8-K

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, DC 20549

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 or 15(d) of the

Securities Exchange Act of 1934

Date of report (Date of earliest event reported)

March 3, 2016 (March 3, 2016)

Diversicare Healthcare Services, Inc.

(Exact Name of Registrant as Specified in Charter)

Delaware	001-12996	62-1559667
(State or Other Jurisdiction of Incorporation)	(Commission File Number)	(IRS Employer Identification No.)

1621 Galleria Boulevard, Brentwood, TN 37027

(Address of Principal Executive Offices) (Zip Code)

(615) 771-7575

(Registrant's telephone number, including area code)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

[ ] Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

[ ] Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

[ ] Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

[ ] Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Item 2.02. Results of Operations and Financial Condition.

On March 3, 2016, the Registrant announced its results of operations for the three-month and twelve-month periods ended December 31, 2015. A copy of the press release is attached as Exhibit 99.1 to this Current Report on Form 8-K and is incorporated herein by reference in its entirety.

The information furnished pursuant to Item 2.02 herein, including Exhibit 99.1, shall not be deemed to be “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, nor shall it be deemed incorporated by reference in any filing under the Securities Act of 1933.

Item 7.01. Regulation FD Disclosure.

The Registrant is furnishing its Investor presentation update for the period ended December 31, 2015, which is also contained on its website, DVCR.com. See Exhibit 99.2 to this Current Report on Form 8-K.

Item 9.01. Financial Statements and Exhibits.

(d) Exhibits

NumberExhibit

99.1        Press release dated March 3, 2016.

99.2        Investor presentation

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

Diversicare Healthcare Services, Inc.

By: /s/ James R. McKnight, Jr.

James R. McKnight, Jr.

Chief Financial Officer

Date:    March 3, 2016

EX-99.1

   Company Contact:       Kelly J. Gill       Chief Executive Officer       615-771-7575          Investor Relations:             James R. McKnight, Jr.             Chief Financial Officer             615-771-7575

Diversicare Announces 2015 Fourth Quarter Results

Reports Revenue Growth of 4.5% and EBITDA of $4.1 million

BRENTWOOD, TN, (March 3, 2016) –Diversicare Healthcare Services, Inc. (NASDAQ: DVCR), a premier provider of long-term care services, today announced its results for the fourth quarter ended December 31, 2015. The Company's revenue grew to $98.0 million, an increase of 4.5% year-over-year.

On February 26, 2016, the Board of Directors declared a quarterly dividend of $0.055 per share per common share payable to shareholders of record as of March 31, 2016, to be paid on April 14, 2016.

Fourth Quarter 2015 Highlights

• Net Revenue increased 4.5% to $98.0 million in the fourth quarter of 2015 from $93.7 million in the fourth quarter of 2014, primarily due to the 11 nursing homes acquired during 2014 and 2015. Same-store centers experienced an increase of $0.9 million.

• General and administrative costs continued to decline as a percentage of net revenue at 6.1% of revenue as compared to 6.5% the same period a year ago.

• Operating income increased to $2.2 million in the fourth quarter of 2015 compared to $1.9 million in the fourth quarter of 2014.

• EPS from continuing operations improved to income of $0.21 in the fourth quarter of 2015 as compared to $0.11 in the fourth quarter of 2014.

• EBITDA was $4.1 million in the fourth quarter of 2015 compared to $3.8 million in the fourth quarter of 2014. On an annual basis, EBITDA was $15.3 million in 2015 compared to $13.1 million in 2014.

• As previously announced, the Company purchased a 60-bed skilled nursing facility in Fulton, Kentucky, for $3.9 million.

CEO Remarks

Commenting on the results, Kelly Gill, Diversicare’s CEO, stated, “I’m pleased that our 2015 results for the year and quarter reflect positive forward momentum with notable landmark developments achieved in the year and which builds upon the strategic plan we put in place several years ago. Our revenue and EBITDA grew solidly over 2014. However most importantly, Diversicare now has established itself among the leaders of top performing organizations under the national CMS 5 Star quality ranking system.

“Earlier this week we shared that we completed a refinancing of the Company’s credit facility.  This comprehensive refinancing positions us well for future growth and demonstrates our preparedness to continue our acquisition activities.” Mr. Gill continued.  “The Diversicare management team is focused on continuing to establish ourselves as leader in our industry.  We have built a highly effective operating platform which provides us with the tools and information required in this ever increasing complexity of the modern operating environment and enables us to scale our support services in an effective manner as we seek to grow the company significantly through acquisitions.  Our results for the year and the fourth quarter demonstrate balanced outcomes overall. Our group of acquired centers are accretive and contributing to our improved financial performance, margins same-store are holding strong if not improving slightly, G&A expenses are well controlled, and our quality outcomes are improving notably. Specifically, revenue for the year revenue grew $43.4 million, or 12.6%, as a result of our 2015 acquisitions and improvement in our same store portfolio.  For the fourth quarter our revenue grew by 4.5% and EBITDA grew by 10% over the year ago quarter. G&A expenses as a percent of revenue for the quarter declined to 6.1%.”

Mr. Gill concluded, “We are pleased to have begun 2016 on such a positive note and look forward to sustaining the momentum we have built over the last couple of years.”

