[March 13, 2014] |
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CRC Health Corporation Announces Refinance of Outstanding Indebtedness
CUPERTINO, Calif. --(Business Wire)--
CRC Health Corporation, a leading provider of substance abuse treatment
is seeking to refinance all of its outstanding indebtedness under its
existing senior secured credit agreement and its senior subordinated
bonds and to retire a portion of its parent company indebtedness. This
new indebtedness may be subject to interest rates that are different
from the interest rates on the Company's existing debt instruments and
the Company will be obligated to pay fees in connection with securing
the new debt. The Company has targeted to complete the refinancing by
the end of the first quarter of 2014. Completion of the proposed
refinancing is subject to meeting customary due diligence and closing
conditions. There is no assurance that the Company will be successful in
completing the proposed refinancing.
In conjunction with the proposed refinancing of the Company's
outstanding indebtedness, the Company will be presenting to prospective
lenders under the Company's new debt certain information related to its
preliminary financial results for the year ended December 31, 2013,
which includes the following:
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Net client service revenues from continuing operations of
approximately $414.6 million;
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Pro forma net client service revenues from continuing operations of
approximately $456.0 million, reflecting $43.4 million of additional
revenue from the acquisition of Habit OPCO on February 28, 2014 and a
$2.0 million reductio of revenue related to certain discontinued
operations activity initiated in Q1 2014;
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Adjusted EBITDA of approximately $100.5 million; and
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Pro forma Adjusted EBITDA of approximately $119.8 million, reflecting
the acquisition of Habit OPCO on February 28, 2014 and certain
discontinued operations and other cost savings actions initiated Q1
2014.
The information set forth above is based on the Company's estimates of
its results of operations that are unaudited and subject to the
completion of its financial statement closing process and annual
financial audit. The Company's actual results for the period may differ
from estimated results. During the course of the financial statement
closing process and annual financial audit, the Company may identify
items that would require it to make adjustments, which may be material,
to the estimates set forth above. These estimates constitute
forward-looking statements and are subject to risks and uncertainties.
There can be no assurance that these preliminary results will not differ
from the financial information reflected in the Company's financial
statements for such period when they have been finalized or that these
preliminary results are indicative of future performance.
Non-GAAP Financial Measures
Adjusted EBITDA and Pro forma Adjusted EBITDA are supplemental non-GAAP
financial measures that CRC believes provide useful information to both
management and investors concerning its ability to comply with certain
covenants which will be tied to these measures in its prospective
borrowing arrangements and to meet its future debt obligations. CRC also
believes that reporting of these items allows management and investors
to better compare CRC's financial performance from period-to-period, and
to better compare CRC's financial performance with that of its
competitors. Adjusted EBITDA and Pro forma Adjusted EBITDA should not be
considered as alternatives to net income (loss) or cash flows from
operating activities (which are determined in accordance with GAAP) and
are not being presented as indicators of operating performance or
measures of liquidity. Other companies may define Adjusted EBITDA and
Pro forma Adjusted EBITDA differently and as a result, such measures may
not be comparable to our Adjusted EBITDA and Pro forma Adjusted EBITDA.
The Company is unable to provide a reconciliation of net income (loss)
to Adjusted EBITDA because, at this time, we are in the process of
completing our financial statements for the fiscal year ended December
31, 2013 and are finalizing the accounting for income taxes, which
affects net income (loss) but not Adjusted EBITDA. Also, any adjustment
to net income (loss) as a result of such accounting for income taxes
will not have any impact on the pro forma numbers reflected above.
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