Delaware | 001-12996 | 62-1559667 |
(State or other jurisdiction of incorporation) | (Commission File Number) | (Employer Identification Number) |
Emerging growth company | ¨ | ||||
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. | ¨ |
Historical Diversicare | Kentucky Properties | Pro Forma | |||||||||
PATIENT REVENUES, net | $ | 423,798 | $ | (13,499 | ) | (a) | $ | 410,299 | |||
EXPENSES: | |||||||||||
Operating | 337,517 | (10,219 | ) | (a) | 327,298 | ||||||
Lease and rent expense | 41,202 | — | 41,202 | ||||||||
Professional liability | 8,890 | (490 | ) | (a) | 8,400 | ||||||
General and administrative | 24,971 | (758 | ) | (b) | 24,213 | ||||||
Depreciation and amortization | 8,692 | (200 | ) | (a) | 8,492 | ||||||
Litigation contingency expense | 6,400 | — | 6,400 | ||||||||
Total expenses | 427,672 | (11,667 | ) | 416,005 | |||||||
OPERATING INCOME (LOSS) | (3,874 | ) | (1,832 | ) | (5,706 | ) | |||||
OTHER EXPENSE: | |||||||||||
Gain on sale of investment in unconsolidated affiliate | 308 | — | 308 | ||||||||
Interest expense, net | (4,996 | ) | 1,409 | (g) (h) | (3,587 | ) | |||||
Other income | 115 | — | 115 | ||||||||
Total other expense | (4,573 | ) | 1,409 | (3,164 | ) | ||||||
INCOME (LOSS) FROM CONTINUING OPERATIONS BEFORE INCOME TAXES | (8,447 | ) | (423 | ) | (8,870 | ) | |||||
BENEFIT (PROVISION) FOR INCOME TAXES | 670 | 127 | (c) | 797 | |||||||
INCOME (LOSS) FROM CONTINUING OPERATIONS | (7,777 | ) | (296 | ) | (8,073 | ) | |||||
NET INCOME (LOSS) FROM CONTINUING OPERATIONS PER COMMON SHARE: | |||||||||||
Per common share – basic | |||||||||||
Continuing operations | $ | (1.22 | ) | $ | (1.27 | ) | |||||
Per common share – diluted | |||||||||||
Continuing operations | $ | (1.22 | ) | $ | (1.27 | ) | |||||
WEIGHTED AVERAGE COMMON SHARES OUTSTANDING: | |||||||||||
Basic | 6,362 | 6,362 | |||||||||
Diluted | 6,362 | 6,362 |
Historical Diversicare | Kentucky Properties | Pro Forma | |||||||||
PATIENT REVENUES, net | $ | 574,794 | $ | (17,925 | ) | (a) | $ | 556,869 | |||
EXPENSES: | |||||||||||
Operating | 458,122 | (12,935 | ) | (a) | 445,187 | ||||||
Lease and rent expense | 54,988 | — | 54,988 | ||||||||
Professional liability | 10,764 | (544 | ) | (a) | 10,220 | ||||||
General and administrative | 33,311 | (1,039 | ) | (b) | 32,272 | ||||||
Depreciation and amortization | 10,902 | (812 | ) | (a) | 10,090 | ||||||
Lease termination receipts | (180 | ) | — | (180 | ) | ||||||
Total expenses | 567,907 | (15,330 | ) | 552,577 | |||||||
OPERATING INCOME (LOSS) | 6,887 | (2,595 | ) | 4,292 | |||||||
OTHER EXPENSE: | |||||||||||
Gain on sale of investment in unconsolidated affiliate | 733 | — | 733 | ||||||||
Gain on bargain purchase | 925 | — | 925 | ||||||||
Hurricane costs | (232 | ) | — | (232 | ) | ||||||
Interest expense, net | (6,369 | ) | 1,380 | (g) (h) | (4,989 | ) | |||||
Total other expense | (4,943 | ) | 1,380 | (3,563 | ) | ||||||
INCOME (LOSS) FROM CONTINUING OPERATIONS BEFORE INCOME TAXES | 1,944 | (1,215 | ) | 729 | |||||||
BENEFIT (PROVISION) FOR INCOME TAXES | (6,743 | ) | 315 | (c) | (6,428 | ) | |||||
INCOME (LOSS) FROM CONTINUING OPERATIONS | (4,799 | ) | (900 | ) | (5,699 | ) | |||||
NET INCOME (LOSS) FROM CONTINUING OPERATIONS PER COMMON SHARE: | |||||||||||
Per common share – basic | |||||||||||
Continuing operations | $ | (0.76 | ) | $ | (0.91 | ) | |||||
Per common share – diluted | |||||||||||
Continuing operations | $ | (0.76 | ) | $ | (0.91 | ) | |||||
WEIGHTED AVERAGE COMMON SHARES OUTSTANDING: | |||||||||||
Basic | 6,279 | 6,279 | |||||||||
Diluted | 6,279 | 6,279 |
Historical Diversicare | Transaction Adjustments | Pro Forma | |||||||||
CURRENT ASSETS: | |||||||||||
Cash and cash equivalents | $ | 3,293 | $ | — | (d) | $ | 3,293 | ||||
Receivables | 65,927 | — | 65,927 | ||||||||
Other receivables | 1,551 | — | 1,551 | ||||||||
Prepaid expenses and other current assets | 3,829 | — | 3,829 | ||||||||
Income tax refundable | 862 | — | 862 | ||||||||
Current assets of discontinued operations | 20 | — | 20 | ||||||||
Total current assets | 75,482 | — | 75,482 | ||||||||
PROPERTY AND EQUIPMENT, at cost | 137,430 | — | 137,430 | ||||||||
Less accumulated depreciation and amortization | (83,956 | ) | — | (83,956 | ) | ||||||
Property and equipment, net | 53,474 | — | 53,474 | ||||||||