Other Highlights for the Fourth Quarter 2015

The following table summarizes key revenue and census statistics for continuing operations for each period:

	Three Months Ended December 31,
	2015			2014
Skilled nursing occupancy	77.2		%	76.8		%
As a percent of total census:
Medicare census	12.0		%	12.3		%
Managed Care census	3.7		%	3.7		%
As a percent of total revenues:
Medicare revenues	27.9		%	29.2		%
Medicaid revenues	49.3		%	48.1		%
Managed Care revenues	7.7		%	7.0		%
Average rate per day:
Medicare	$	457.24		$	454.94
Medicaid	$	166.72		$	163.49
Managed Care	$	399.00		$	391.77

Patient Revenues

Patient revenues were $98.0 million in the fourth quarter of 2015 and $93.7 million in the fourth quarter of 2014. The increase is primarily attributable to the contribution of newly leased and newly acquired centers. The following table summarizes the revenue increases attributable to our portfolio growth (in thousands):

	Three Months Ended December 31,
	2015		2014		Change
Same-store revenue	$	82,767	$	81,906	$	861
2014 acquisition revenue	11,725		11,843		(118		)
2015 acquisition revenue	3,485		—		3,485
Total revenue	$	97,977	$	93,749	$	4,228

The overall increase in revenue of $4.2 million is primarily attributable the newly acquired nursing centers in Glasgow, Kentucky, Hutchinson, Kansas, and Fulton, Kentucky. These three nursing centers acquired in 2015 contributed $3.5 million revenue during the fourth quarter.

The average Medicaid rate per patient day for same-store nursing centers in 2015 increased 1.75% compared to 2014, resulting in an increase in revenue of $0.7 million. This average rate per day for Medicaid patients is the result of rate increases in certain states and increasing patient acuity levels. The average Medicare rate per patient day for same-store nursing centers in 2015 increased 0.9% compared to 2014, resulting in an increase in revenue of $0.2 million also related to our ability to attract and provide care for patients with increased acuity levels.

Our total average daily census increased by approximately 4.2% compared to 2014 on a consolidated basis, but was primarily attributable to the aforementioned acquisition activity.

Expenses

Operating expense increased in the fourth quarter of 2015 to $78.7 million compared to $75.1 million in the fourth quarter of 2014, driven primarily by the $3.0 million increase in operating costs attributable to the nursing centers acquired in 2015. Operating expense remained relatively flat as a percentage of revenue at 80.4% for the fourth quarter of 2015 as compared to 80.1% in the fourth quarter of 2014, demonstrating our ability to control costs at newly added nursing centers.

	Three Months Ended December 31,
	2015		2014		Change
Same-store operating expenses	$	65,561	$	65,201	$	360
2014 acquisition operating expenses	10,220		9,887		333
2015 acquisition operating expenses	2,956		—		2,956
Total revenue	$	78,737	$	75,088	$	3,649

The largest component of operating expenses is wages. Considering the aforementioned addition of the new centers, we experienced an increase to $46.3 million in the fourth quarter of 2015 as compared to $43.6 million in the fourth quarter of 2014, an increase of $2.7 million, or 6.2%. Wages as a percentage of revenue increased slightly in the fourth quarter of 2015 to 47.2% as compared to 46.5% in the fourth quarter of 2014.

Professional liability expense was $2.0 million in the fourth quarter of 2015 compared to $1.9 million in the fourth quarter of 2014, an increase of $0.1 million. The increase is primarily attributable to insurance premiums paid for commercial insurance policies utilized for new acquisitions. We were engaged in 55 professional liability lawsuits as of December 31, 2015, compared to 51 as of December 31, 2014. Our quarterly cash expenditures for professional liability costs of continuing operations were less than $0.1 million and $1.1 million for 2015 and 2014, respectively. Professional liability expense and cash expenditures fluctuate from year to year based respectively on the results of our third-party professional liability actuarial studies, insurance premiums for commercial policies, and on the costs incurred in defending and settling existing claims.

General and administrative expense was $6.0 million in the fourth quarter of 2015 as compared to $6.1 million in the fourth quarter of 2014. As a percent of revenues, general and administrative expenses declined to 6.1% in 2015 as compared to 6.5% in 2014.

Receivables

Our net receivables balance increased $2.5 million to $43.8 million as of December 31, 2015 from $41.3 million as of December 31, 2014. The increase is primarily attributable to $4.3 million in receivables associated with our newly acquired facilities that are currently undergoing the Medicare and Medicaid change in ownership certification process.

Conference Call Information

A conference call has been scheduled for Friday, March 4, 2016 at 7:30 A.M. Central time (8:30 A.M. Eastern time) to discuss fourth quarter 2015 results.

The conference call information is as follows:

Date:	Friday, March 4, 2016
Time:	7:30 A.M. Central, 8:30 A.M. Eastern
Webcast Links:	www.DVCR.com
Dial in numbers:	877.340.2552 (domestic) or 253.237.1159 (International) - Conference ID: 56249647 The Operator will connect you to Diversicare’s Conference Call

A replay of the conference call will be accessible two hours after its completion through March 11, 2016, by dialing 855-859-2056 (domestic) or 404-537-3406 (international) and entering Conference ID 56249647.

