American Renal Associates Holdings, Inc. Announces First Quarter 2020 Results

BEVERLY, Mass.–(BUSINESS WIRE)–American Renal Associates Holdings, Inc. (NYSE: ARA) (the “Firm”), a number one kidney care and dialysis supplier centered on partnering with native nephrologists, at present introduced monetary and working outcomes for the primary quarter ended March 31, 2020. The Firm additionally offered an replace on its COVID-19 impression and introduced that it up to date its 2020 Outlook for Adjusted EBITDA-NCI. These updates are highlighted later on this launch.

Sure metrics, together with these expressed on an adjusted foundation, are Non-GAAP monetary measures (See “Use of Non-GAAP Monetary Measures” and the reconciliation tables additional under).

First Quarter 2020 Highlights (all proportion adjustments evaluate Q1 2020 to Q1 2019 until famous):

• Affected person service working revenues elevated 0.7% to $193.2 million;
• Web loss attributable to American Renal Associates Holdings, Inc. was $7.2 million as in comparison with a internet lack of $10.5 million in Q1 2019;
• Adjusted EBITDA much less noncontrolling pursuits (“Adjusted EBITDA-NCI”) was $12.9 million as in comparison with $13.9 million in Q1 2019;
• Adjusted internet loss attributable to American Renal Associates Holdings, Inc. was $9.Four million, or $(0.29) per share, for Q1 2020;
• Whole dialysis remedies elevated 4.8%, of which 4.4% was non-acquired development. Normalized whole therapy development was 4.7%, and normalized non-acquired therapy development was 4.4%; and
• As of March 31, 2020, the Firm operated 247 outpatient dialysis clinics serving greater than 17,300 sufferers.

Joseph (Joe) Carlucci, Chairman and Chief Government Officer, mentioned, “The previous a number of weeks have represented an unprecedented time for our nation and for our well being care system as a result of COVID-19 pandemic. Throughout this time, our accountability as a supplier of life-sustaining dialysis providers couldn’t be extra necessary, and I’m happy with how our group has risen to the event. ARA caregivers throughout 27 states and the District of Columbia are taking part in a crucial position to maintain sufferers and employees wholesome and secure. Now we have remained operational all through our community of 247 dialysis clinics, and have been working collaboratively with dialysis firm friends, hospitals and different well being care suppliers to handle a rising variety of COVID-19 constructive sufferers in each the inpatient and outpatient dialysis settings. I’m grateful to our employees and doctor companions for all the pieces they’re doing throughout this public well being disaster.”

Monetary and working highlights embrace:

Income: Affected person service working revenues for the primary quarter of 2020 had been $193.2 million, a rise of 0.7%, as in comparison with $191.Eight million for the prior-year interval, which was primarily resulting from a rise of 4.8% within the variety of dialysis remedies, partially offset by opposed adjustments in business therapy reimbursement charges ensuing from the rise in our in-network business payor relationships, in addition to weaker collections from sure payors.

Therapy Quantity: Whole dialysis remedies for the primary quarter of 2020 had been 619,549, representing a rise of 4.8% over the primary quarter of 2019. Non-acquired therapy development was 4.4%, and purchased therapy development was 0.3% for the primary quarter of 2020. Normalized whole therapy development was 4.7%, and non-acquired therapy development was 4.4% as in comparison with Q1 2019.

Clinic Exercise: As of March 31, 2020, the Firm offered providers at 247 outpatient dialysis clinics serving 17,385 sufferers. In the course of the first quarter of 2020, we opened one de novo clinic.

Web loss, Web revenue attributable to noncontrolling pursuits, Web loss attributable to American Renal Associates Holdings, Inc., Adjusted EBITDA and Adjusted EBITDA-NCI:

		(Unaudited)
		Three Months Ended March 31,								Enhance (Lower)
(in hundreds)		2020				2019				Quantity				Share Change
Web loss		$	(2,328	)		$	(5,145	)		$	2,817			(54.8	)%
Web revenue attributable to noncontrolling pursuits		(4,906		)		(5,334		)		$	428			8.0	%
Web loss attributable to American Renal Associates Holdings, Inc.		$	(7,234	)		$	(10,479	)		$	3,245			NM*
Non-GAAP monetary measures**:
Adjusted EBITDA		$	17,828			$	19,211			$	(1,383	)		(7.2	)%
Adjusted EBITDA-NCI		$	12,922			$	13,877			$	(955	)		(6.9	)%

__________________________________
*			Not Significant
**			See “Reconciliation of Non-GAAP Monetary Measures.”

Working Bills: Affected person care prices for the primary quarter of 2020 had been $154.2 million, or 79.8% of affected person service working revenues, as in comparison with $148.2 million, or 77.3% of affected person service working revenues, within the prior-year interval. Basic and administrative bills had been $24.9 million, or 12.9% of affected person service working revenues, as in comparison with $25.6 million, or 13.3% of affected person service working revenues, within the prior-year interval.

