AAC Holdings Inc. (OTC: AACH), the parent company of American Addiction Centers, continued its efforts to curb expenses and navigate financial difficulties in the third quarter of 2019. While the company managed to reduce operating costs by $23 million—or 28%—compared to the same period in the previous year, it still reported a loss of $13.1 million for the quarter.
Despite these cost-cutting measures, AAC Holdings faced another major setback early in Q4 when it was delisted from the New York Stock Exchange (NYSE) after failing to meet the continued listing standards.
Remaining Public Despite Delisting
CEO Michael Cartwright addressed the company’s transition during a Q3 earnings call, reassuring investors that AAC Holdings would remain publicly traded.
“We are finalizing our plans to be listed on a new exchange,” Cartwright stated. “The stock is currently traded on the OTC under the ticker symbol AACH. We will remain a publicly traded company and still follow all of the same SEC reporting requirements that we have historically followed.”
AAC Holdings first went public in 2014, though its flagship addiction treatment provider, American Addiction Centers, has been in operation since 2007. The organization currently runs 11 inpatient facilities, 24 outpatient centers, and four sober-living residences across the country.
Signs of Optimism Despite Financial Struggles
While the company has encountered significant financial headwinds, leadership remains cautiously optimistic about recent progress.
“Though we still have a lot of work to do, I am pleased with the sequential progress we have been making this year,” Cartwright said. “For the third consecutive quarter, we continue to see positive momentum in 2019.”
Cartwright attributed these improvements to a series of cost-saving initiatives introduced in late 2018. These efforts include the consolidation of operations in Las Vegas, Southern California, and Southern Florida, the sale of its Louisiana operations, and reductions in corporate expenses, including lab operations.
“There are several additional vendor cost-saving initiatives that we have been working on that will result in further corporate expense savings beginning in 2020,” he added.
Financial Performance and Future Outlook
AAC Holdings posted $58.9 million in revenue for Q3, reflecting a 7% decline from the previous quarter. In light of these challenges, company leaders adjusted their full-year revenue guidance to fall between $230 million and $240 million, with adjusted EBITDA projected in the range of $6 million to $8 million.
As AAC Holdings continues to restructure and implement cost-saving strategies, investors and stakeholders alike will be watching closely to see whether the company can stabilize and regain its financial footing in the addiction treatment industry.