FORWARD-LOOKING STATEMENTS

The “forward-looking statements” contained in this release are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Forward-looking statements are predictive in nature and are frequently identified by the use of terms such as “may,” “will,” “should,” “expect,” “believe,” “estimate,” “intend,” and similar words indicating possible future expectations, events or actions. These forward-looking statements reflect our current views with respect to future events and present our estimates and assumptions only as of the date of this release. Actual results could differ materially from those contemplated by the forward-looking statements made in this release. In addition to any assumptions and other factors referred to specifically in connection with such statements, other factors, many of which are beyond our ability to control or predict, could cause our actual results to differ materially from the results expressed or implied in any forward-looking statements including, but not limited to, our ability to successfully operate the new nursing centers in Alabama, Kansas, Kentucky, Missouri, Ohio, and Indiana, our ability to increase census at our renovated centers, changes in governmental reimbursement, including the impact of the CMS final rule that has resulted in a reduction in Medicare reimbursement as of October 2012 and our ability to mitigate the impact of the revenue reduction, government regulation, the impact of the recently adopted federal health care reform or any future health care reform, any increases in the cost of borrowing under our credit agreements, our ability to comply with covenants contained in those credit agreements, the outcome of professional liability lawsuits and claims, our ability to control ultimate professional liability costs, the accuracy of our estimate of our anticipated professional liability expense, the impact of future licensing surveys, the outcome of proceedings alleging violations of state or Federal False Claims Acts, laws and regulations governing quality of care or other laws and regulations applicable to our business including HIPAA and laws governing reimbursement from government payors, impacts associated with the implementation of our electronic medical records plan, the costs of investing in our business initiatives and development, our ability to control costs, changes to our valuation of deferred tax assets, changes in occupancy rates in our centers, changing economic and competitive conditions, changes in anticipated revenue and cost growth, changes in the anticipated results of operations, the effect of changes in accounting policies as well as others. The Company has provided additional information in its Annual Report on Form 10-K for the fiscal year ended December 31, 2015, as well as in its other filings with the Securities and Exchange Commission, which readers are encouraged to review for further disclosure of other factors. These assumptions may not materialize to the extent assumed, and risks and uncertainties may cause actual results to be different from anticipated results. These risks and uncertainties also may result in changes to the Company’s business plans and prospects. Diversicare Healthcare Services, Inc. is not responsible for updating the information contained in this press release beyond the published date, or for changes made to this document by wire services or Internet services.

Diversicare provides long-term care services to patients in 55 skilled nursing and centers containing 6,556 licensed nursing beds. For additional information about the Company, visit Diversicare's web site: www.DVCR.com.

-Financial Tables to Follow-

DIVERSICARE HEALTHCARE SERVICES, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

(In thousands)

	December 31, 2015		December 31, 2014
ASSETS:
Current Assets
Cash and cash equivalents	$	4,585	$	3,818
Receivables, net	43,819		41,272
Deferred income taxes	7,999		7,016
Current assets of discontinued operations	36		73
Other current assets	3,977		3,760
Total current assets	60,416		55,939
Property and equipment, net	52,273		43,855
Deferred income taxes	11,762		12,885
Acquired leasehold interest, net	7,459		7,844
Other assets, net	6,141		8,566
TOTAL ASSETS	$	138,051	$	129,089
LIABILITIES AND SHAREHOLDERS’ EQUITY:
Current Liabilities
Current portion of long-term debt and capitalized lease obligations	$	6,603	$	5,705
Trade accounts payable	10,136		8,121
Current liabilities of discontinued operations	345		482
Accrued expenses:
Payroll and employee benefits	14,404		14,642
Current portion of self-insurance reserves	10,224		11,833
Other current liabilities	5,652		6,359
Total current liabilities	47,364		47,142
Noncurrent Liabilities
Long-term debt and capitalized lease obligations, less current portion	54,264		42,559
Self-insurance reserves, less current portion	12,344		14,268
Other noncurrent liabilities	10,812		13,366
Total noncurrent liabilities	77,420		70,193
SHAREHOLDERS’ EQUITY	13,267		11,754
TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY	$	138,051	$	129,089

DIVERSICARE HEALTHCARE SERVICES, INC.

CONSOLIDATED STATEMENTS OF OPERATIONS

(In thousands, except per share data)

	Three Months Ended December 31,
	2015			2014
PATIENT REVENUES, net	$	97,977		$	93,749
Operating expense	78,737			75,088
Facility-level operating income	19,240			18,661
EXPENSES:
Lease and rent expense	7,161			7,057
Professional liability	1,972			1,856
General and administrative	6,023			6,056
Depreciation and amortization	1,895			1,826
Total expenses less operating	17,051			16,795
OPERATING INCOME (LOSS)	2,189			1,866
OTHER INCOME (EXPENSE):
Equity in net loss of unconsolidated affiliate	59			84
Interest expense, net	(1,105		)	(940		)
	(1,046		)	(856		)
INCOME (LOSS) FROM CONTINUING OPERATIONS BEFORE INCOME TAXES	1,143			1,010
BENEFIT (PROVISION) FOR INCOME TAXES	128			(319		)
NET INCOME (LOSS) FROM CONTINUING OPERATIONS	1,271			691
NET INCOME (LOSS) FROM DISCONTINUED OPERATIONS:
Operating loss, net of taxes	(328		)	(417		)
Gain on disposal, net of taxes	—			231
DISCONTINUED OPERATIONS	(328		)	(186		)
NET INCOME (LOSS)	943			505
Less: income attributable to noncontrolling interest	—			—
NET INCOME (LOSS) ATTRIBUTABLE TO DIVERSICARE HEALTHCARE SERVICES, INC.	943			505
PREFERRED STOCK DIVIDENDS	—			—
NET INCOME (LOSS) FOR DIVERSICARE HEALTHCARE SERVICES, INC. COMMON SHAREHOLDERS	$	943		$	505
NET INCOME (LOSS) PER COMMON SHARE FOR DIVERSICARE HEALTHCARE SERVICES, INC. SHAREHOLDERS:
Per common share – basic and diluted
Continuing operations	$	0.21		$	0.11
Discontinued operations	(0.05		)	(0.03		)
	$	0.16		$	0.08
Per common share – diluted
Continuing operations	$	0.20		$	0.11
Discontinued operations	$	(0.05	)	$	(0.03	)
	$	0.15		$	0.08
DIVIDENDS DECLARED PER SHARE OF COMMON STOCK	$	0.055		$	0.055
WEIGHTED AVERAGE COMMON SHARES OUTSTANDING:
Basic	6,134			6,032
Diluted	6,322			6,270

DIVERSICARE HEALTHCARE SERVICES, INC.

