Same Facility Revenue Increases 13%
Acadia Healthcare Company, Inc. (“Acadia”) (NASDAQ: ACHC) today
announced financial results for the third quarter ended September
30, 2023.
Third Quarter Highlights
- Revenue totaled $750.3 million, an increase of 12.5% over the
third quarter of 2022
- Same facility revenue increased 13.0% compared with the third
quarter of 2022, including an increase in revenue per patient day
of 6.6% and an increase in patient days of 6.0%
- Net loss attributable to Acadia totaled $217.7 million, or
$2.39 per diluted share, including the impact of legal settlements
expense of $394.2 million, less expected tax benefits
- Adjusted income attributable to Acadia was $83.9 million, or
$0.91 per diluted share, excluding $0.04 of income from the
Provider Relief Fund (“PRF”) established under the Coronavirus Aid,
Relief, and Economic Security (“CARES”) Act
- Adjusted EBITDA was $175.9 million, an increase of 13.4% over
the third quarter of 2022, excluding income from the PRF
- Continued progress on the execution of the Company’s growth
strategy through opening two new hospitals with joint venture
partners and two comprehensive treatment centers (“CTCs”)
A reconciliation of all non-GAAP financial measures in this
press release begins on page 9.
Third Quarter Results
Chris Hunter, Chief Executive Officer of Acadia, remarked, “Our
results for the third quarter reflect our continued execution on
our growth strategy as well as strong operational execution across
all four of our business lines. Our dedicated employees and
clinicians are addressing the nation’s critical need for safe,
high-quality treatment for mental health and substance use
issues.
“We produced strong financial results with impressive top line
growth and favorable volume trends compared with the third quarter
of 2022. We are pleased that the overall labor market is
stabilizing with our base wage inflation continuing to decline. We
expect the strategic technology investments we have made will
further enhance our performance, drive efficiencies, and support
strong clinical outcomes. Demand for our services is continuing to
rise, and we are confident that we have a solid foundation and the
right strategy in place to capitalize on this demand and deliver
significant, sustainable value creation.”
Strategic Investments for Long-Term Growth
During the third quarter of 2023, the Company continued to make
progress in meeting its strategic growth objectives with the
following accomplishments across its five defined growth
pathways:
- Facility Expansions – Added a total of 204 beds to
existing facilities through the first nine months of the year, on
track to meet the Company’s goal to add 300 beds by the end of
2023.
- De Novo Facilities – Opened two CTCs offering
medication-assisted treatment for patients dealing with opioid use
disorder, bringing Acadia’s total to four CTCs opened this year.
The Company expects to meet its objective of adding a total of six
CTCs in 2023. Additionally, the Company remains on track to open
two de novo acute inpatient hospitals by the end of the year – the
renovated 101-bed adult hospital and outpatient facility are part
of the Montrose Behavioral Health Hospital in Chicago, Illinois, as
well as an 80-bed inpatient hospital, Coachella Valley Behavioral
Health, in Indio, California.
- Joint Ventures – Opened two new behavioral health
hospitals with joint venture partners, Bronson Healthcare in
Michigan, and Geisinger in Pennsylvania, early in the third
quarter. These facilities have made favorable progress to date as
they continue to ramp up admissions. The Company also broke ground
and commenced construction in early November on the previously
announced behavioral health hospital with joint venture partner ECU
Health, eastern North Carolina’s premier health system. Acadia has
20 joint venture partnerships for 21 hospitals, with 11 hospitals
already in operation and 10 additional hospitals expected to open
over the next few years.
- Acquisitions – Announced a definitive agreement to
acquire Turning Point Centers, a 76-bed specialty provider of
substance use disorder and primary mental health treatment services
that supports the Salt Lake City, Utah, metropolitan market. The
transaction is expected to close by the end of the year.
- Extend Continuum of Care – Expanded treatment options by
adding three outpatient programs during the third quarter, bringing
Acadia’s total to 26 outpatient programs added during the nine
months ended September 30, 2023. These programs include Partial
Hospitalization Programs (PHP), Intensive Outpatient Programs (IOP)
or virtual services.
