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Adeptus Health: Adpt News - For Immediate Release ADEPTUS HEALTH REPORTS QUARTER RESULTS Systemwide Revenue Increased First Quarter Adjusted EBITDA Increased Quarter Adjusted EPS Increased First

The following excerpt is from the company's SEC filing.

Lewisville, Texas (

April 20

) — Adeptus Health Inc. (NYSE: ADPT) (“ADPT” or the “Company”), the largest operator of freestanding emergency rooms in the U.S., anno

unced its results for the

quarter

ended

. All comparisons included in this release are for the same period in the prior year, unless otherwise noted.

See “Non-GAAP Financial Measures Description and Reconciliation” for further information related to Systemwide Revenue,

Adjusted EBITDA and Adjusted earnings per share

Quarter 201

Highlights:

Systemwide net patient services revenue was

$140.4

million versus

million in

prior year, an increase of

Net operating revenue was $

million versus $

million in prior year, an increase of

Adjusted EBITDA was

million versus $1

Adjusted earnings per share was

and GAAP earnings per share was

Cash flow

used in

operating activities was $

in prior year;

Net income attributable to Adeptus Health Inc. was

million versus $0.

Same store revenue increased 12

% and same store volumes increased 15% versus prior year, and;

The Company opened

freestanding facilities during the

2016 Guidance

We continue to expect systemwide net patient services revenue, which includes revenue from our unconsolidated joint ventures, of

$635.0 million to $665.0 million for the full year 2016. We expect Adjusted EBITDA of $108.0 million to 113.0 million and Adjusted earnings per share of $2.50 to $2.60 for the full year 2016.

Results of Operations for the

First

Thomas S. Hall, Chairman and CEO, stated, “We are pleased with our first quarter results, which were in line with our expectations and demonstrate continued progress in executing on our growth plans. This quarter, we opened seven new facili

ties, bringing our total to 90,

and achieved substantial growth in both revenue and patient volumes. With our Dallas hospital open and all of our Dallas-Fort Worth area freestanding ERs able to accept all insurance as a result, we saw significant same store volume and revenue growth, reinforcing the need for greater ac

cess to emergency medical care. Earlier this month, Fortune Magazine recognized

Adeptus Health as one of

Top 20 Best Workplaces in Health Care

in America

We are pleased with this acknowledgement as we continue to deliver

the highest quality of care that has earned us the Press Ganey Guardian of Excellence Award in patient satisfaction for three consecutive years.”

During the

, ADPT opened

facilities, including

freestanding emergency facilities

in Texas

Colorado,

part of

partnership with

UCHealth

in Arizona with partner, Dignity Health.

Additionally, construction

continues to progress

on two

hospitals in Colorado

in Louisiana

in Houston, Texas.

For the

of 201

, ADPT generated total net operating revenue

$112.8

million, an increase of

Net operating revenue exclude

facilities in Colorado

of which were consolidated in the prior year

and the Arizona hospit

al and its

, which are accounted for as equity method investments. The increase was primarily attributable

to the impact of patient volumes from

both existing and new

consolidated f

annual gross charge increases

, offset by the deconsolidation of our Colorado locations due to the UCHealth joint venture.

ADPT generated net income of

million for the quarter, of which $

million was attributable to Adeptus Health Inc., compared to net

of $1.

million from the prior year, of which net income of $0.

million was attributable to Adeptus Health Inc.

The increase in net income was due to an increase of

million in net operating revenue

million increase in equity in earnings of unconsolidated joint ventures

and a $1.4 million decrease in interest expense

. This increase was partially offset by

increases in salaries, wages and benefits and other costs related to our growth initiatives

and the impact of taxes on higher earnings.