CONSOLIDATED STATEMENTS OF OPERATIONS

(In thousands, except per share data)

	Twelve Months Ended December 31,
	2015			2014
PATIENT REVENUES, net	$	387,595		$	344,192
Operating expense	311,035			275,605
Facility-level operating income	76,560			68,587
EXPENSES:
Lease and rent expense	28,690			26,151
Professional liability	8,122			7,216
General and administrative	24,793			22,133
Depreciation and amortization	7,524			7,078
Total expenses less operating	69,129			62,578
OPERATING INCOME (LOSS)	7,431			6,009
OTHER INCOME (EXPENSE):
Equity in net losses of unconsolidated affiliate	339			(5		)
Interest expense, net	(4,102		)	(3,697		)
	(3,763		)	(3,702		)
INCOME (LOSS) FROM CONTINUING OPERATIONS BEFORE INCOME TAXES	3,668			2,307
BENEFIT (PROVISION) FOR INCOME TAXES	(916		)	(857		)
NET INCOME (LOSS) FROM CONTINUING OPERATIONS	2,752			1,450
NET INCOME (LOSS) FROM DISCONTINUED OPERATIONS:
Operating income (loss), net of taxes	(1,128		)	(1,486		)
Gain on disposal, net of taxes	—			4,744
DISCONTINUED OPERATIONS	(1,128		)	3,258
NET INCOME (LOSS)	1,624			4,708
Less: loss (income) attributable to noncontrolling interest	—			25
NET INCOME (LOSS) ATTRIBUTABLE TO DIVERSICARE HEALTHCARE SERVICES, INC.	1,624			4,733
PREFERRED STOCK DIVIDENDS	—			(220		)
NET INCOME (LOSS) FOR DIVERSICARE HEALTHCARE SERVICES, INC. COMMON SHAREHOLDERS	$	1,624		$	4,513
NET INCOME (LOSS) PER COMMON SHARE FOR DIVERSICARE HEALTHCARE SERVICES, INC. SHAREHOLDERS:
Per common share – basic
Continuing operations	$	0.45		$	0.21
Discontinued operations	(0.18		)	0.54
	$	0.27		$	0.75
Per common share – diluted
Continuing operations	$	0.44		$	0.20
Discontinued operations	(0.18		)	0.52
	$	0.26		$	0.72
DIVIDENDS DECLARED PER SHARE OF COMMON STOCK	$	0.22		$	0.22
WEIGHTED AVERAGE COMMON SHARES OUTSTANDING:
Basic	6,100			6,011
Diluted	6,315			6,197

DIVERSICARE HEALTHCARE SERVICES, INC.

RECONCILIATION OF NET INCOME (LOSS) TO ADJUSTED EBITDA

(In thousands)

	December 31, 2015			September 30, 2015		June 30, 2015		March 31, 2015			December 31, 2014
	(Unaudited)			(Unaudited)		(Unaudited)		(Unaudited)			(Unaudited)
Net income (loss)	$	943		$	431	$	508	$	(258	)	$	505
Loss (income) from discontinued operations, net of tax	328			238		299		263			186
Income tax provision (benefit)	(128		)	502		539		3			319
Interest expense	1,105			998		1,049		950			940
Depreciation and amortization	1,895			1,887		1,863		1,879			1,826
EBITDA	4,143			4,056		4,258		2,837			3,776
EBITDA adjustments:
Acquisition related costs (a)	90			43		93		142			117
Adjusted EBITDA	$	4,233		$	4,099	$	4,351	$	2,979		$	3,893

(a) Represents non-recurring costs associated with acquisition-related transactions.

DIVERSICARE HEALTHCARE SERVICES, INC.

RECONCILIATION OF NET INCOME (LOSS) FOR DIVERSICARE HEALTHCARE

SERVICES, INC. COMMON SHAREHOLDERS TO ADJUSTED NET INCOME (LOSS)

FOR DIVERSICARE HEALTHCARE SERVICES, INC. COMMON SHAREHOLDERS

(In thousands, except per share data)

	For Three Months Ended
	December 31, 2015			September 30, 2015			June 30, 2015			March 31, 2015			December 31, 2014
Net income (loss) for Diversicare Healthcare Services, Inc. Common shareholders	$	943		$	431		$	508		$	(258	)	$	505
Adjustments:
Acquisition related costs (a)	90			43			93			142			117
Tax impact of above adjustments (b)	(32		)	(15		)	(33		)	(38		)	(41		)
Discontinued operations, net of tax	328			238			299			263			186
Adjusted net income (loss) for Diversicare Healthcare Services, Inc. common shareholders	$	1,329		$	697		$	867		$	109		$	767
Adjusted net income (loss) for Diversicare Healthcare Services, Inc. common shareholders
Basic	$	0.22		$	0.11		$	0.14		$	0.02		$	0.13
Diluted	$	0.21		$	0.11		$	0.14		$	0.02		$	0.12
WEIGHTED AVERAGE COMMON SHARES OUTSTANDING :
Basic	6,134			6,121			6,098			6,045			6,032
Diluted	6,322			6,331			6,327			6,271			6,270

(a)	Represents non-recurring costs associated with acquisition-related transactions.
(b)	Represents tax provision for the cumulative adjustments for each period.