Money Circulate: Money offered by working actions for the primary quarter of 2020 was $13.7 million, as in comparison with money utilized in working actions of $10.Zero million within the prior-year interval. Adjusted money offered by working actions much less distributions to noncontrolling pursuits (see “Reconciliation of Non-GAAP Monetary Measures”) for the primary quarter of 2020 was $2.9 million, as in comparison with adjusted money utilized in working actions of $14.7 million within the prior-year interval. Whole capital expenditures for the primary quarter of 2020 had been $5.Eight million, in comparison with $8.5 million within the prior-year interval. Capital expenditures for the three months ended March 31, 2020 included $4.Three million for expansions and new clinic growth and $1.5 million for different capital expenditures, in comparison with $6.9 million and $1.6 million, respectively, for the three months ended March 31, 2019.

Stability Sheet: At March 31, 2020, the Firm’s stability sheet included consolidated money of $62.Four million and consolidated debt of $617.9 million, together with the present portion of long-term debt. Excluding clinic-level debt not assured by the Firm and clinic-level money not owned by the Firm, Adjusted owned internet debt (see “Reconciliation of Non-GAAP Monetary Measures”) was $519.Four million at March 31, 2020, as in comparison with $515.2 million at December 31, 2019. As of March 31, 2020, we had been in compliance with the consolidated internet leverage ratio covenant in our Credit score Settlement. As of March 31, 2020, internet affected person accounts receivable was $101.Eight million.

COVID-19 Replace

The protection of our sufferers, employees and doctor companions continues to be our major focus, and now we have undertaken a variety of steps to offer for his or her safety and allow our continued operation within the face of the pandemic. We’re following Facilities for Illness Management and Prevention steerage and dealing carefully with native and nationwide well being authorities to make sure we implement applicable an infection management and scientific finest practices in response to COVID-19. As well as, now we have created a devoted COVID-19 process drive to proactively implement enterprise continuity plans and develop measures to make sure the continued availability of our dialysis providers whereas sustaining affected person and employees security. These measures embrace:

• Proscribing entry to our clinics to solely sufferers, employees and medical professionals;
• Screening all people for signs and publicity to COVID-19 earlier than permitting entry to our clinics;
• Implementing a masks coverage for each affected person and employees member who enters our clinics and requiring that masks be worn always in our clinics;
• Elevated purchases and use of non-public protecting gear for sufferers and employees and of cleansing and sanitization supplies at our services to keep up an infection management protocols that meet CDC pointers;
• Securing COVID-19 testing for sufferers and employees;
• Implementing screening procedures for company workplace employees previous to getting into our company places of work, requiring social distancing inside workspaces and all through our company workplace, and proscribing entry to our company places of work to solely ARA employees;
• Partaking a doctor infectious illness guide to help us within the growth of insurance policies and procedures to guard our sufferers and employees;
• Establishing devoted COVID-19 therapy shifts at sure of our clinics, the place mandatory, to look after sufferers with confirmed or suspected COVID-19; and
• Modifying our sick depart coverage to accommodate quarantine and isolation when warranted.

Along with these security measures, we carried out a hazard pay program to offer elevated pay to our clinic employees on the entrance traces of the pandemic. We at present count on this program to be restricted to the second quarter however we could prolong or shorten it as applicable in gentle of developments with the pandemic. These and different measures now we have taken in response to COVID-19 have resulted in elevated working bills, together with increased wage and wage expense from the hazard pay program, incremental hours and time beyond regulation wanted to employees the devoted therapy shifts for sufferers with confirmed or suspected COVID-19, elevated bills from the upper utilization and price of non-public protecting gear, and extra prices to buy extra provides and cleansing supplies. As well as, now we have incurred extra company workplace prices associated to authorized, consulting prices and cleansing prices, in addition to elevated purchases of pc gear and knowledge know-how to offer extra infrastructure for employees who’re working from house. These added bills started to rise throughout the month of March, and have become extra important into April. We count on to incur many of those extra working bills in the course of the pandemic, and if the severity or geographic protection of the pandemic will increase, these extra bills might improve.

From a quantity perspective, sufferers affected by end-stage renal illness usually have co-morbidities that always place them at elevated danger with COVID-19, leading to elevated hospitalizations, missed remedies and better mortality. By way of March 31, 2020, we skilled an immaterial discount in therapy quantity because of sufferers contracting COVID-19, however this impression elevated subsequent to March 31, 2020 and will develop into materials within the occasion of a protracted or more and more extreme pandemic.

In response to the pressures we’re seeing from COVID-19, in addition to our first quarter 2020 efficiency, which was under our inside forecasts, we started implementing a sequence of actions throughout the second quarter meant to scale back company bills. A few of the actions we’ve taken embrace short-term reductions in base pay of our senior administration group and different company expense initiatives. None of those adjustments will impression our means to ship life-sustaining dialysis providers or are anticipated to instantly impression clinic employees or our regional operations groups which are offering on-site help to our clinics throughout these unprecedented occasions. We don’t imagine any of those adjustments will have an effect on the standard of administration help providers we offer to our clinic operations.