Adjusted EBITDA increased

million. This increase was primarily attributable to a

million increase in net operating revenue

See "Non-GAAP Financial Measures Description and Reconciliation" and "Reconciliation of Adjusted EBITDA to Net Income" below for further information related to Adjusted EBITDA and its reconciliation to net income

per share and GAAP earnings per share was

per share for the quarter. Adjusted earnings per share is calculated using a weighted average of both Class A and Class B common shares outstanding, which was

an aggregate of

20,883,876

common shares at

. Adjustments for the quarter

million of preopening costs associated with new facility openings,

million of stock compensation expense

million of other costs associated with our growth initiatives and an adjustment for taxes in order to establish a normalized tax rate of 35% for comparability purposes. See "Non-GAAP Financial Measures Description and Reconciliation" and

"Earnings Per Share Reconciliation" below for further information related to Adjusted earnings per share and its reconciliation to net income

Systemwide Financial Results

, ADPT generated systemwide net patient services revenue of

same store revenue increased 12

% and same store volumes increased 15% versus prior year. The increase in systemwide net patient services revenue

was primarily attributable to the impact of increased patient volumes from the expansion of the number of freestanding facilities fro

, annual gross charge increases

opening of

hospital in Texas

and continued growth of

our hospital

and its hospital outpatient departments

rizona.

As of

facilities associated with our joint venture with

and our

Arizona hospital and its

associated with our joint venture with Dignity Health were accounted for using the equity method. For consolidated subsidiaries, the Company’s financial statements reflect 100% of the revenues and expenses for these subsidiaries, after elimination of intercompany transactions and accounts. For our unconsolidated joint ventures, consolidated statements of operations reflect those earnings in two line items:

Equity in

of unconsolidated joint ventures, which represents our share of the net income or loss of each equity method joint venture based on our ownership percentage; and

Management and contract services revenues, which represent the Company’s combined income from management and contract services that are earned from managing the day-to-day operations and providing contract staffing of the facility.

As a result of this accounting treatment in our reported results, management supplementally focuses on non-GAAP systemwide metrics to analyze the results of operations. These systemwide metrics include systemwide net patient services revenue. Systemwide metrics treat our unconsolidated facilities as if they were consolidated. While the revenues earned at the unconsolidated facilities are not recorded in our consolidated financial statements, management believes systemwide net patient services revenue growth is important to understand the Company’s financial performance because it is used to interpret the sources of our growth and provide a growth metric incorporating the revenues earned by all affiliated facilities, regardless of the accounting treatment. As we execute on our strategy of partnering with health systems, management expects the number of our facilities accounted for under the equity method to increase relative to the total number of affiliated facilities.

Liquidity

At the end of the

, the Company had cash of

million available under its revolv

credit facility. Net cash flow

net cash flow used in operations in the prior year.

, the Company had total long-term debt and capital lease obligations of

million and debt net

of cash of

Market Outlook

We remain on track to open 27 new facilities in 2016, including both owned and joint venture facilities.

These include

24 new

freestanding facility openings and three new hospitals;

construction on our first Louisiana-based hospital and two hospitals in Colorado remain on schedule to open by the end of the year.

“Through

the continued

expansion of our network of hospitals and freestanding emergency rooms

and partnerships with leading healthcare organizations

, we are helping to transform the delivery of emergency care in the U.S.,” added Hall. “Partnerships remain a cornerstone of our growth and as 2016 unfolds we expect to announce additional partnerships."

Conference Call

A live audio webcast to present the

ults will take place today at 9

am (Eastern Time), hosted by T

Timothy Fielding, CFO

Graham Cherrington, President and COO

The audio webcast will be available by accessing:

https://www.webcaster4.com/Webcast/Page/1069/14443

Following the call, an archived recording of the replay will also be available on the Adeptus Health Investor Relations page for 30 days:

http://ir.adeptushealth.com/events-and-presentations/events/...

About Adeptus Health Inc.