DIVERSICARE HEALTHCARE SERVICES, INC.

FUNDS PROVIDED BY OPERATIONS

(In thousands, except per share data)

	Twelve Months Ended December 31,
	2015			2014
NET INCOME (LOSS)	$	1,624		$	4,708
Discontinued operations	(1,128		)	3,258
Net income (loss) from continuing operations	2,752			1,450
Adjustments to reconcile net income (loss) from continuing operations to funds provided by operations:
Depreciation and amortization	7,524			7,078
Provision for doubtful accounts	7,507			5,710
Deferred income tax provision (benefit)	(1,222		)	837
Provision for self-insured professional liability, net of cash payments	3,200			1,173
Stock based compensation	1,152			580
Debt retirement costs	—			—
Provision for leases, net of cash payments	(1,749		)	(1,180		)
Other	61			316
FUNDS PROVIDED BY OPERATIONS	$	19,225		$	15,964
FUNDS PROVIDED BY OPERATIONS PER COMMON SHARE:
Basic	$	3.15		$	2.66
Diluted	$	3.04		$	2.58
WEIGHTED AVERAGE COMMON SHARES OUTSTANDING :
Basic	6,100			6,011
Diluted	6,315			6,197

We have included certain financial measures in this press release, including EBITDA, Adjusted EBITDA, Adjusted Net income (loss) for Diversicare Healthcare Services, Inc. common shareholders and Funds Provided by Operations which are “non-GAAP financial measures” using accounting principles generally accepted in the United States (GAAP) and using adjustments to GAAP (non-GAAP). These non-GAAP measures are not measurements under GAAP. These measurements should be considered in addition to, but not as a substitute for, the information contained in our financial statements prepared in accordance with GAAP. We define EBITDA as net income (loss) adjusted for loss (income) from discontinued operations, net interest expense, income tax and depreciation and amortization. We define Adjusted EBITDA as EBITDA adjusted for non-recurring restructuring costs and acquisition costs associated with our new facilities and business ventures. We define Adjusted Net income (loss) for Diversicare Healthcare Services, Inc. common shareholders as Net income (loss) for Diversicare Healthcare Services, Inc. common shareholders adjusted for non-recurring restructuring costs and acquisition costs associated with our new facilities and business ventures.Funds Provided by Operations is defined as net income from operating activities adjusted for the cash effect of professional liability and other non-cash charges. Management believes that Funds Provided by Operations is an important performance measurement because it eliminates the effect of actuarial assumptions on our professional liability reserves, includes the cash effect of professional liability payments, and does not include the effects of deferred tax benefit and other non-cash charges.

Our measurements of EBITDA, Adjusted EBITDA, Adjusted Net income (loss) for Diversicare Healthcare Services, Inc. common shareholders and Funds Provided by Operations may not be comparable to similarly titled measures of other companies. We have included information concerning EBITDA, Adjusted EBITDA, Adjusted Net income (loss) for Diversicare Healthcare Services, Inc. common shareholders and Funds Provided by Operations in this press release because we believe that such information is used by certain investors as measures of a company’s historical performance. Management believes that Adjusted EBITDA and Adjusted Net income (loss) for Diversicare Healthcare Services, Inc. common shareholders are important performance measurements because they eliminate certain nonrecurring costs. Our presentation of EBITDA, Adjusted EBITDA, Adjusted Net income (loss) for Diversicare Healthcare Services, Inc. common shareholders and Funds Provided by Operations should not be construed as an inference that our future results will be unaffected by unusual or nonrecurring items.

DIVERSICARE HEALTHCARE SERVICES, INC. SELECTED OPERATING STATISTICS (Unaudited)
Three Months Ended December 31, 2015
			As of December 31, 2015			Occupancy (Note 2)
Region (Note 1)			Licensed Nursing Beds (4)	Available Nursing Beds (4)	Skilled Nursing Weighted Average Daily Census	Licensed Nursing Beds		Available  Nursing  Beds		Medicare  Utilization		2015 Q4  Revenue ($ in millions)		Medicare  Room  and  Board  Revenue  PPD  (Note 3)		Medicaid  Room  and  Board  Revenue  PPD  (Note 3)
Alabama			925	917	805	87.0	%	87.8	%	14.5	%	$	18.2	$	454.58	$	182.53
Kansas			503	498	402	79.9	%	80.7	%	10.9	%	7.4		420.25		154.86
Kentucky			1,257	1,243	1,120	89.1	%	90.1	%	13.7	%	26.0		465.68		183.13
Missouri			339	339	239	70.5	%	70.5	%	9.1	%	4.3		464.24		135.52
Ohio			426	426	311	73.0	%	73.0	%	9.1	%	8.4		489.78		184.98
Tennessee			765	711	547	73.4	%	76.9	%	15.0	%	11.6		420.30		176.56
Texas			1,845	1,722	1,238	67.1	%	71.9	%	9.0	%	22.1		480.68		142.82
Total			6,060	5,856	4,662	77.2	%	79.6	%	12.0	%	$	98.0	$	457.24	$	166.72
	Note 1:	The Alabama region includes nursing centers in Alabama and Florida. The Kentucky region includes one nursing center in Ohio and one in Indiana. The Tennessee region includes two nursing center in Kentucky.
	Note 2:	The number of Licensed Nursing Beds is based on the licensed capacity of the facility. The Company has historically reported its occupancy based on licensed nursing beds, and excludes a limited number of assisted living, independent living, and personal care beds. The number of Available Nursing Beds represents licensed nursing beds less beds removed from service. Available nursing beds is subject to change based upon the needs of the facilities, including configuration of patient rooms, common usage areas and offices, status of beds (private, semi-private, ward, etc.) and renovations. Occupancy is measured on a weighted average basis.
	Note 3:	These Medicare and Medicaid revenue rates include room and board revenues, but do not include any ancillary revenues related to these patients.
	Note 4:	The Licensed and Available Nursing Bed counts above include only licensed and available SNF beds.

