AAC Holdings, Inc. Reports Third Quarter 2016 Results

Thursday, November 3, 2016 Research News
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AAC HOLDINGS, INC. 

SUPPLEMENTAL RECONCILIATION OF NON-GAAP DISCLOSURES 

Unaudited

(Dollars in thousands, except per share amounts)

Reconciliation of Adjusted EBITDA to Net Income

Three Months Ended

Nine Months Ended

September 30, 2016

June 30, 2016

March 31, 2016

September 30, 2015 (1)

September 30, 2016

September 30, 2015(1)

Net (loss) income

$                    (4,011)

$                       (158)

$                       (269)

$                         1,744

$                    (4,438)

$                           8,979

Non-GAAP Adjustments:

Interest expense

1,927

2,221

1,702

1,203

5,850

2,426

Depreciation and amortization

4,629

4,225

3,915

1,921

12,769

4,937

Income tax (benefit) expense

(758)

(107)

(20)

644

(885)

5,003

Stock-based compensation and related tax reimbursements

2,064

2,137

2,638

1,270

6,839

4,144

Litigation settlement and California matter related expense

3,961

1,311

2,325

2,248

7,597

3,768

Acquisition-related expense

688

1,298

860

1,061

2,846

3,041

De novo start-up expense and other

3,163

1,243

862

592

5,268

592

Facility closure operating losses and expense

404

367

988

771

Adjusted EBITDA

$                    12,067

$                    12,537

$                    12,013

$                       11,671

$                    36,617

$                         32,890

Reconciliation of Adjusted Net Income Available to AAC Holdings, Inc. Common Stockholders to Net Income Available to AAC Holdings, Inc. Common Stockholders 

Three Months Ended

Nine Months Ended

September 30, 2016

June 30, 2016

March 31, 2016

September 30, 2015 (1)

September 30, 2016

September 30, 2015 (1)

 Net income available to AAC Holdings, Inc. common stockholders 

$                    (2,525)

$                         872

$                         586

$                         2,452

$                    (1,067)

$                         10,045

Non-GAAP Adjustments:

Litigation settlement and California matter related expense

3,961

1,311

2,325

2,248

7,597

3,768

Acquisition-related expense

688

1,298

860

1,061

2,846

3,041

De novo start-up and other expenses

3,163

1,243

862

592

5,268

592

Facility closure operating losses and expense, net of taxes

404

367

988

771

Redemption of BHR Series A Preferred Units

534

Income tax effect of non-GAAP adjustments

(1,366)

(967)

(280)

(1,308)

(2,613)

(2,367)

Adjusted net income available to AAC Holdings, Inc. common stockholders

$                      4,325

$                      4,124

$                      4,353

$                         6,033

$                    12,802

$                         15,613

Weighted-average shares outstanding - diluted

22,957,834

22,811,345

22,113,500

22,031,133

22,607,194

21,651,654

GAAP diluted earnings per share

$                      (0.11)

$                        0.04

$                        0.03

$                           0.11

$                      (0.05)

$                             0.46

Adjusted diluted earnings per share

$                        0.19

$                        0.18

$                        0.20

$                           0.27

$                        0.57

$                             0.72

Adjusted EBITDA, adjusted net income available to AAC Holdings, Inc. common stockholders, and adjusted diluted earnings per share (herein collectively referred to as "Non-GAAP Disclosures") are "non-GAAP financial measures" as defined under the rules and regulations promulgated by the U.S. Securities and Exchange Commission.   The Non-GAAP Disclosures should not be considered as measures of financial performance under U.S. generally accepted accounting principles ("GAAP").   The items excluded from the Non-GAAP Disclosures are significant components in understanding and assessing our financial performance and should not be considered as an alternative to net income or other financial statement items presented in the condensed consolidated financial statements.   Because the Non-GAAP Disclosures are not measures determined in accordance with GAAP, the Non-GAAP Disclosures may not be comparable to other similarly titled measures of other companies.

Management defines Adjusted EBITDA as net (loss) income adjusted for interest expense, depreciation and amortization expense, income tax (benefit) expense, stock-based compensation and related tax reimbursements, litigation settlement and California matter related expense, acquisition-related expense (which includes professional services for accounting, legal, valuation services and licensing expenses), de novo start-up expenses and facility closure operating losses and expense associated with the closing of FitRx in the fourth quarter of 2015.

Management defines Adjusted Net Income Available to AAC Holdings, Inc. common stockholders as net income available to AAC Holdings, Inc. common stockholders adjusted for litigation settlement and California matter related expense, acquisition-related expense (which includes professional services for accounting, legal, valuation services and licensing expenses), de novo start-up expenses, facility closure operating losses and expense associated with FitRx, redemption of BHR Series A Preferred Units, and the income tax effect of the non-GAAP adjustments at the then applicable effective tax rate.

Adjusted diluted earnings per share represents diluted earnings per share calculated using adjusted net income available to AAC Holdings, Inc. common stockholders as opposed to net income available to AAC Holdings, Inc. common stockholders.

With respect to our "2016 Outlook" above, the Company is omitting a reconciliation of forward-looking non-GAAP financial measures to the most directly comparable GAAP financial measures because the Company is unable to provide such reconciliations without the use of unreasonable efforts. This inability results from the inherent difficulty in forecasting generally and quantifying certain projected amounts that are necessary for such reconciliations. In particular, sufficient information is not available to calculate certain adjustments required for such reconciliations, including de novo start-up expenses and acquisition-related expenses. We expect these adjustments may have a potentially significant impact on our future GAAP financial results.

(1) Balances shown represent recasted amounts as disclosed in the Company's Current Form 8-k as filed with the SEC on February 23, 2016.  



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