Cash and Liquidity
Acadia has a strong financial position with sufficient capital
to make strategic investments in its business. As of September 30,
2023, the Company had $99.6 million in cash and cash equivalents
and $520 million available under its $600 million revolving credit
facility with a net leverage ratio of approximately 2.0x.
Litigation Resolution
As described in the Form 8-K the Company filed on October 30,
2023, Acadia entered into settlement agreements with the respective
plaintiffs across the three cases related to the previously
disclosed litigation in New Mexico. Under the terms of these
settlement agreements, which are subject to approval by the New
Mexico State District Court, and which fully resolve each of the
cases and include no admission or finding of liability by Acadia or
Desert Hills, the Company will pay an aggregate amount of $400
million in exchange for the release and discharge of all related
claims. The Company currently intends to pay the funds from a
combination of insurance, cash on hand and existing credit
lines.
Looking Ahead
Hunter concluded, “The World Health Organization recently
recognized the importance of mental health as a universal human
right. This theme is fundamental to Acadia’s mission, and our focus
of ensuring access to industry-leading, high-quality care for all
those in need of our services. As the nation’s largest stand-alone
behavioral health provider, we are committed to applying our
recognized scale and expertise to help set the standards for care
that address the escalating demand for behavioral health and
substance use treatment. We continue to look for opportunities and
innovation that support patients across the continuum of care and
help to expand the scope of those we serve. Our results to date
demonstrate our ability to execute our strategy with favorable
results, and we believe 2024 will be another year of impressive
growth and progress for Acadia. We are proud of the work we are
doing and are committed to providing safe, quality care for the
patients, families and communities we serve and creating long-term
value for our stockholders.”
Financial Guidance
Acadia today adjusted its previously announced financial
guidance for 2023 for the following:
2023
Guidance Range
Revenue
$2.90 to $2.92 billion
Adjusted EBITDA, excluding income from the
PRF
$665 to $675 million
Adjusted earnings per diluted share,
excluding income from the PRF
$3.33 to $3.43
Expansion capital expenditures
$300 to $350 million
The Company affirmed the previously announced financial guidance
for the following:
Interest expense
$82 to $85 million
Tax rate
25% to 26%
Depreciation and amortization expense
$125 to $135 million
Stock compensation expense
$30 to $35 million
Operating cash flows
$450 to $500 million
Maintenance capital expenditures
$40 to $50 million
IT capital expenditures
$35 to $45 million
The Company’s guidance does not include the impact of any future
acquisitions, divestitures, transaction-related expenses, legal
settlements expense or recognition of additional income from the
CARES Act.
Conference Call
Acadia will hold a conference call to discuss its third quarter
financial results at 8:00 a.m. Central Time/9:00 a.m. Eastern Time
on Friday, November 3, 2023. A live webcast of the conference call
will be available at www.acadiahealthcare.com in the “Investors”
section of the website. The webcast of the conference call will be
available for 30 days.
About Acadia
Acadia is a leading provider of behavioral healthcare services
across the United States. As of September 30, 2023, Acadia operated
a network of 253 behavioral healthcare facilities with
approximately 11,100 beds in 39 states and Puerto Rico. With
approximately 23,000 employees serving more than 75,000 patients
daily, Acadia is the largest stand-alone behavioral healthcare
company in the U.S. Acadia provides behavioral healthcare services
to its patients in a variety of settings, including inpatient
psychiatric hospitals, specialty treatment facilities, residential
treatment centers and outpatient clinics.
Forward-Looking Information
This press release contains forward-looking statements.
Generally, words such as “may,” “will,” “should,” “could,”
“anticipate,” “expect,” “intend,” “estimate,” “plan,” “continue,”
and “believe” or the negative of or other variation on these and
other similar expressions identify forward-looking statements.