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EX-99.2

Nasdaq: DVCR Investor Update As of December 31, 2015

Nasdaq: DVCR Forward-looking statements made in this presentation involve a number of risks and uncertainties, but not limited to, our ability to successfully operate the new nursing centers in Alabama, Kansas, Kentucky, Missouri, Ohio, and Indiana, our ability to increase patients served at our renovated centers, changes in governmental reimbursement, government regulation, the impact of the recently adopted federal health care reform or any future healthcare reform, any increases in the cost of borrowing under our credit agreements, our ability to comply with covenants contained in those credit agreements, the outcome of professional liability lawsuits and claims, our ability to control ultimate professional liability costs, the accuracy of our estimate of our anticipated professional liability expense, the impact of future licensing surveys, the outcome of proceedings alleging violations of state or Federal False Claims Acts, laws and regulations governing quality of care or other laws and regulations applicable to our business including laws governing reimbursement from government payers, impacts associated with the implementation of our electronic medical records plan, the costs of investing in our business initiatives and development, our ability to control costs, changes to our valuation of deferred tax assets, changes in occupancy rates in our centers, changing economic and competitive conditions, changes in anticipated revenue and cost growth, changes in the anticipated results of operations, the effect of changes in accounting policies as well as other risk factors detailed in the Company's Securities and Exchange Commission filings. The Company has provided additional information in its Annual Report on Form 10-K for the fiscal year ended December 31, 2015, as well as in other filings with the Securities and Exchange Commission, which readers are encouraged to review for further disclosure of other factors that could cause actual results to differ materially from those indicated in the forward-looking statements. Forward-Looking Statements 2

Nasdaq: DVCR Leading Skilled Nursing Provider Compelling Demographic Trends Management’s Strategic Vision Yielding Results Improving Patient Quality Measures, Census And Skilled Mix Demonstrated Ability To Grow And Enhance Portfolio Positively Trending Financial Results Investment Highlights 3

Nasdaq: DVCR • Joined Diversicare in 2013 • 20+ years of experience in the LTC industry • Previous senior leadership positions at: ‒ Golden Living • Licensed Physical Therapist Executive Leadership • Joined Diversicare in 2012 • 10+ Years of senior finance positions in the healthcare industry • Previous senior leadership positions at: ‒ NuscriptRX ‒ Take Care Health Systems ‒ I-TRAX, Inc. (CHD Meridian) • Joined Diversicare in 2010 • 25 Years+ of experience in the LTC industry • Previous senior leadership positions at: ‒ Beverly ‒ Living Centers of America ‒ Skilled Healthcare • SNF – Rehab - Hospice Jay McKnight Chief Financial Officer Kelly Gill CEO, President & Director Leslie Campbell Chief Operating Officer 4

Nasdaq: DVCR FY14 Revenue $344M – FY15 Revenue $388M – 13% Growth As of today – 55 SNF’s, 1 ALF – 6,556 Licensed Beds - 9 States Headquartered in Brentwood, TN NE CO OK LA FL (1) IA IL KS (6) OH (6)IN (1) MO (3) AR KY (13) TN (5) PA MS AL (7) SC NC GA VA WV TX (13) Diversicare at a Glance 5

Nasdaq: DVCR • Operating since 1989 • Traded on NASDAQ: DVCR • Publicly traded since 1994 • Added to Russell Microcap Index in 2014 • 52 week range $6.45 – $17.15 • Highest 2014 share price growth in peer group with 109% • Historically paid $0.22 annual dividend 6 Company Profile

Nasdaq: DVCR 7 Long Term Care Industry Overview • Compelling Demographic Trends • High Quality Clinical Outcomes • Relative Low Cost of Care

Nasdaq: DVCR 8 Compelling Industry Demographics Risi n g Deman d St able Su p pl y Sources: AHCA, CMS OSCAR Data and US Census Bureau, US Administration on Aging 15,000 15,500 16,000 16,500 17,000 2000 2002 2004 2006 2008 2010 2012 2014 Number of Skilled Nursing Facilities 0 20 40 60 80 100 1990 2000 2010 2020E 2030E 2040E 2050E Age 65+ Population (in millions)

Nasdaq: DVCR 9 • Long term care spending continues to increase ‒ Medicare and Medicaid expenditures for SNFs expected to grow 85% from 2013 to 2023 ‒ Annual spending on older adults is expected to increase 250% by 2040 Sources: Medpac and US HHS Department Compelling Industry Demographics 20.0 30.0 40.0 50.0 60.0 70.0 80.0 90.0 2010 2011 2012 2013 2014E 2015E 2016E 2017E 2018E 2019E 2020E 2021E 2022E 2023E Medicare and Medicaid SNF Spending (in billions) Medicare Medicaid

