Shows a Net Profit from Property Sale and Continues to Reduce Losses

SPRINGFIELD, Ohio, Nov. 14 /PRNewswire-FirstCall/ -- AdCare Health Systems, Inc. (Amex: ADK), an Ohio based long term care, home care and management company, today reported financial results for the third quarter of 2007.

Revenues for the quarter ended September 30th, 2007 were $5,906,326 as compared to $5,660,337 for the same quarter in 2006, an increase of $245,989, or 4.3%. The increase was due to improved occupancy in our assisted living properties and an increase in visits made by our nurses and caregivers at our home health care division.

The loss before discontinued operations for the quarter ended September 30, 2007 was $212,840 as compared to a loss of $655,599 for the quarter ended September 30, 2006, an improvement of $442,759. The improvement was due to an increased occupancy at our assisted living properties, more visits made by our staff at our home health care division and lower interest expense as a result of the expenses related to the mezzanine financing in 2005 being fully recognized in 2006.

Net income for the quarter ended September 30th, 2007 was $395,785 as compared to a loss of $654,646 for the quarter ended September 30th, 2006, an improvement of $1,050,431. Approximately $618,000 of this improvement resulted from recognizing a gain on the sale of assets in our discontinued operations.

David A. Tenwick, Chairman of AdCare, stated that "AdCare reduced its losses this quarter and looks for continued improvement. For the nine months of 2007, the loss before discontinued operations was $539,360 as compared to a loss of $1,908,864 for the nine months of 2006. The loss this year would have been reduced by an additional $137,000 if not for increased fees for a letter of credit extension relating to changing banks and expenses for a discontinued acquisition. If you add the profit from the sale of assets from discontinued operations, we had a net profit of $48,125 for the nine months. AdCare continues to make progress." Mr. Tenwick further stated "We are refinancing some of our properties to improve cash flow and are actively engaged in seeking out suitable acquisitions to further the growth of AdCare."

AdCare Health Systems, Inc. will host a conference call on Thursday, November 15th, 2007 at 4:15 PM EST. The dial-in number is 1-800-257-2182.

About AdCare Health Systems, Inc.

AdCare Health Systems, Inc. (Amex: ADK) develops, owns and manages assisted living facilities, nursing homes and retirement communities and provides home health care services. Prior to becoming a publicly traded company in November of 2006, AdCare operated as a private company for 18 years. AdCare's 920 employees provide high-quality care for patients and residents residing in the 15 facilities that they manage, seven of which are assisted living facilities, six skilled nursing centers and two independent senior living communities. The Company has ownership interests in seven of those facilities. In the ever expanding marketplace of long term care, AdCare's mission is to provide quality healthcare services to the elderly.

Safe Harbor Statement

Statements contained in this press release that are not historical facts may be forward-looking statements within the meaning of federal law. Such forward-looking statements reflect management's beliefs and assumptions and are based on information currently available to management. The forward- looking statements involve known and unknown risks, results, performance or achievements of the Company to differ materially from those expressed or implied in such statements. Such factors are identified in the public filings made by the Company with the Securities and Exchange Commission and include the Company's ability to secure lines of credit and/or an acquisition credit facility, find suitable acquisition properties at favorable terms, changes in the health care industry because of political and economic influences, changes in regulations governing the industry, changes in reimbursement levels including those under the Medicare and Medicaid programs and changes in the competitive marketplace. There can be no assurance that such factors or other factors will not affect the accuracy of such forward-looking statements.