Adeptus Health (NYSE:ADPT) is a leading patient-centered healthcare organization expanding access to the highest quality emergency medical care through its network of freestanding emergency rooms and partnerships with premier healthcare providers. In Texas, Adeptus Health owns and operates

First Texas Hospital and

First Choice Emergency Room, the nation's largest and oldest network of independent freestanding emergency rooms. In Colorado, in partnership with University of Colorado Health, Adeptus Health operates UCHealth Emergency Rooms. In Arizona, with Dign

ity Health, the company

operates Dignity Health Arizona General Hospital and freestanding emergency rooms.

In Louisiana, Adeptus Health has a partnership with Ochsner Health System, the state’s largest healthcare system, to improve access to emergency medical care.

In Ohio, Adeptus Health has a partnership with Mount Carmel Health System.

All Adeptus Health freestanding facilities are fully equipped emergency rooms with a complete radiology suite of diagnostic technology (CT scanner, ultrasound, and digital X-ray), on-site laboratory, and staffed with board-certified physicians and emergency trained registered nurses. According to patient feedback collected by Press Ganey Associates Inc., Adeptus Health provides the highest quality emergency medical care and received the 2013

and 2015

Press Ganey Guardian of Excellence Award for exceeding the 95th percentile in patient satisfaction nationwide. For more information please visit us on the web at adhc.com.

Media Contact:

Jackie Zupsic

Hill & Knowlton Strategies

Jackie.Zupsic@hkstrategies.com

Tel: (212) 885 – 0590

Investor Relations Contact:

Kevin Ellich

Vice President, Investor Relations

Kevin.Ellich@adhc.com

972) 899-7062

Forward-Looking Statements

Certain statements and information herein may be deemed to be “forward-looking statements” within the meaning of the Federal Private Securities Litigation Reform Act of 1995. Forward-looking statements may include, but are not limited to, statements relating to our guidance, objectives, plans and strategies, and all statements (other than statements of historical facts) that address activities, events or developments that we intend, expect, project, believe or anticipate will or may occur in the future. Any forward-looking statements herein are made as of the date of this press release, and ADPT undertakes no duty to update or revise any such statements except as required by the federal securities laws. Forward-looking statements are not guarantees of future performance and are subject

to risks and uncertainties. Important factors that could cause actual results, developments and business decisions to differ materially from forward-looking statements are described in ADPT’s filings with the U.S. Securities and Exchange Commission (“SEC”) from time to time and which are accessible on the SEC’s website at www.sec.gov, including in the section entitled “Risk Factors” in the Company’s Form 10-K

for the fiscal year ended December 31, 201

. Among the factors that could cause future results to differ materially from those provided in this press release are:

our ability to implement our growth strategy; our ability to maintain sufficient levels of cash flow to meet growth expectations; our ability to protect our brand; federal and state laws and regulations relating to our facilities, which could lead to the incurrence of significant penalties by us or require us to make significant changes to our operations; our ability to locate available facility sites on terms acceptable to us; competition from hospitals, clinics and other emergency care providers; our dependence on payments from third-party payors; our ability to source and procure new products and equipment to meet patient preferences; our reliance on Medical Properties Trust (“MPT”) and the MPT Master Funding and Development Agreement

; disruptions in the global financial markets leading to difficulty in borrowing sufficient amounts of capital to finance the carrying costs of inventory to pay for capital expenditures and operating costs; our ability or the ability of our healthcare system partners to negotiate favorable contracts or renew existing contracts with third-party payors on favorable terms; significant changes in our payor mix or case mix resulting from fluctuations in the types of cases treated at our facilities;

significant changes in the rules, regulations and systems governing Medicare and Medicaid reimbursements;

material changes in IRS revenue rulings, case law or the interpretation of such rulings; shortages of, or quality control issues with, emergency care-related products, equipment and medical supplies that could result in a disruption of our operations; the intense competition we face for patients, physician use of our facilities, strategic relationships and commercial payor contracts; the fact that we are subject to significant malpractice and related legal claims; the growth of patient receivables or the deterioration in the ability to collect on those accounts;

the impact on us of PPACA, which represents a significant change to the healthcare industry; and ensuring our continued compliance with HIPAA, which could require us to expend significant resources and capital;

and the factors discussed in the section entitled “Risk Factors” in the Company’s Form 10-K

This press release includes presentations of Adjusted EBITDA, which is defined as net income before interest, taxes, depreciation and amortization, further adjusted to eliminate the impact of certain additional items, including, facility preopening expenses, stock compensation expense and other non-recurring costs

, losses

or gains.