Nasdaq: DVCR 10 Relative Cost Per Case of Treatment Across Post-Acute Care Providers Sources: Medpac and US HHS Department $0 $20 $40 $60 $80 $100 $120 Stroke Hip Fracture Joint Replacement Respiratory w/ Vent Tracheotomy w/ Vent $9 $11 $6 $8 $10 $34 $18 $17 $26 $26 $31 $45 $67 $75 $115 SNF IRF LTAC SNFs are recognized as high quality, low cost provider of institutional post-acute care

Nasdaq: DVCR 11 Company Overview • Mature Company • Provides a full spectrum of post-acute healthcare services • Robust operating platform capable of significant growth expansion

Nasdaq: DVCR Investments made in internal improvements and scalability position Diversicare for external growth Launched Q3 2010 Today Expanded Focus Now On Portfolio Growth Retooling: Areas of Focus Platform Development Operational Improvement Facility Renovations Key Strategic Accomplishments 12

Nasdaq: DVCR Implement an Electronic Medical Record (EMR) Solution Centralization of Key Processes People – Processes – Resources Completed – Company repositioned for rapid growth Platform Development and Operational Improvements 13

Nasdaq: DVCR 14 Key Results and Outcomes • Improved Quality Measures • Improved patient mix and reimbursement rates • Improved operating and G&A leverage • Demonstrated growth through acquisitions

Nasdaq: DVCR Annual Results: 5 Star Quality Measures Relative to For-Profit Peer Group 15 3.1 3.2 3.3 3.4 3.5 3.6 3.7 3.8 3.9 4 Overall QM Rating 3.98 DVCR Industry For-Profit Not-For-Profit Diversicare is the industry leader in Quality Measures outcomes.

Nasdaq: DVCR Quarterly Results: 5 Star Quality Measures Relative to For-Profit Peer Group 16 3 3.1 3.2 3.3 3.4 3.5 3.6 3.7 3.8 3.9 4 4.1 4.2 4.3 4.4 Overall QM Rating 4.31 DVCR Industry For-Profit Not-For-Profit Diversicare is the industry leader in Quality Measures outcomes.

Nasdaq: DVCR Skilled Care and Marketing Initiatives: • 24 Hour RN coverage with specialized clinical capability • Clinical programs drive higher acuity and favorable reimbursement trends • Facility based sales representatives deploy centrally managed business development activities • Clinical programs can be customized for physician needs Results: Improved Patient Mix 17 0 20 40 60 80 100 120 140 160 180 200 Q1 13 Q2 13 Q3 13 Q4 13 Q1 14 Q2 14 Q3 14 Q4 14 Q1 15 Q2 15 Q3 15 Q4 15 110 89 100 114 150 138 152 162 182 167 171 172 Managed Care Avg Daily Census 200 300 400 500 600 700 Q1 13 Q2 13 Q3 13 Q4 13 Q1 14 Q2 14 Q3 14 Q4 14 Q1 15 Q2 15 Q3 15 Q4 15 383 382 374 441 500 563 544 552 623 574 553 557 Medicare Avg Daily Census

Nasdaq: DVCR A – Resulting from a 2% decrease in rates as a result of sequestration beginning April 1, 2013. Results: Rate Increases Driven By Higher Acuity • Medicare rate growth driven by acuity • 17.8% Increase from FY10 Q3 to FY15 Q4 • 4.2% CAGR 18 A $380 $430 $480 Q3 '10 Q4 '10 Q1 '11 Q2 '11 Q3 '11 Q4 '11 Q1 '12 Q2 '12 Q3 '12 Q4 '12 Q1 '13 Q2 '13 Q3 '13 Q4 '13 Q1 '14 Q2 '14 Q3 '14 Q4 '14 Q1 '15 Q2 '15 Q3 '15 Q4 '15 $388 $457 Medicare Rate Per Day Medicare Rate Per Day RUGS IV Final Rule Impact

Nasdaq: DVCR • Medicaid rates driven by acuity • 12.5% Increase from FY10 Q3 to FY15 Q4 • 3.0% CAGR Results: Rate Increases Driven By Higher Acuity 19 $140 $145 $150 $155 $160 $165 Q3 '10 Q4 '10 Q1 '11 Q2 '11 Q3 '11 Q4 '11 Q1 '12 Q2 '12 Q3 '12 Q4 '12 Q1 '13 Q2 '13 Q3 '13 Q4 '13 Q1 '14 Q2 '14 Q3 '14 Q4 '14 Q1 '15 Q2 '15 Q3 '15 Q4 '15 $148 $167 Medicaid Rate Per Day Medicaid Rate Per Day

Nasdaq: DVCR Results: Growth in Operated Facilities • Our ability to integrate facilities onto our platform is proven by our continuous growth and early accretion of new facilities. 20 25 30 35 40 45 50 55 60 2012 Q1 2012 Q2 2012 Q3 2012 Q4 2013 Q1 2013 Q2 2013 Q3 2013 Q4 2014 Q1 2014 Q2 2014 Q3 2014 Q4 2015 Q1 2015 Q2 2015 Q3 2015 Q4 32 55

Nasdaq: DVCR Acquisitions are Accretive to earnings within a quarter of acquisitions date – the exceptions being development opportunities like new construction, major renovations, etc. Demonstrated Platform Scalability by increasing revenues with a resulting reduction in G&A expense as percentage of revenue New Facility Integration, including EMR, implemented during the first quarter of operations at new facilities Results: Impact Of New Centers 21

Nasdaq: DVCR Results: Revenue Impact of Acquisitions 22 $0 $10 $20 $30 $40 $50 $60 $70 $80 $90 $100 Q1 '13 Q2 '13 Q3 '13 Q4 ’13 Q1 ’14 Q2 '14 Q3 '14 Q4 '14 Q1 '15 Q2 '15 Q3 '15 Q4 '15 Quarterly Revenue 2015 Acquisitions (3) 2014 Acquisitions (8) 2013 Acquisitions (10) Same-store group* * For the purposes of this chart, the “same-store group” represents all centers operated by the Company prior to January 1, 2013.