OTHER ASSETS: | |||||||||||
Deferred income taxes | 15,891 | — | 15,891 | ||||||||
Deferred lease and other costs, net | 279 | — | 279 | ||||||||
Other noncurrent assets | 7,503 | — | 7,503 | ||||||||
Assets held for sale | 13,299 | (13,299 | ) | (e) | — | ||||||
Acquired leasehold interest, net | 6,403 | — | 6,403 | ||||||||
Total other assets | 43,375 | (13,299 | ) | 30,076 | |||||||
$ | 172,331 | $ | (13,299 | ) | $ | 159,032 |
Historical Diversicare | Transaction Adjustments | Pro Forma | |||||||||
CURRENT LIABILITIES: | |||||||||||
Current portion of long-term debt and capitalized lease obligations | $ | 12,576 | $ | — | $ | 12,576 | |||||
Trade accounts payable | 14,146 | — | 14,146 | ||||||||
Current liabilities of discontinued operations | 461 | — | 461 | ||||||||
Accrued expenses: | |||||||||||
Payroll and employee benefits | 20,131 | — | 20,131 | ||||||||
Self-insurance reserves, current portion | 13,051 | — | 13,051 | ||||||||
Other current liabilities | 8,361 | — | 8,361 | ||||||||
Total current liabilities | 68,726 | — | 68,726 | ||||||||
NONCURRENT LIABILITIES: | |||||||||||
Long-term debt and capitalized lease obligations, less current portion and deferred financing costs | 77,308 | (17,900) 287 | (d) (h) | 59,695 | |||||||
Self-insurance reserves, noncurrent portion | 16,301 | — | 16,301 | ||||||||
Deferred tax liability | 6,400 | — | 6,400 | ||||||||
Other noncurrent liabilities | 5,134 | — | 5,134 | ||||||||
Total noncurrent liabilities | 105,143 | (17,613 | ) | 87,530 | |||||||
COMMITMENTS AND CONTINGENCIES | |||||||||||
SHAREHOLDERS’ EQUITY: | |||||||||||
Common stock, authorized 20,000 shares, $.01 par value, 6,749 shares issued, and 6,517shares outstanding, respectively | 68 | — | 68 | ||||||||
Treasury stock at cost, 232 shares of common stock | (2,500 | ) | — | (2,500 | ) | ||||||
Paid-in capital | 23,267 | — | 23,267 | ||||||||
Accumulated deficit | (23,432 | ) | 4,314 | (f) (h) | (19,118 | ) | |||||
Accumulated other comprehensive loss | 1,059 | — | 1,059 | ||||||||
Total shareholders’ equity (deficit) | (1,538 | ) | 4,314 | 2,776 | |||||||
$ | 172,331 | $ | (13,299 | ) | $ | 159,032 |
(a) | This adjustment reflects the elimination of revenues, operating expenses, professional liability and depreciation and amortization expense related to the sold Kentucky Properties. |
(b) | This adjustment reflects the elimination of general and administrative expenses, which represents management fees. Not included in the pro forma results are anticipated savings due to costs that may be reduced or eliminated subsequent to the sale. |
(c) | This adjustment represents the estimated income tax effect of the pro forma adjustments. The tax effect of the pro forma adjustments was calculated using the historical statutory rates in effect for the periods presented. |
(d) | This adjustment represents the receipt of cash consideration at the closing of the transaction, which was concurrently used to relieve debt. Such use of proceeds is required under the terms of the Company's Mortgage Line and Revolving Credit Facility. The proceeds are net of closing costs and taxes. Proceeds of $11,100 was applied to the Term Loan, $2,100 was applied to the Acquisition Line, and $4,700 was applied to the Revolving Credit Facility. |
(e) | This adjustment reflects the elimination of the assets sold attributable to the Kentucky Properties. |
(f) | This adjustment reflects the tax effected gain arising from the transaction as of December 1, 2018. This estimated gain has not been reflected in the pro forma consolidated statements of operations as it is considered to be nonrecurring in nature. No adjustment has been made to the sale proceeds to give effect to any potential post-closing adjustments under the terms of the asset purchase agreement. |
(g) | This adjustment reflects the estimated reduction in interest expense as if the consideration from the sale was used to repay debt on January 1, 2017. The pro forma adjustment was calculated using the historical interest rate for the periods presented. |
(h) | This adjustment reflects the estimated reduction in the deferred financing costs and related amortization expense resulting from the mortgage debt repayment discussed in adjustment (d) as if the transaction occurred on January 1, 2017. |