These forward-looking statements are made only as of the date of
this press release. We do not undertake to update or revise the
forward-looking statements, whether as a result of new information,
future events or otherwise. Forward-looking statements are based on
current expectations and involve risks and uncertainties and our
future results could differ significantly from those expressed or
implied by our forward-looking statements. Factors that may cause
actual results to differ materially include, without limitation,
(i) potential difficulties in successfully integrating the
operations of acquired facilities or realizing the expected
benefits and synergies of our facility expansions, acquisitions,
joint ventures and de novo transactions; (ii) Acadia’s ability to
add beds, expand services, enhance marketing programs and improve
efficiencies at its facilities; (iii) potential reductions in
payments received by Acadia from government and commercial payors;
(iv) the occurrence of patient incidents, governmental
investigations, litigation and adverse regulatory actions, which
could adversely affect the price of our common stock and result in
substantial payments and incremental regulatory burdens; (v) the
risk that Acadia may not generate sufficient cash from operations
to service its debt and meet its working capital and capital
expenditure requirements; (vi) potential disruptions to our
information technology systems or a cybersecurity incident; and
(vii) potential operating difficulties, including, without
limitation, disruption to the U.S. economy and financial markets;
reduced admissions and patient volumes; increased costs relating to
labor, supply chain and other expenditures; changes in competition
and client preferences; and general economic or industry conditions
that may prevent Acadia from realizing the expected benefits of its
business strategies. These factors and others are more fully
described in Acadia’s periodic reports and other filings with the
SEC.
Acadia Healthcare Company, Inc. Condensed Consolidated
Statements of Operations (Unaudited)
Three Months Ended
September 30,
Nine Months Ended
September 30,
2023
2022
2023
2022
(In thousands, except per
share amounts)
Revenue
$
750,334
$
666,732
$
2,185,938
$
1,935,104
Salaries, wages and benefits (including equity-based
compensation expense of $8,163, $7,240, $23,140 and $21,745,
respectively)
394,150
352,582
1,171,960
1,027,732
Professional fees
45,540
40,367
130,468
117,718
Supplies
27,147
25,570
79,312
74,291
Rents and leases
11,731
11,339
34,880
33,780
Other operating expenses
104,048
88,993
290,798
255,355
Income from provider relief fund
(4,442
)
(7,656
)
(4,442
)
(16,206
)
Depreciation and amortization
33,388
29,573
96,969
87,627
Interest expense, net
20,742
18,003
61,651
50,355
Legal settlements expense
394,181
—
394,181
—
Loss on impairment
—
—
8,694
—
Transaction-related expenses
11,247
10,859
26,792
18,381
Total expenses
1,037,732
569,630
2,291,263
1,649,033
(Loss) income before income taxes
(287,398
)
97,102
(105,325
)
286,071
(Benefit from) provision for income taxes
(71,873
)
24,056
(29,907
)
69,183
Net (loss) income
(215,525
)
73,046
(75,418
)
216,888
Net income attributable to noncontrolling interests
(2,185
)
(1,947
)
(3,978
)
(4,873
)
Net (loss) income attributable to Acadia Healthcare Company, Inc.
$
(217,710
)
$
71,099
$
(79,396
)
$
212,015
(Loss) earnings per share attributable to Acadia Healthcare
Company, Inc. stockholders: Basic
$
(2.39
)
$
0.79
$
(0.87
)
$
2.37
Diluted
$
(2.39
)
$
0.78
$
(0.87
)
$
2.31
Weighted-average shares outstanding: Basic
91,168
89,833
90,852
89,607
Diluted
91,168
91,723
90,852
91,668
Acadia Healthcare Company,
Inc.
Condensed Consolidated Balance
Sheets
(Unaudited)
September 30,
December 31,
2023
2022
(In thousands)
ASSETS Current assets: Cash and cash equivalents
$
99,591
$
97,649
Accounts receivable, net
362,666
322,439
Other current assets
241,218
86,037
Total current assets
703,475
506,125
Property and equipment, net
2,145,599
1,952,045
Goodwill
2,225,962
2,222,805
Intangible assets, net
73,811
76,041
Deferred tax assets
2,850
2,950
Operating lease right-of-use assets
122,090
135,238
Other assets
72,431
92,697
Total assets
$
5,346,218
$
4,987,901
LIABILITIES AND EQUITY Current liabilities:
Current portion of long-term debt
$
26,563
$
21,250
Accounts payable
149,874
104,723
Accrued salaries and benefits
122,264
125,298
Current portion of operating lease liabilities
26,242
26,463
Other accrued liabilities
539,947
110,592
Total current liabilities
864,890
388,326
Long-term debt
1,349,954
1,364,541
Deferred tax liabilities
70,450
92,588
Operating lease liabilities
104,873
116,429
Other liabilities
145,907
125,033
Total liabilities
2,536,074
2,086,917
Redeemable noncontrolling interests
97,582
88,257
Equity: Common stock
912
899
Additional paid-in capital
2,637,658
2,658,440
Retained earnings
73,992
153,388
Total equity
2,712,562
2,812,727
Total liabilities and equity
$
5,346,218
$
4,987,901
Acadia Healthcare Company,
Inc.
