replacement reserves | 1,036 | 950 |
Escrow deposits | 544 | 532 |
Total current portion | 5,403 | 9,169 |
Restricted investments for other debt obligations | 1,940 | 2,264 |
HUD replacement reserves | 1,167 | 1,174 |
Reserves for capital improvements | 378 | 120 |
Total noncurrent portion | 3,485 | 3,558 |
Total restricted cash | $ 8,888 | $ 12,727 |
Intangible Assets and Goodwill (Intangible Assets) (Details) - USD ($) $ in Thousands |
3 Months Ended | ||
---|---|---|---|
Mar. 31, 2016 |
Mar. 31, 2015 |
Dec. 31, 2015 |
|
Finite-lived Intangible Assets [Roll Forward] | |||
Gross | $ 45,042 | $ 45,042 | |
Accumulated amortization | (8,681) | (8,221) | |
Net carrying amount | 36,361 | 36,821 | |
Amortization expense | (460) | ||
CON (included in property and equipment) | |||
Finite-lived Intangible Assets [Roll Forward] | |||
Gross | 35,690 | 35,690 | |
Accumulated amortization | (5,053) | (4,760) | |
Net carrying amount | 30,637 | 30,930 | |
Amortization expense | (293) | $ (300) | |
Lease Rights | |||
Finite-lived Intangible Assets [Roll Forward] | |||
Gross | 6,881 | 6,881 | |
Accumulated amortization | (3,628) | (3,461) | |
Net carrying amount | 3,253 | 3,420 | |
Amortization expense | (167) | $ (200) | |
Bed Licenses - Separable | |||
Finite-lived Intangible Assets [Roll Forward] | |||
Gross | 2,471 | 2,471 | |
Accumulated amortization | 0 | 0 | |
Net carrying amount | 2,471 | $ 2,471 | |
Amortization expense | $ 0 |
Intangible Assets and Goodwill (Expected Amortization Expense for all Definite Lived Intangibles) (Details) - USD ($) $ in Thousands |
Mar. 31, 2016 |
Dec. 31, 2015 |
---|---|---|
Finite-Lived Intangible Assets [Line Items] | ||
Total expected amortization expense | $ 3,254 | $ 3,420 |
CON (included in property and equipment) | ||
Finite-Lived Intangible Assets [Line Items] | ||
2016 | 880 | |
2017 | 1,173 | |
2018 | 1,173 | |
2019 | 1,173 | |
2020 | 1,173 | |
Thereafter | 25,065 | |
Total expected amortization expense | 30,637 | |
Lease Rights | ||
Finite-Lived Intangible Assets [Line Items] | ||
2016 | 500 | |
2017 | 667 | |
2018 | 667 | |
2019 | 667 | |
2020 | 482 | |
Thereafter | 270 | |
Total expected amortization expense | $ 3,253 |
Property and Equipment (Textual) (Details) - USD ($) $ in Thousands |
3 Months Ended | |
---|---|---|
Mar. 31, 2016 |
Mar. 31, 2015 |
|
Property, Plant and Equipment [Abstract] | ||
Depreciation and amortization | $ 1,713 | $ 1,675 |
Depreciation and amortization expense recognized in loss from discontinued operations | $ 100 |
Intangible Assets and Goodwill Carrying Amount of Goodwill (Details) - USD ($) $ in Thousands |
Mar. 31, 2016 |
Dec. 31, 2015 |
---|---|---|
Goodwill and Intangible Assets Disclosure [Abstract] | ||
Goodwill | $ 5,023 | $ 5,023 |
Accumulated impairment losses | (840) | (840) |
Net carrying amount | $ 4,183 | $ 4,183 |
Leases - Operating Leases (Details) $ in Thousands |
3 Months Ended | |
---|---|---|
Mar. 31, 2016
USD ($)
facility
|
May. 06, 2016
facility
|
|
Operating Leased Assets [Line Items] | ||
Number of skilled nursing facilities under non-cancelable operating leases | facility | 11 | |
Future minimum lease payments | ||
2016 | $ 6,006 | |
2017 | 8,158 | |
2018 | 8,340 | |
2019 | 8,526 | |
2020 | 8,697 | |
Thereafter | 55,320 | |
Total | $ 95,047 | |
Subsequent Event | ||
Operating Leased Assets [Line Items] | ||
Number of facilities, with default notice | facility | 8 | |
Sub lease, number of facilities, with default notice | facility | 3 |
Leases (Future Payments Receivable)(Details) $ in Thousands |
Mar. 31, 2016
USD ($)
|
---|---|
Leases [Abstract] | |
2016 | $ 19,725 |
2017 | 26,845 |
2018 | 27,474 |
2019 | 28,082 |
2020 | 27,634 |
Thereafter | 204,913 |
Total | $ 334,673 |
Leases (Lease and Subleased Facilities to Third-Party Operators) (Details) |
