Brief Overview on Company’s Performance: AAC Holdings, Inc. (NYSE: AAC)

On Monday, AAC Holdings, Inc. (NYSE: AAC) shares price traded between $6.88 and $7.20 during the last trading session upbeat/downbeat with +1.30 percent at $7.01. The shares recorded a trading volume 74,958 shares as compared to its average volume of 196,884 shares. The company has 24.6M shares outstanding and market value of 172.423M. Over the one year trading period, the stock has a peak price of $12.96 and its down is recorded at $6.72.

AAC Holdings, Inc. (AAC) recently reported financial results for the second quarter ended June 30, 2018 and reiterates its before issued full year 2018 guidance.

Second Quarter 2018 Operational and Financial Highlights:
(All comparisons are to the comparable prior-year period, unless otherwise noted)

  • Total revenue raised 27% to $86.8Mon a comparable accounting basis (raised 11% as stated)
  • Average daily inpatient revenue (ADR) raised 12% to $841
  • Total average daily census (ADC) raised to 1,157 contrast with 961
  • Outpatient visits raised 230% to 51,019
  • Net loss attributable to AAC Holdings, Inc. ordinary stockholders was $3.0M, or $(0.12)per diluted ordinary share
  • Adjusted EBITDA raised 2% to $14.8M(see non-GAAP reconciliation herein)
  • Adjusted earnings per diluted ordinary share was $0.09(see non-GAAP reconciliation herein)

Adoption of New Revenue Recognition Standard

  • In May 2014, the FASB issued Accounting Standards Codification Topic 606, “Revenue from Contracts with Consumers” (ASC Topic 606), a replacement of Revenue Recognition ASC Topic 605. The Company adopted ASC Topic 606 on January 1, 2018using the modified retrospective approach. Under ASC Topic 606, the provision for doubtful accounts, which historically was stated as an operating expense, is now stated as a direct reduction to revenue effective January 1, 2018. This change in presentation reduced revenues and operating expenses by the same amount and did not have an effect on net income or earnings per share. As the Company adopted ASC Topic 606 using the modified retrospective approach, previous year periods were not recast and as such, revenues as stated for those periods are not comparable to the current year presentation. For purposes of this release, we have applied our adoption of ASC Topic 606 to the previous year period. We believe this allows for an accurate comparison of previous period revenue. Where we have used language such as “less the provision for doubtful accounts,” this indicates a comparison of periods that reflects our adoption of ASC Topic 606.

AdCare Acquisition

  • On March 1, 2018, AAC purchased AdCare, Inc. and its subsidiaries (“AdCare”). AdCare offers treatment for drug and alcohol addiction and includes, among other things, a 114-bed hospital and 5 outpatient centers in Massachusetts, as well as a 59-bed residential inpatient treatment center and 2 outpatient centers in Rhode Island. AdCare was purchased for total consideration of $85.0M, subject to adjustments.

Second Quarter 2018 Financial Results

  • AAC breaks down its revenues between client related revenue and non-client related revenue. Client related revenue includes: (1) inpatient treatment facility services and related professional services; (2) outpatient facility services, related professional services and sober living services; and (3) client related diagnostic services, which includes point of care drug testing and client related diagnostic laboratory services. Non-client related revenue includes marketing and diagnostic services provided to third parties as well as addiction services provided to individuals in the criminal justice system.
  • Total revenue on a comparable accounting basis (i.e., less the provision for doubtful accounts) raised 27% to $86.8Mcontrast with $68.5M in the same period in the previous year. Total revenue as stated raised 11%.
  • Inpatient treatment facility revenue, on a comparable accounting basis, raised 21% to $66.7Mcontrast with $55.1M in the same period in the previous year. ADR raised 12% to $841 contrast with $752 in the same period in the previous year.


EPS growth in past five years was -64.60 percent while EPS growth in next five years is projected to arrive at 20.00 percent. Sales growth past 5 years was measured at 36.90 percent. EPS growth for this year is 25.00 percent and EPS growth for next year is expected to reach at 21.51 percent.