AAC Holdings, Inc. (NYSE:AAC) Q3 2019 Earnings Conference Call - Final Transcript
Nov 07, 2019 • 09:00 am ET
initiatives implemented in late 2018 and into 2019 are continuing to have positive impact.
Operating expenses have decreased by $23 million or 28% for the third quarter of 2019 compared to the third quarter of 2018, representing over $100 million in annualized savings. The expense saving initiatives included the consolidations of our Las Vegas, Southern California and Southern Florida markets, the sale of our Townsend operations in Louisiana, consolidation of our lab operations and corresponding reductions in our corporate expenses.
While these cost-saving initiatives began in late 2018, they are continuing throughout the remainder of 2019 as we continue to optimize our existing infrastructure to deliver high-quality care in an efficient manner. There are several additional vendor cost savings initiatives that we have been working on that will result in further expense reductions in our corporate expenses beginning in 2020.
As previously announced, we have added three independent Board members who bring extensive expertise to the company. I'm very excited to add their expertise to the Board. The new members include Michael Logan, Bob Nash and Scott Vogel. The new members joined myself, Jerry Bostelman and Lucius Burch on the Board of Directors.
I would also like to make a few comments about our listing on the New York Stock Exchange. As we have shared in our recent SEC filings, we are transitioning from the New York Stock Exchange to a new exchange. We are finalizing our plans to be listed on a new exchange, the stock is currently traded on the OTC under the ticker symbol AACH. We remain a publicly traded company and still follow all the same SEC reporting requirements that we have historically followed.
Turning to the balance sheet. We are pleased to have recently reached a mutual agreement with our senior secured lenders that provided the company with $5 million of additional liquidity and gives the company through March 31, 2020, to improve the balance sheet and reduce our cost of capital. We remain committed to our strategic initiatives to improve the balance sheet and enhance value to all stakeholders.
As we have discussed on previous calls, we launched a process to evaluate our strategic alternatives related to our balance sheet, and we are currently engaged in discussions with multiple third parties, and I look forward to sharing more with you on future calls.
I will, now, turn the call over to Andrew to discuss our financial results.
Thank you, Michael.
For the third quarter of 2019, total revenue decreased by approximately $4 million or 7% to $59 million from $63 million in the second quarter of this year. Revenue during the third quarter of 2019 was negatively impacted by additional reserves recorded against the outstanding accounts receivable related to closed facilities and other changes in estimates, which totaled approximately $2 million. The remaining $2 million decrease in revenue is primarily related to a decline in our non-client-related revenue, which includes criminal justice programs in the New England area and declines in inpatient average daily