As well as, we’re appreciative of Congress and the Administration’s recognition of the burden this pandemic is having on our nation’s healthcare system and suppliers like ARA who’ve remained absolutely operational throughout this disaster to proceed to offer life-sustaining care and forestall, put together and reply to COVID-19. The passage of the CARES Act in late March, together with different regulatory aid from CMS, will assist healthcare suppliers like ARA handle by way of this public well being disaster. Some facets of this aid obtained by ARA embrace the next:

• Roughly $5 million of extra income as a result of CARES Act provision that eliminates the two% sequestration lower from Might 1 till December 31, 2020;
• Roughly $27 million of CARES Act grant funds obtained throughout April 2020, though these funds are topic to phrases and situations, a few of which stay unclear, and we could not be capable to make the most of and retain all of this cash;
• Roughly $83 million of advance funds on future Medicare income obtained throughout April 2020 below CMS’ Accelerated and Advance Cost Program;
• An estimated $12 million to $13 million liquidity profit over the subsequent three quarters associated to the CARES Act provision that allows cost deferral of the employer portion of social safety payroll taxes; and
• An estimated money tax refund of roughly $5 million, anticipated earlier than December 31, 2020, associated to particular tax code provisions of the CARES Act.

Up to date Outlook for 2020 Adjusted EBITDA-NCI:

The Firm is updating its outlook for 2020 Adjusted EBITDA-NCI to be in a spread of $87 million to $95 million, as in comparison with the earlier vary of $90 million to $95 million. The Firm re-affirmed its dedication to scale back its leverage ratio by year-end 2020, as in comparison with 5.9x at December 31, 2019. Given the chance of serious variability within the impression of COVID-19 and different components, the Firm is withdrawing different beforehand issued 2020 extra element associated to its outlook.

The Firm just isn’t offering a quantitative reconciliation of our Non-GAAP outlook to the corresponding GAAP info as a result of the GAAP measures that we exclude from our Non-GAAP outlook aren’t accessible with out unreasonable effort on a forward-looking foundation resulting from their unpredictability, excessive variability, complexity and low visibility. These excluded GAAP measures embrace noncontrolling pursuits, curiosity expense, revenue taxes, sure authorized and different issues, and different costs. We count on the variability of those costs to have a probably unpredictable, and probably important, impression on our future GAAP monetary outcomes.

Please see the “Ahead-Trying Statements” part of this launch for a dialogue of sure dangers to our outlook.

Convention Name

American Renal Associates Holdings, Inc. will maintain a convention name to debate this launch on Tuesday, Might 12, 2020, at 9:00 a.m. Jap time. Traders can have the chance to take heed to the convention name by dialing (877) 407-8029, or for worldwide callers (201) 689-8029, or could pay attention over the Web by going to the Investor Relations part at www.ir.americanrenal.com. For many who can’t take heed to the dwell broadcast, a replay will likely be accessible and will be accessed by dialing (877) 660-6853, or for worldwide callers (201) 612-7415. The convention ID for the dwell name and the replay is 13697055.

About American Renal Associates

American Renal Associates (“ARA”) is a number one supplier of outpatient dialysis providers in america. As of March 31, 2020, ARA operated 247 dialysis clinic places in 27 states and the District of Columbia serving greater than 17,300 sufferers with finish stage renal illness. ARA operates principally by way of a doctor partnership mannequin, by which it companions with roughly 400 native nephrologists to develop, personal and function dialysis clinics. ARA’s Core Values emphasize taking excellent care of sufferers, offering physicians with scientific autonomy and operational help, hiring and retaining the very best employees and offering complete administration providers. For extra details about American Renal Associates, go to www.americanrenal.com.

Ahead-Trying Statements

Statements on this press launch which are “forward-looking statements” throughout the which means of the Personal Securities Litigation Reform Act of 1995, together with statements relating to our outlook for Adjusted EBITDA-NCI, are primarily based upon at present accessible info, working plans and projections about future occasions and developments. Terminology equivalent to “anticipate,” “imagine,” “ponder,” “estimate,” “count on,” “forecast,” “intend,” “could,” “goal,” “outlook,” “plan,” “potential,” “undertaking,” “search,” “ought to,” “technique,” “goal” or “will” or variations of such phrases or related expressions are meant to determine forward-looking statements, though not all forward-looking statements include such phrases.