Condensed Consolidated
Statements of Cash Flows
(Unaudited)
Nine Months Ended September
30,
2023
2022
(In thousands)
Operating activities: Net (loss) income
$
(75,418
)
$
216,888
Adjustments to reconcile net (loss) income to net cash provided
by operating activities: Depreciation and amortization
96,969
87,627
Amortization of debt issuance costs
2,485
2,440
Equity-based compensation expense
23,140
21,745
Deferred income taxes
(21,655
)
20,176
Legal settlements expense
394,181
—
Loss on impairment
8,694
—
Other
1,423
2,422
Change in operating assets and liabilities, net of effect of
acquisitions: Accounts receivable, net
(40,227
)
(35,538
)
Other current assets
(77,165
)
(28,692
)
Other assets
309
3,373
Accounts payable and other accrued liabilities
23,057
7,729
Accrued salaries and benefits
(3,038
)
(8,831
)
Other liabilities
17,723
10,303
Government relief funds
(4,442
)
(32,617
)
Net cash provided by operating activities
346,036
267,025
Investing activities: Cash paid for acquisitions, net
of cash acquired
(349
)
—
Cash paid for capital expenditures
(285,410
)
(208,792
)
Proceeds from sale of property and equipment
633
1,784
Other
(1,925
)
(6,802
)
Net cash used in investing activities
(287,051
)
(213,810
)
Financing activities: Borrowings on revolving credit
facility
40,000
—
Principal payments on revolving credit facility
(35,000
)
(85,000
)
Principal payments on long-term debt
(15,938
)
(13,281
)
Repurchase of shares for payroll tax withholding, net of proceeds
from stock option exercises
(45,193
)
(7,541
)
Contributions from noncontrolling partners in joint ventures
2,538
13,178
Distributions to noncontrolling partners in joint ventures
(3,480
)
(1,004
)
Other
30
39
Net cash used in financing activities
(57,043
)
(93,609
)
Net increase (decrease) in cash and cash equivalents
1,942
(40,394
)
Cash and cash equivalents at beginning of the period
97,649
133,813
Cash and cash equivalents at end of the period
$
99,591
$
93,419
Effect of acquisitions: Assets acquired, excluding
cash
$
6,766
$
—
Liabilities assumed
(128
)
—
Redeemable noncontrolling interest resulting from an acquisition
(6,289
)
—
Cash paid for acquisitions, net of cash acquired
$
349
$
—
Acadia Healthcare Company,
Inc.