Nasdaq: DVCR *Same-Store group represents all nursing centers acquired by the Company prior to January 1, 2014. Results: New Centers and Same-Store 23

Nasdaq: DVCR Results: Revenue Growth and Operating Leverage • Continued Company-wide cost reduction efforts in place o Diligent vendor management and product selection criteria o Centralized purchasing functions drive consistency through all facilities 24 0.0% 5.0% 10.0% 15.0% 20.0% 25.0% $30.0 $40.0 $50.0 $60.0 $70.0 $80.0 $90.0 $100.0 $110.0 Q1 '13 Q2 '13 Q3 '13 Q4 '13 Q1 '14 Q2 '14 Q3 '14 Q4 '14 Q1 '15 Q2 '15 Q3 '15 Q4 '15 Revenue and Facility-Level Operating Profit Revenue Operating Profit (%)

Nasdaq: DVCR • Continued G&A reduction efforts in place o Right-sized overhead structure for new portfolio o Centralized core functions to leverage skilled teams • Savings from G&A reductions funded strategic investments • G&A increased in first half 2013 due to acquisition activity Results: Improving G&A Leverage 25 8.5% 6.1% 5.0% 6.0% 7.0% 8.0% 9.0% 10.0% Q1 '13 Q2 '13 Q3 '13 Q4 '13 Q1 '14 Q2 '14 Q3 '14 Q4 '14 Q1 '15 Q2 '15 Q3 '15 Q4 '15 G&A Expense as a % of Revenue

Nasdaq: DVCR 26 Current Areas of Focus • Continuous quality improvement • Enhancing existing portfolio • Growth through accretive acquisitions

Nasdaq: DVCR Continuous improvement of Quality Measures Continue to drive volume of patients served Improve skilled mix / provide high-acuity services Ongoing renovations of existing facilities Continue to Enhance Existing Portfolio 27

Nasdaq: DVCR Stated goal to double the Company within 5 years Target: 5-10 new facilities per year Active pipeline and buyer friendly market Expanded operating infrastructure = Scalability Structure flexibility = Several sources of financial capacity Portfolio Growth 28

Nasdaq: DVCR Today2010 Portfolio has grown by more than 60% after divestitures • Exited Arkansas and West Virginia • Entered Missouri, Kansas, and Indiana • Added Facilities in Ohio, Alabama, and Kentucky Deepen and Expand Existing Footprint 29 OH (6) FL (1) IN (1) AL (7) KS (6) MO (3) TX (13) AR (12) TX (13) OH (1) AL (6) FL (1) WV (2)

Nasdaq: DVCR • Full Ownership Of Assets • Participate In Value Appreciation • Enhance Facility Ownership Fee-Simple Acquisitions • Minimal Capital Required • Leverage Turnaround Capabilities • Leverage Strong REIT Relationships Assumption of Long-Term Operating Leases 2010 Today 20% 31% 80% 69% Flexible Structure Broadens Pipeline 30 Acquisition Types Note: Accounts for exercise of purchase options occurring in February 2016.

Nasdaq: DVCR 31 Summary • Improved operational and financial results • Attractive investment dynamics • Repositioned for the future

Nasdaq: DVCR Key Financial and Operating Statistics Q4 2014 Q1 2015 Q2 2015 Q3 2015 Q4 2015 Average Daily Census 4,473 4,580 4,610 4,651 4,662 Total Average Daily Census – Medicare & Managed Care 714 805 741 724 729 Skilled Mix % 16.0% 17.6% 16.1% 15.6% 15.6% Occupancy (Available Beds) 79.6% 80.7% 80.3% 81.1% 79.6% Medicare Rate Per Day $454.94 $453.84 $457.46 $452.48 $457.24 Medicaid Rate Per Day $163.49 $164.39 $165.30 168.12 166.72 Revenue (Millions) $93.7 $95.2 $96.3 $98.1 $98.0 Facility Level Operating Profit $18.7 $18.1 $19.6 $19.6 $19.2 G&A % of Revenue 6.5% 6.4% 6.5% 6.5% 6.1% Adjusted EBITDAR $11.0 $10.1 $11.5 $11.3 $11.3 Adjusted EBITDA $3.9 $3.0 $4.4 $4.1 $4.2 32

Nasdaq: DVCR Leading Skilled Nursing Provider Compelling Demographic Trends Management’s Strategic Vision Yielding Results Improving Patient Quality Measures, Census And Skilled Mix Demonstrated Ability To Grow And Enhance Portfolio Positively Trending Financial Results Investment Highlights 33

Nasdaq: DVCR Appendix A: Reconciliation of Net Income to Adjusted EBITDA and Adjusted EBITDAR (a) Represents non-recurring costs associated with acquisition-related transactions. 34