Ahead-looking statements inherently contain dangers and uncertainties that might trigger precise outcomes to vary materially from these predicted in such forward-looking statements. Such dangers and uncertainties embrace, amongst others, the impact of the continued COVID-19 pandemic and responses thereto; the impact of the restatement of our beforehand issued monetary outcomes and associated issues; our means to remediate materials weaknesses in our inside controls over monetary reporting; persevering with decline within the variety of sufferers with business insurance coverage, together with because of adjustments to the healthcare exchanges or adjustments in rules or enforcement of rules relating to the healthcare exchanges and challenges from business payors or any regulatory or different adjustments resulting in adjustments within the means of sufferers with business insurance coverage protection to obtain charitable premium help; decline in business payor reimbursement charges, together with with respect to Medicare Benefit plans; the last word decision of the Facilities for Medicare and Medicaid Providers Interim Last Rule printed December 14, 2016 associated to dialysis services Situations for Protection (CMS 3337-IFC), together with an issuance of a unique however associated Last Rule; discount of government-based payor reimbursement charges or inadequate fee will increase or changes that don’t cowl all of our working prices; our means to efficiently develop de novo clinics, purchase current clinics and entice new nephrologist companions; our means to compete successfully within the dialysis providers business; the efficiency of our three way partnership subsidiaries and their means to make distributions to us; adjustments to the Medicare end-stage renal illness (“ESRD”) program that might have an effect on reimbursement charges and analysis standards, in addition to adjustments in Medicaid or different non-Medicare authorities packages or cost charges, together with the ESRD potential cost fee system remaining rule for 2020 issued October 31, 2019; federal or state healthcare legal guidelines that might adversely have an effect on us; our means to adjust to all the complicated federal, state and native authorities rules that apply to our enterprise, together with these in reference to federal and state anti-kickback legal guidelines and state legal guidelines prohibiting the company apply of medication or fee-splitting; heightened federal and state investigations and enforcement efforts; the impression of the SEC investigation; adjustments within the availability and price of erythropoietin-stimulating brokers and different prescribed drugs utilized in our enterprise; adjustments within the reimbursement charges of the calcimimetics pharmaceutical class reimbursed below the Medicare Transitional Drug Add-on Cost Adjustment; growth of recent applied sciences or authorities regulation that might lower the necessity for dialysis providers or lower our in-center affected person inhabitants; our means to well timed and precisely invoice for our providers and meet payor billing necessities; claims and losses referring to malpractice, skilled legal responsibility and different issues; the sufficiency of our insurance coverage protection for these claims and rising insurances prices, and unfavorable publicity or reputational injury arising from such issues; lack of any members of our senior administration; injury to our fame or our model and our means to keep up model recognition; our means to keep up relationships with our medical administrators and renew our medical director agreements; shortages of certified expert scientific personnel, or increased than regular turnover charges; competitors and consolidation within the dialysis providers business; deterioration in financial situations, notably in states the place we function a lot of clinics, or disruptions within the monetary markets or the results of pure or different disasters, public well being crises or opposed climate occasions; the participation of our doctor companions in materials strategic and working choices and our means to favorably resolve any disputes; our means to honor obligations below the three way partnership working agreements with our doctor companions had been they to train sure put rights and different rights; unauthorized disclosure of personally identifiable, protected well being or different delicate or confidential info; our means to fulfill our obligations and adjust to restrictions below our substantial degree of indebtedness; and the power of our principal stockholder, whose pursuits could battle with yours, to strongly affect or successfully management our company choices.

For extra info and different components that might trigger ARA’s precise outcomes to materially differ from these set forth herein, please see ARA’s filings with the SEC. Traders are cautioned to not place undue reliance on any such forward-looking statements, which communicate solely as of the date they’re made. ARA undertakes no obligation to replace any forward-looking assertion, whether or not because of new info, future occasions or in any other case.

Use of Non-GAAP Monetary Measures

Along with the outcomes ready in accordance with usually accepted accounting ideas in america (“GAAP”) offered all through this press launch, the Firm has introduced the next Non-GAAP monetary measures: Adjusted EBITDA, Adjusted EBITDA much less noncontrolling pursuits, Adjusted internet revenue (loss) attributable to American Renal Associates Holdings, Inc., Adjusted money offered by (utilized in) working actions and Adjusted owned internet debt, which exclude numerous objects detailed within the hooked up “Reconciliation of Non-GAAP Monetary Measures.”

These Non-GAAP monetary measures aren’t meant to exchange monetary efficiency and liquidity measures decided in accordance with GAAP. Quite, they’re introduced as supplemental measures of the Firm’s efficiency and liquidity that administration believes could improve the analysis of the Firm’s ongoing working outcomes. Please see “Reconciliation of Non-GAAP Monetary Measures” for extra the explanation why these measures are offered.

American Renal Associates Holdings, Inc. and Subsidiaries Consolidated Statements of Operations (Unaudited) ({dollars} in hundreds, aside from share knowledge)
		Three Months Ended March 31,
		2020				2019
Affected person service working revenues		$	193,182			$	191,762
Working bills:
Affected person care prices		154,222				148,181
Basic and administrative		24,905				25,599
Depreciation, amortization and impairment		8,527				10,066
Sure authorized and different issues		2,287				5,291
Whole working bills		189,941				189,137
Working revenue		3,241				2,625
Curiosity expense, internet		(11,012		)		(8,750		)
Change in truthful worth of revenue tax receivable settlement		1,699				1,682
Loss earlier than revenue taxes		(6,072		)		(4,443		)
Revenue tax (profit) expense		(3,744		)		702
Web loss		(2,328		)		(5,145		)
Much less: Web revenue attributable to noncontrolling pursuits		(4,906		)		(5,334		)
Web loss attributable to American Renal Associates Holdings, Inc.		(7,234		)		(10,479		)
Much less: Change within the distinction between the redemption worth and estimated truthful worth for accounting functions of the associated noncontrolling pursuits		(258		)		(741		)
Web loss attributable to widespread shareholders		$	(7,492	)		$	(11,220	)
Loss per share:
Fundamental		$	(0.23	)		$	(0.35	)
Diluted		$	(0.23	)		$	(0.35	)
Weighted-average variety of widespread shares excellent:
Fundamental		32,459,792				32,187,715
Diluted		32,459,792				32,187,715