This press release also includes presentation of Adjusted earnings per share, which is defined as earnings per share related to the Company’s overall operation, including controlling and non-controlling interests, as adjusted to exclude certain additional items, including, facility preopening expenses, stock compensation expense and other non-recurring costs

or gains

, divided by the aggregate number of shares of Class A and Class B common stock outstanding as of the end of the period.

In addition, this press release presents systemwide metrics to analyze the results of operations. These systemwide metrics include systemwide net patient services revenue. Systemwide metrics treat our unconsolidated facilities as if they were consolidated.

These non-GAAP financial measures, Adjusted EBITDA, Adjusted earnings per share and systemwide metrics, are commonly used by management and investors as performance measures. The Company’s non-GAAP financial measures are not considered measures of financial performance under U.S. generally accepted accounting principles (GAAP), and the items excluded therefrom are significant components in understanding and assessing our financial performance. These non-GAAP financial measures should not be considered in isolation or as an alternative to GAAP measures such as net income, cash flows provided by or used in operating, investing or financing activities or other financial statement data presented in our consolidated financial statements as an indicator of financial performance. Reconciliations of non-GAAP financial measures are provided in this press release. Since these non-GAAP financial measures are not measures determined in accordance with GAAP and are susceptible to varying calculations, these measures, as presented, may not be comparable to other similarly titled measures of other companies.

Condensed

Consolidated Statements of Operations and Other Information

unaudited;

in thousands, except shares, per share data and other information)

Three months ended

Patient service revenue

133,288

95,902

Provision for bad debt

(27,053)

(14,945)

Net patient service revenue

106,235

80,957

6,534

496

Total net operating revenue

112,769

81,453

Equity in earnings (loss) of unconsolidated joint ventures

2,501

(694)

Operating expenses:

Salaries, wages and benefits

66,815

48,880

General and administrative

16,264

10,464

Other operating expenses

15,013

11,305

Depreciation and amortization

4,371

4,756

Total operating expenses

102,463

75,405

Income from operations

12,807

5,354

Other expense:

Interest expense

(1,826)

(3,274)

Total other expense

Income before provision for income taxes

10,981

2,080

Provision for income taxes

3,118

478

7,863

1,602

Less: Net income attributable to the non-controlling interest

3,330

1,008

Net income attributable to Adeptus Health Inc.

4,533

594

Net income per share of Class A common stock:

0.32

0.06

Diluted

Weighted average shares of Class A common stock:

14,373,699

9,906,845

Other information

Number of systemwide facilities, including two hospitals

90

audited; in thousands)

4,808

1,826

3,274

Preopening expenses

1,941

2,099

Stock compensation expense

1,088

549

Duplicative billing effort

208

887

505

Total adjustments

13,876

11,661

21,739

13,263

Includes the Company’s proportionate share of depreciation and amortization related to its joint ventures

audited; in thousands, except shares, per share data and other information)

Weighted average common shares outstanding

Class A common shares

Class B common shares

6,510,177

10,781,153

Total Class A and B common shares

20,883,876

20,687,998

Net income attributable to non-controlling interest

Total net income

Adjustments:

Preopening expenses

Stock compensation expense

Duplicative billing effort

Other

Total adjustments

4,124

3,153

Tax impact of adjustments

(1,443)

(1,104)

Tax adjustment resulting from applying effective tax rate

(725)

(250)