Operating Statistics
(Unaudited, Revenue in
thousands)
Three Months Ended
September 30,
Nine Months Ended
September 30,
2023
2022
%
Change
2023
2022
%
Change
Same Facility Results (1) Revenue
$
744,868
$
659,336
13.0
%
$
2,161,096
$
1,920,229
12.5
%
Patient Days
774,996
731,282
6.0
%
2,285,467
2,160,232
5.8
%
Admissions
49,658
47,260
5.1
%
147,734
139,430
6.0
%
Average Length of Stay (2)
15.6
15.5
0.9
%
15.5
15.5
-0.1
%
Revenue per Patient Day
$
961
$
902
6.6
%
$
946
$
889
6.4
%
Adjusted EBITDA margin (3)
29.8
%
29.6
%
20 bps
29.1
%
28.8
%
30 bps Adjusted EBITDA margin excluding income from provider relief
fund
29.2
%
28.4
%
80 bps
28.9
%
28.0
%
90 bps Facility Results Revenue
$
750,334
$
666,732
12.5
%
$
2,185,938
$
1,935,104
13.0
%
Patient Days
779,296
738,702
5.5
%
2,306,109
2,179,805
5.8
%
Admissions
50,302
47,692
5.5
%
150,237
139,930
7.4
%
Average Length of Stay (2)
15.5
15.5
0.0
%
15.3
15.6
-1.5
%
Revenue per Patient Day
$
963
$
903
6.7
%
$
948
$
888
6.8
%
Adjusted EBITDA margin (3)
28.7
%
28.7
%
0 bps
28.0
%
28.3
%
-30 bps Adjusted EBITDA margin excluding income from provider
relief fund
28.1
%
27.5
%
60 bps
27.8
%
27.4
%
40 bps (1) Same facility results for the periods presented include
facilities we have operated for more than one year and exclude
certain closed services. (2) Average length of stay is defined as
patient days divided by admissions. (3) For each of the three and
nine months ended September 30, 2023, includes income from provider
relief fund of $4.4 million. For the three and nine months ended
September 30, 2022, includes income from provider relief fund of
$7.7 million and $16.2 million, respectively.
Acadia Healthcare Company,
Inc.
Reconciliation of Net (Loss)
Income Attributable to Acadia Healthcare Company, Inc. to Adjusted
EBITDA
(Unaudited)
Three Months Ended
September 30,
Nine Months Ended
September 30,
2023
2022
2023
2022
(in thousands)
Net (loss) income attributable to Acadia Healthcare Company,
Inc.
$
(217,710
)
$
71,099
$
(79,396
)
$
212,015
Net income attributable to noncontrolling interests
2,185
1,947
3,978
4,873
(Benefit from) provision for income taxes
(71,873
)
24,056
(29,907
)
69,183
Interest expense, net
20,742
18,003
61,651
50,355
Depreciation and amortization
33,388
29,573
96,969
87,627
EBITDA
(233,268
)
144,678
53,295
424,053
Adjustments: Equity-based compensation expense (a)
8,163
7,240
23,140
21,745
Transaction-related expenses (b)
11,247
10,859
26,792
18,381
Legal settlements expense (c)
394,181
—
394,181
—
Loss on impairment (d)
—
—
8,694
—
Adjusted EBITDA
$
180,323
$
162,777
$
506,102
$
464,179
Adjusted EBITDA margin
24.0
%
24.4
%
23.2
%
24.0
%
Adjusted EBITDA excluding income from provider relief
fund
$
175,881
$
155,121
$
501,660
$
447,973
Adjusted EBITDA margin excluding income from provider relief
fund
23.4
%
23.3
%
22.9
%
23.1
%
See footnotes on page 11.
Acadia Healthcare Company,
Inc.
Reconciliation of Net (Loss)
Income Attributable to Acadia Healthcare Company, Inc. to
Adjusted Income Attributable
to Acadia Healthcare Company, Inc.
(Unaudited)
Three Months Ended
September 30,
Nine Months Ended
September 30,
2023
2022
2023
2022
(in thousands, except per
share amounts)
Net (loss) income attributable to Acadia Healthcare Company,
Inc.
$
(217,710
)
$
71,099
$
(79,396
)
$
212,015
Adjustments to income: Transaction-related expenses (b)
11,247
10,859
26,792
18,381
Legal settlements expense (c)
394,181
—
394,181
—
Loss on impairment (d)
—
—
8,694
—
(Benefit from) provision for income taxes
(71,873
)
24,056
(29,907
)
69,183
Adjusted income before income taxes attributable to Acadia
Healthcare Company, Inc.
115,845
106,014
320,364
299,579
Income tax effect of adjustments to income (e)
28,756
27,148
79,947
76,662
Adjusted income attributable to Acadia Healthcare Company, Inc.