American Renal Associates Holdings, Inc. and Subsidiaries Consolidated Statements of Money Flows (Unaudited) ({dollars} in hundreds)
		Three Months Ended March 31,
Working actions		2020				2019
Web loss		$	(2,328	)		$	(5,145	)
Changes to reconcile internet revenue to money offered by working actions:
Depreciation, amortization and impairment		8,527				10,066
Amortization of reductions, charges and deferred financing prices		810				486
Inventory-based compensation		2,723				1,401
Deferred taxes		1,650				214
Change in truthful worth of revenue tax receivable settlement		(1,699		)		(1,682		)
Loss (acquire) on sale of belongings		427				(395		)
Different non-cash costs, internet		116				(168		)
Change in working belongings and liabilities, internet of acquisitions:
Accounts receivable		311				206
Inventories		174				4,502
Pay as you go bills and different present belongings		(6,165		)		1,111
Different belongings		(2,908		)		(197		)
Proper-of-use belongings and working lease liabilities		111				(1,801		)
Accounts payable		7,714				(12,667		)
Accrued compensation and advantages		(4,346		)		(4,410		)
Accrued bills and different liabilities		8,561				(1,514		)
Money offered by (utilized in) working actions		13,678				(9,993		)
Investing actions
Purchases of property, gear and intangible belongings		(5,772		)		(8,500		)
Proceeds from sale of clinics		—				3,300
Money paid for acquisitions		—				(6,590		)
Money utilized in investing actions		(5,772		)		(11,790		)
Financing actions
Proceeds from revolving credit score facility and time period loans, internet of deferred financing prices		41,606				46,857
Funds on long-term debt		(12,137		)		(12,661		)
Dividends and dividend equivalents paid		(5		)		(11		)
Proceeds from train of inventory choices		154				70
Repurchase of vested restricted inventory awards withheld on internet share settlement		(427		)		(338		)
Distributions to noncontrolling pursuits		(10,748		)		(4,750		)
Contributions from noncontrolling pursuits		1,536				2,410
Purchases of noncontrolling pursuits		—				(223		)
Money offered by financing actions		19,979				31,354
Enhance in money		27,885				9,571
Money and restricted money at starting of interval		34,494				55,300
Money at finish of interval		$	62,379			$	64,871
Supplemental Disclosure of Money Circulate Data
Money paid for revenue taxes		$	100			$	97
Money paid for curiosity		8,583				6,325

American Renal Associates Holdings, Inc. and Subsidiaries Consolidated Stability Sheets ({dollars} in hundreds, aside from share knowledge)
		March 31, 2020				December 31, 2019
Belongings		(Unaudited)
Money		$	62,379			$	34,494
Accounts receivable, much less allowance for uncertain accounts of $1,040 and $1,258, respectively		101,839				102,150
Inventories		7,574				7,752
Pay as you go bills and different present belongings		22,925				22,268
Revenue tax receivable		8,769				3,251
Present belongings held on the market		49,197				50,099
Whole present belongings		252,683				220,014
Property and gear, internet of accrued depreciation of $224,164 and $215,471, respectively		148,110				151,175
Working lease right-of-use belongings		138,640				133,899
Intangible belongings, internet of accrued amortization of $25,295 and $25,087, respectively		24,279				24,486
Different long-term belongings		21,725				18,608
Goodwill		538,609				538,609
Whole belongings		$	1,124,046			$	1,086,791
Liabilities and Fairness
Accounts payable		$	57,253			$	49,539
Accrued compensation and advantages		32,850				37,196
Accrued bills and different present liabilities		47,748				37,593
Present portion of long-term debt		38,011				38,779
Present portion of working lease liabilities		22,926				22,061
Present liabilities held on the market		4,291				5,767
Whole present liabilities		203,079				190,935
Lengthy-term debt, much less present portion		579,882				548,835
Lengthy-term working lease liabilities, much less present portion		128,055				123,792
Revenue tax receivable settlement payable		912				3,000
Different long-term liabilities		6,591				6,501
Deferred tax liabilities		4,040				2,706
Whole liabilities		922,559				875,769
Commitments and contingencies
Noncontrolling pursuits topic to place provisions		127,737				126,483
Fairness
Most well-liked inventory, $0.01 par worth; 1,000,00Zero shares licensed; none issued
Frequent inventory, $0.01 par worth; 300,000,00Zero shares licensed; 33,736,896 and 32,976,416 issued and excellent at March 31, 2020 and December 31, 2019, respectively		199				197
Extra paid-in capital		102,789				100,744
Receivable from noncontrolling pursuits		(1,568		)		(531		)
Amassed deficit		(185,475		)		(178,241		)
Amassed different complete loss, internet of tax		(2,536		)		(1,619		)
Whole American Renal Associates Holdings, Inc. deficit		(86,591		)		(79,450		)
Noncontrolling pursuits not topic to place provisions		160,341				163,989
Whole fairness		73,750				84,539
Whole liabilities and fairness		$	1,124,046			$	1,086,791