Adjusted net income

9,819

3,401

Adjusted net income per share

0.47

0.16

Reflects the removal of the tax benefit associated with the adjustments

Represents adjusting to a normalized effective tax rate of 35%

Net Patient Services Revenue

unaudited; in thousands

Net Patient Services Revenue:

Consolidated facilities

Unconsolidated joint ventures

34,125

3,004

140,360

83,961

Condensed Consolidated Balance Sheets

(in thousands)

ASSETS

(unaudited)

(audited)

Current assets

3,656

16,037

Accounts receivable, less allowance for doubtful accounts of $

38,880

and $28,818, respectively

77,397

65,954

Other receivables and current assets

38,640

31,532

Medical supplies inventory

5,673

5,167

Total current assets

125,366

118,690

Property and equipment, net

68,303

70,187

Investment in unconsolidated joint ventures

45,605

43,104

Deposits

1,010

1,163

Deferred tax asset

204,491

206,265

Intangibles, net

17,790

18,235

Goodwill

61,009

Other long term assets

2,767

2,950

Total assets

526,341

521,603

LIABILITIES AND SHAREHOLDERS' EQUITY

Current liabilities

Accounts payable and accrued expenses

28,494

27,521

Accrued compensation

20,137

23,197

Current maturities of long-term debt

6,910

7,585

Current maturities of capital lease obligations

107

102

Deferred rent

944

858

Total current liabilities

56,592

59,263

Long-term debt, less current maturities

112,141

113,563

Payable to related parties pursuant to tax receivable agreement

191,302

Capital lease obligation, less current maturities

3,925

3,954

4,207

3,837

Total liabilities

368,167

371,919

Commitments and contingencies

Shareholders' equity

Preferred stock, par value $0.01 per share; 10,000,000 shares authorized and zero shares issued and outstanding at March 31, 2016

Class A common stock, par value $0.01 per share; 50,000,000 shares authorized, 14,

565,716

and 14,257,187 shares issued and outstanding at March 31, 2016 and December 31, 2015, respectively

146

143

Class B common stock, par value $0.01 per share; 20,000,000 shares authorized, 6,

507,738

and 6,510,738

Additional paid in capital

86,253

85,457

Retained earnings

10,684

6,323

Non-controlling interest

61,026

57,696

Total equity

158,174

149,684

Total liabilities and shareholders' equity

Condensed Consolidated Statements of Cash Flows

Cash flows from operating activities:

Adjustments to reconcile net income to net cash used in operating activities:

Loss from the disposal or impairment of assets

Depreciation and amortization

Deferred tax benefit

1,774

255

Amortization of deferred loan costs

193

219

Provision for bad debts

27,053

14,945

Equity in (earnings) loss of unconsolidated joint ventures

(2,501)

694

Stock-based compensation

Changes in operating assets and liabilities:

Restricted cash

(3,073)

Accounts receivable

(38,496)

(26,900)

Other receivables and current assets

(7,108)

1,109

Medical supplies inventory

(506)

(126)

Other long-term assets

183

17

Accounts payable and accrued expenses

1,271

(7,004)

Accrued compensation

(3,060)

543

Deferred rent

456

Net cash used in operating activities

(7,417)

(11,961)

Cash flows from investing activities:

675

Proceeds from the sale of property and equipment

1,517

Capital expenditures

(2,044)

(1,620)

Net cash (used

) provided by investing activities

(1,891)

572

Cash flows from financing activities:

Proceeds from long-term borrowings

14,000

24,000

Payment of deferred loan costs

(80)

Payments on borrowings

(16,290)

(642)

Payments of capital lease obligations

(24)

(19)

Restricted stock forfeited on vesting to satisfy withholding requirements

(587)

Tax distribution to unit holders

(172)

) provided by financing activities

23,259

Net (decrease) increase in cash and cash equivalents

(12,381)

11,870

Cash, beginning of period

2,002

Cash, end of period

13,872

The above information was disclosed in a filing to the SEC. To see the filing, click here.

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