3 Months Ended | 12 Months Ended | ||
---|---|---|---|---|
Feb. 05, 2016
USD ($)
renewal_term
|
Mar. 31, 2016
facility
|
Dec. 31, 2015
USD ($)
|
Jul. 17, 2015
USD ($)
|
|
Operating Leased Assets [Line Items] | ||||
Number of skilled nursing facilities under non-cancelable operating leases | facility | 11 | |||
Aria Subleases [Member] | ||||
Operating Leased Assets [Line Items] | ||||
Renewal term (in years) | 15 years | |||
Annual rent per agreement | $ 5,100,000 | |||
Skyline Lease [Member] | ||||
Operating Leased Assets [Line Items] | ||||
Annual rent per agreement | $ 5,400,000.0 | |||
Initial lease term (in years) | 15 years | |||
Number of renewal terms | renewal_term | 2 | |||
Renewal term (in years) | 5 years | |||
Escalation percentage through initial term, as a percent | 0.025 | |||
Agreement to sell, value | $ 55,000,000 | |||
Agreed upon selling price | $ 52,000,000 | |||
Highlands Arkansas Holdings, LLC [Member] | Notes Receivable | ||||
Operating Leased Assets [Line Items] | ||||
Accounts and notes receivable | $ 1,750,000 |
Accrued Expenses (Details) - USD ($) $ in Thousands |
Mar. 31, 2016 |
Dec. 31, 2015 |
---|---|---|
Payables and Accruals [Abstract] | ||
Payroll related | $ 395 | $ 684 |
Employee benefits | 306 | 648 |
Real estate and other taxes | 295 | 411 |
Self-insured reserve | 248 | 221 |
Accrued interest | 474 | 484 |
Other accrued expenses | 609 | 677 |
Total accrued expenses | $ 2,327 | $ 3,125 |
Notes Payable and Other Debt (Scheduled Maturities) (Details) $ in Thousands |
Mar. 31, 2016
USD ($)
building
|
Dec. 31, 2015
USD ($)
|
---|---|---|
Debt Instrument [Line Items] | ||
2017 | $ 47,867 | |
2018 | 12,502 | |
2019 | 1,778 | |
2020 | 1,866 | |
2021 | 1,969 | |
Thereafter | 55,112 | |
Subtotal | 121,094 | |
Less: unamortized discounts | (202) | |
Deferred financing costs | (2,504) | $ (2,712) |
Total debt | 118,388 | $ 122,759 |
Disposal Group, Held-for-sale or Disposed of by Sale, Not Discontinued Operations [Member] | ||
Debt Instrument [Line Items] | ||
2017 | $ 1,000 | |
Number of office buildings, classified as liabilities of disposal group held for sale | building | 2 |
Notes Payable and Other Debt (Narrative) (Details) - USD ($) $ in Millions |
Mar. 24, 2016 |
Mar. 31, 2016 |
---|---|---|
Debt Instrument [Line Items] | ||
Proceeds from debt refinancing, anticipated | $ 25.4 | |
Repayments of debt | $ 3.9 | |
Minimum | ||
Debt Instrument [Line Items] | ||
Amortization of deferred financing costs, percentage | 0.08% | |
Maximum | ||
Debt Instrument [Line Items] | ||
Amortization of deferred financing costs, percentage | 1.92% |
Discontinued Operations Activity of Discontinued Operations (Details) - USD ($) $ in Thousands |
3 Months Ended | |
---|---|---|
Mar. 31, 2016 |
Mar. 31, 2015 |
|
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||
Net income (loss) | $ (528) | $ 2,266 |
Discontinued Operations | ||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||
Total revenues | 0 | 46,862 |
Cost of services | 519 | 42,930 |
Net income (loss) | (528) | 2,266 |
Interest expense, net | $ 8 | $ 313 |
Discontinued Operations Assets and Liabilities of the Disposal Groups Held for Sale (Details) - USD ($) $ in Thousands |
Mar. 31, 2016 |
Dec. 31, 2015 |
---|---|---|
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||
Assets held for sale | $ 1,237 | $ 1,249 |
Liabilities held for sale | 949 | 958 |
Discontinued Operations, Held-for-sale | ||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||
Property and equipment, net | 1,237 | 1,249 |
Assets held for sale | 1,237 | 1,249 |
Notes payable | 949 | 958 |
Liabilities held for sale | $ 949 | $ 958 |
Stock Based Compensation (Assumptions Used in Calculating the Fair Value of Common Stock Options and Warrants Granted) (Details) |
3 Months Ended | |
---|---|---|