American Renal Associates Holdings, Inc. and Subsidiaries Unaudited GAAP, Non-GAAP, and Different Supplemental Enterprise Metrics ({dollars} in hundreds, besides per therapy quantities)
		Three Months Ended
		March 31, 2020				December 31, 2019				March 31, 2019
Dialysis Clinic Exercise:
Variety of clinics (as of finish of interval)		247				246				243
Variety of de novo clinics opened (throughout interval)		1				2				2
Variety of acquired clinics (throughout interval)		—				—				2
Bought or merged clinics (throughout interval)		—				—				(2		)
Sufferers and Therapy Quantity:
Sufferers (as of finish of interval)		17,385				17,306				17,018
Variety of remedies		619,549				628,817				591,365
Variety of therapy days		78				79				77
Remedies per day		7,943				7,960				7,680
Sources of therapy development (12 months over 12 months % change):
Non-acquired development		4.4		%		3.2		%		3.9		%
Normalized non-acquired development		4.4		%		4.4		%		5.3		%
Acquired development		0.3		%		1.6		%		1.9		%
Whole therapy development		4.8		%		4.8		%		5.8		%
Normalized Whole therapy development		4.7		%		6.0		%		7.2		%
Income:
Affected person service working revenues		$	193,182			$	206,079			$	191,762
Affected person service working revenues per therapy		$	312			$	328			$	324
Bills:
Affected person care prices
Quantity		$	154,222			$	154,394			$	148,181
As a % of affected person service working revenues		79.8		%		74.9		%		77.3		%
Per therapy		$	249			$	246			$	251
Basic and administrative bills
Quantity		$	24,905			$	22,772			$	25,599
As a % of affected person service working revenues		12.9		%		11.1		%		13.3		%
Per therapy		$	40			$	36			$	43
Adjusted normal and administrative bills(1)
Quantity		$	23,655			$	21,653			$	25,899
As a % of affected person service working revenues		12.2		%		10.5		%		13.5		%
Per therapy		$	38			$	34			$	44
Accounts receivable DSO (days)		48				46				47
Adjusted EBITDA*
Adjusted EBITDA together with noncontrolling pursuits		$	17,828			$	32,012			$	19,211
Adjusted EBITDA-NCI		$	12,922			$	22,979			$	13,877
Scientific (quarterly averages):
Dialysis adequacy – % of sufferers with Kt/V > 1.2		99		%		99		%		98		%
Vascular entry – % catheter in use > 90 days		13		%		13		%		12		%

					*			See “Reconciliation of Non-GAAP Monetary Measures.”
					(1)			Adjusted normal and administrative bills per therapy throughout the three months ended March 31, 2020 is adjusted for severance, govt retirement and associated prices of $0.5 million, inventory compensation modification expense of $0.Three million and loss on sale or closure of clinics of $0.Four million. Adjusted normal and administrative bills per therapy throughout the three months ended December 31, 2019 is adjusted for the loss on sale or closure of clinics of $1.1 million. Adjusted normal and administrative bills per therapy throughout the three months ended March 31, 2019 is adjusted for the acquire on sale or closure of clinics of $0.5 million and severance bills of $0.2 million.

American Renal Associates Holdings, Inc. and Subsidiaries Web Loss per Share Reconciliation (Unaudited) ({dollars} in hundreds, besides per share knowledge)
		Three Months Ended March 31,
		2020				2019
Fundamental and Diluted
Web loss attributable to American Renal Associates Holdings, Inc.		$	(7,234	)		$	(10,479	)
Change within the distinction between the redemption worth and estimated truthful worth for accounting functions of the associated noncontrolling pursuits		(258		)		(741		)
Web loss attributable to widespread shareholders		$	(7,492	)		$	(11,220	)
Weighted-average widespread shares excellent, primary		32,459,792				32,187,715
Weighted-average widespread shares excellent, assuming dilution		32,459,792				32,187,715
Loss per share, primary and diluted		$	(0.23	)		$	(0.35	)
Excellent choices and restricted inventory excluded as impression could be anti-dilutive		3,469,001				3,573,305

American Renal Associates Holdings, Inc. and Subsidiaries

Reconciliation of Non-GAAP Monetary Measures

(Unaudited)

({dollars} in hundreds)