Mar. 31, 2016 |
Mar. 31, 2015 |
|
Weighted average significant assumptions used to estimate the fair value | ||
Dividend yield (percentage) | 0.00% | 0.00% |
Expected volatility (percentage) | 41.00% | 51.00% |
Risk-free interest rate (percentage) | 1.43% | 1.73% |
Expected term (in years) | 5 years | 5 years 2 months 12 days |
Stock Based Compensation (Restricted Stock Activity) (Details) - $ / shares |
3 Months Ended | |
---|---|---|
Jan. 01, 2016 |
Mar. 31, 2016 |
|
Number of Shares | ||
Forfeited (in shares) | 0 | |
Restricted stock | ||
Number of Shares | ||
Unvested at the beginning of the period (in shares) | 294,021 | 294,021 |
Granted (in shares) | 196,251 | |
Vested (in shares) | (53,141) | |
Unvested at the end of the period (in shares) | 437,131 | |
Weighted Average Grant Date Fair Value | ||
Unvested at the beginning of the period (in dollars per share) | $ 4.19 | $ 4.19 |
Granted (in dollars per share) | $ 2.49 | 2.14 |
Vested (in dollars per share) | 2.07 | |
Forfeited (in dollars per share) | 0.00 | |
Unvested at the ending of the period (in dollars per share) | $ 3.53 |
Common and Preferred Stock (Details) - USD ($) $ / shares in Units, $ in Thousands |
3 Months Ended | 12 Months Ended | |||
---|---|---|---|---|---|
Mar. 31, 2016 |
Jan. 26, 2016 |
Nov. 07, 2012 |
Mar. 31, 2016 |
Dec. 31, 2015 |
|
Class of Stock [Line Items] | |||||
Stock repurchased during period (shares) | 150,000 | ||||
Shares repurchased (usd per shares) | $ 2.05 | ||||
Shares authorized to repurchase (shares) | 500,000 | 500,000 | |||
Remaining shares to be repurchased (shares) | 350,000 | 350,000 | |||
Preferred stock, shares issued (in shares) | 2,613,835 | 2,613,835 | 2,426,930 | ||
Net Proceeds from Issuance | $ 58,391 | $ 3,677 | $ 54,714 | ||
Shares issued during period | 186,905 | ||||
Dividends paid | $ 1,777 | ||||
Series A Preferred Stock | |||||
Class of Stock [Line Items] | |||||
Liquidation preference, (usd per share) | $ 25 | ||||
Cash paid for dividends (usd per share) | $ 2.72 | ||||
Rate of dividend (percentage) | 10.875% | ||||
Shares issued during period | 500,600 |
Variable Interest Entities (Details Textual) - Variable Interest Entity, Not Primary Beneficiary |
Apr. 30, 2015
USD ($)
sublease
|
Mar. 31, 2016
USD ($)
|
Aug. 01, 2015
USD ($)
|
---|---|---|---|
Aria Health Consulting LLC | |||
Variable interest entities | |||
Lease incentive, payable | $ 2,000,000 | ||
Number of sublease agreements | sublease | 8 | ||
Operating leases, monthly rental expense | $ 29,500 | ||
Notes Receivable | Aria Health Consulting LLC | |||
Variable interest entities | |||
Accounts and notes receivable | $ 1,750,000 | ||
OHIO | Beacon Facilities | |||
Variable interest entities | |||
Notes payable | $ 600,000 | $ 600,000 | |
Fixed interest rate (as a percent) | 18.00% |
Related Party Transactions (Details Textual) $ in Millions |
3 Months Ended | |
---|---|---|
Mar. 31, 2016
USD ($)
|
Dec. 31, 2014
building
bed
|
|
Related Party Transaction [Line Items] | ||
Number of office buildings | building | 2 | |
Director [Member] | ||
Related Party Transaction [Line Items] | ||
Ownership interest, greater than, percentage | 5.00% | |
Receivable | $ | $ 0.3 | |
Roswell, Georgia | Director [Member] | ||
Related Party Transaction [Line Items] | ||
Number of office buildings | building | 1 | |
Debt outstanding, guaranteed by related party | $ | $ 17.5 | |
College Park, Georgia [Member] | Director [Member] | ||
Related Party Transaction [Line Items] | ||
Number of beds | 95 | |
Attalla, Alabama [Member] | Director [Member] | ||
Related Party Transaction [Line Items] | ||
Number of beds | 182 | |
Glencoe, Alabama [Member] | Director [Member] | ||
Related Party Transaction [Line Items] | ||
Number of beds | 122 |
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