We use Adjusted EBITDA and Adjusted EBITDA-NCI to trace our efficiency. “Adjusted EBITDA” is outlined as internet revenue earlier than stock-based compensation and related payroll taxes, depreciation, amortization and impairment, curiosity expense, internet, revenue taxes and different non-income-based tax, change in truthful worth of revenue tax receivable settlement, sure authorized and different issues, severance, govt retirement and associated prices and acquire or loss on sale or closure of clinics. “Adjusted EBITDA-NCI” is outlined as Adjusted EBITDA much less internet revenue attributable to noncontrolling pursuits. We imagine Adjusted EBITDA and Adjusted EBITDA-NCI present info helpful for evaluating our enterprise and an extra understanding of our outcomes of operations from administration’s perspective. We imagine Adjusted EBITDA is useful in highlighting developments as a result of Adjusted EBITDA excludes sure bills that may differ considerably from firm to firm relying on, amongst different issues, long-term strategic choices relating to capital construction and investments, and the tax jurisdictions by which firms function, or that we imagine don’t mirror our core enterprise operations. We imagine Adjusted EBITDA-NCI is useful in highlighting the quantity of Adjusted EBITDA that’s accessible to us after reflecting the pursuits of our three way partnership companions. Adjusted EBITDA and Adjusted EBITDA-NCI aren’t measures of working efficiency computed in accordance with GAAP and shouldn’t be thought of as an alternative choice to working revenue, internet revenue, money flows from operations, or different assertion of operations or money movement knowledge ready in conformity with GAAP, or as measures of profitability or liquidity. As well as, Adjusted EBITDA and Adjusted EBITDA-NCI will not be similar to equally titled measures of different firms and differ from the calculation of “Consolidated EBITDA” below our credit score settlement. Adjusted EBITDA and Adjusted EBITDA-NCI will not be indicative of historic working outcomes, and we don’t imply for this stuff to be predictive of future outcomes of operations or money flows. Adjusted EBITDA and Adjusted EBITDA-NCI have limitations as analytical instruments, and so they shouldn’t be thought of in isolation, or as substitutes for an evaluation of our outcomes as reported below GAAP. A few of these limitations are that Adjusted EBITDA and Adjusted EBITDA-NCI:

• don’t embrace stock-based compensation expense and related payroll taxes;
• don’t embrace depreciation, amortization and impairment—as a result of development and operation of our dialysis clinics requires important capital expenditures, depreciation and amortization are a mandatory aspect of our prices and our means to generate income;
• don’t embrace curiosity expense—as now we have borrowed cash for normal company and facility functions, curiosity expense is a mandatory aspect of our prices and talent to generate income and money flows;
• don’t embrace revenue tax expense or advantages and different non-income-based taxes;
• don’t embrace change in truthful worth of revenue tax receivable settlement;
• don’t embrace prices associated to sure authorized and different issues;
• don’t embrace severance, govt retirement and associated prices; and
• don’t mirror the acquire or loss on sale or closure of clinics.

As well as, Adjusted EBITDA just isn’t adjusted for the portion of earnings that we distribute to our three way partnership companions.

We use Adjusted internet loss attributable to American Renal Associates Holdings, Inc. as a result of it’s a helpful measure to guage our efficiency by excluding the impression of sure objects that we imagine aren’t associated to our regular enterprise operations and/or are a results of adjustments in our liabilities from interval to interval. See the notes to the tables under for additional rationalization of the exclusion of sure objects. By excluding these things, we imagine Adjusted internet loss permits us and buyers to guage our internet loss on a extra constant foundation. “Adjusted internet loss attributable to American Renal Associates Holdings, Inc.” is outlined as Web loss attributable to American Renal Associates Holdings, Inc. plus or minus, as relevant, sure authorized and different issues prices, severance, govt retirement and associated prices, loss (acquire) on sale or closure of clinics, change in valuation allowance for held on the market belongings, change in truthful worth of revenue tax receivable settlement, tax valuation allowance and accounting adjustments in truthful worth of non-controlling curiosity places, internet of taxes. We use the Adjusted weighted common variety of diluted shares to calculate Adjusted internet loss attributable to American Renal Associates Holdings, Inc. per share.

We use Adjusted money offered (used) by working actions much less distributions to NCI as a result of it’s a helpful measure to guage the money movement that’s accessible to the Firm for funding in property, plant and gear, debt service, development and different normal company functions. “Adjusted money offered (used) by working actions much less distributions to NCI” is outlined as money offered by working actions much less distributions to noncontrolling pursuits.

We use Adjusted owned internet debt as a result of we imagine it’s a helpful metric to guage the Firm’s share of pursuits within the money on our consolidated stability sheet and the debt of the Firm. “Adjusted owned internet debt” is outlined as debt (aside from clinic-level debt) plus clinic-level debt assured by our wholly owned subsidiaries much less unamortized debt reductions and costs much less money (aside from clinic-level money) much less the Firm’s professional rata curiosity in clinic-level money.

The next desk presents the reconciliation from internet (loss) revenue to Adjusted EBITDA and Adjusted EBITDA-NCI for the intervals indicated:

		(Unaudited)
Reconciliation of Web revenue to Adjusted EBITDA		Three Months Ended March 31,								LTM (1) as of March 31, 2020
		2020				2019
Web (loss) revenue		$	(2,328	)		$	(5,145	)		$	28,962
Inventory-based compensation and related payroll taxes		2,793				1,439				6,160
Depreciation, amortization and impairment		8,527				10,066				42,226
Curiosity expense, internet		11,012				8,750				45,849
Revenue tax expense (profit) and different non-income primarily based tax		(3,694		)		792				(21,666		)
Change in truthful worth of revenue tax receivable settlement		(1,699		)		(1,682		)		(238		)
Sure authorized and different issues(2)		2,287				5,291				22,820
Severance, govt retirement and associated prices		515				212				783
Loss (acquire) on sale or closure of clinics		415				(512		)		1,270
Adjusted EBITDA (together with noncontrolling pursuits)		$	17,828			$	19,211			$	126,166
Much less: Web revenue attributable to noncontrolling pursuits		(4,906		)		(5,334		)		(39,507		)
Adjusted EBITDA-NCI		$	12,922			$	13,877			$	86,659

__________________________________
					(1)			Final twelve months (“LTM”) is the interval starting April 1, 2019 by way of March 31, 2020.
					(2)			Sure authorized and different issues embrace authorized charges and different bills related to issues that we imagine don’t mirror our core enterprise operations, together with, however not restricted to, our dealing with of, and response to the next: the United litigation and settlement; the restatement of sure of the Firm’s prior monetary statements and different monetary info (the “Restatement”) and the associated SEC investigation and Audit Committee evaluate; the securities and spinoff litigation associated to the foregoing; our inside evaluate and evaluation of factual and authorized points referring to the aforementioned issues; and authorized charges and different bills referring to issues that we imagine don’t mirror our core enterprise operations.

The next desk presents the reconciliation from Web loss attributable to American Renal Associates Holdings, Inc. to Adjusted internet loss attributable to American Renal Associates Holdings, Inc. for the intervals indicated:

Reconciliation of Web Loss Attributable to American Renal Associates Holdings, Inc. to Adjusted Web Loss Attributable to American Renal Associates Holdings, Inc.:
({dollars} in hundreds, besides per share knowledge)		(Unaudited)
		Three Months Ended
		March 31, 2020				Mar. 31, 2019
Web loss attributable to American Renal Associates Holdings, Inc.		$	(7,234	)		$	(10,479	)
Change within the distinction between the redemption worth and estimated truthful worth for accounting functions of the associated noncontrolling pursuits(1)		(258		)		(741		)
Web loss attributable to widespread shareholders		$	(7,492	)		$	(11,220	)
Changes:
Sure authorized and different issues(2)		$	2,287			$	5,291
Severance, govt retirement and associated prices		515				212
Loss (acquire) on sale or closure of clinics		415				(512		)
Change in valuation allowance for held on the market belongings		505				—
Whole pre-tax changes		$	3,722			$	4,991
Tax impact		968				1,298
Web taxable changes		$	2,754			$	3,693
Change in truthful worth of revenue tax receivable settlement		(1,699		)		(1,682		)
Tax valuation allowance(3)		(3,250		)		—
Change within the distinction between the redemption worth and estimated truthful worth for accounting functions of the associated noncontrolling pursuits(1)		(258		)		(741		)
Whole changes, internet		$	(1,937	)		$	2,752
Adjusted internet loss attributable to American Renal Associates Holdings, Inc.		$	(9,429	)		$	(8,468	)
Fundamental shares excellent		32,459,792				32,187,715
Adjusted weighted common variety of diluted shares used to compute adjusted internet loss attributable to American Renal Associates Holdings, Inc. per share		32,459,792				32,187,715
Adjusted internet loss attributable to American Renal Associates Holdings, Inc. per share		$	(0.29	)		$	(0.26	)

__________________________________
(1)			Adjustments in truthful values of contractual noncontrolling curiosity put provisions are associated to sure put rights that had been accelerated because of the IPO.
(2)			Sure authorized and different issues embrace authorized charges and different bills related to issues that we imagine don’t mirror our core enterprise operations, together with, however not restricted to, our dealing with of, and response to the next: the United litigation and settlement; the Restatement and the associated SEC investigation and Audit Committee evaluate; the securities and spinoff litigation associated to the foregoing; our inside evaluate and evaluation of factual and authorized points referring to the aforementioned issues; and authorized charges and different bills referring to issues that we imagine don’t mirror our core enterprise operations.
(3)			Represents a lower to the Firm’s established valuation allowance for sure tax objects.

American Renal Associates Holdings, Inc. and Subsidiaries Unaudited Supplemental Money Circulate Data ({dollars} in hundreds)
		Three Months Ended March 31,
		2020				2019
Money offered by (utilized in) working actions		$	13,678			$	(9,993	)
Distributions to noncontrolling pursuits		(10,748		)		(4,750		)
Adjusted money offered by (utilized in) working actions much less distributions to NCI		$	2,930			$	(14,743	)
Capital expenditure breakdown:
Growth capital expenditures		$	4,261			$	6,897
Different capital expenditures		1,511				1,603
Whole capital expenditures		$	5,772			$	8,500

American Renal Associates Holdings, Inc. and Subsidiaries Unaudited Supplemental Web Debt Calculation ({dollars} in hundreds)
		As of March 31, 2020
		Whole ARA				ARA “Owned”
Money (aside from clinic-level money)		$	38,646			$	38,646
Clinic-level money		23,733				12,558
Whole money		$	62,379			$	51,204
Debt (aside from clinic-level debt)		$	526,800			$	526,800
Clinic-level debt		102,810				55,423
Unamortized debt reductions and costs		(11,717		)		(11,578		)
Whole debt		$	617,893			$	570,645
Adjusted owned internet debt (whole debt – whole money)						$	519,441