87,089
78,866
240,417
222,917
Income from provider relief fund, net of taxes
(3,237
)
(5,579
)
(3,237
)
(11,809
)
Adjusted income attributable to Acadia Healthcare Company, Inc.
excluding income from provider relief fund
$
83,852
$
73,287
$
237,180
$
211,108
Weighted-average shares outstanding - diluted (f)
91,655
91,723
91,684
91,668
Adjusted income attributable to Acadia Healthcare Company,
Inc. per diluted share
$
0.95
$
0.86
$
2.62
$
2.43
Income from provider relief fund, net of taxes, per diluted share
(0.04
)
(0.06
)
(0.04
)
(0.13
)
Adjusted income attributable to Acadia Healthcare Company, Inc.,
excluding income from provider relief fund, per diluted share
$
0.91
$
0.80
$
2.58
$
2.30
See footnotes on page 11.
Acadia Healthcare Company,
Inc. Footnotes We have included certain financial
measures in this press release, including those listed below, which
are “non-GAAP financial measures” as defined under the rules and
regulations promulgated by the SEC. These non-GAAP financial
measures include, and are defined, as follows: •
EBITDA: net (loss) income attributable
to Acadia Healthcare Company, Inc. adjusted for net income
attributable to noncontrolling interests, (benefit from) provision
for income taxes, net interest expense and depreciation and
amortization. •
Adjusted
EBITDA: EBITDA adjusted for equity-based compensation
expense, loss on impairment, legal settlements expense and
transaction-related expenses. •
Adjusted EBITDA excluding income from provider relief
fund: Adjusted EBITDA adjusted for income from provider
relief fund. •
Adjusted EBITDA
margin: Adjusted EBITDA divided by revenue. •
Adjusted EBITDA margin excluding income from
provider relief fund: Adjusted EBITDA excluding income from
provider relief fund divided by revenue. •
Adjusted income before income taxes attributable to
Acadia Healthcare Company, Inc.: net (loss) income
attributable to Acadia Healthcare Company, Inc. adjusted for
transaction-related expenses, loss on impairment, legal settlements
expense and (benefit from) provision for income taxes. •
Adjusted income attributable to Acadia
Healthcare Company, Inc.: Adjusted income before income
taxes attributable to Acadia Healthcare Company, Inc. adjusted for
the income tax effect of adjustments to income. •
Adjusted income attributable to Acadia
Healthcare Company, Inc. excluding income from provider relief
fund: Adjusted income attributable to Acadia Healthcare
Company, Inc. adjusted for income from provider relief fund.
The non-GAAP financial measures presented herein are supplemental
measures of our performance and are not required by, or presented
in accordance with, generally accepted accounting principles in the
United States (“GAAP”). The non-GAAP financial measures presented
herein are not measures of our financial performance under GAAP and
should not be considered as alternatives to net income or any other
performance measures derived in accordance with GAAP or as an
alternative to cash flow from operating activities as measures of
our liquidity. Our measurements of these non-GAAP financial
measures may not be comparable to similarly titled measures of
other companies. We have included information concerning the
non-GAAP financial measures in this press release because we
believe that such information is used by certain investors as
measures of a company’s historical performance. We believe these
measures are frequently used by securities analysts, investors and
other interested parties in the evaluation of issuers of equity
securities, many of which present similar non-GAAP financial
measures when reporting their results. Because the non-GAAP
financial measures are not measurements determined in accordance
with GAAP and are thus susceptible to varying calculations, the
non-GAAP financial measures, as presented, may not be comparable to
other similarly titled measures of other companies. Our
presentation of these non-GAAP financial measures should not be
construed as an inference that our future results will be
unaffected by unusual or nonrecurring items. The Company is
not able to provide a reconciliation of projected Adjusted EBITDA
and adjusted earnings per diluted share, where provided, to
expected results due to the unknown effect, timing and potential
significance of transaction-related expenses and the tax effect of
such expenses. (a) Represents the equity-based compensation
expense of Acadia. (b) Represents transaction-related
expenses incurred by Acadia primarily related to termination,
restructuring, management transition, acquisition and other similar
costs. (c) Represents legal settlements expense related to
the Desert Hills litigation. (d) During the second quarter
of 2023, we recorded non-cash impairment charges totaling $8.7
million related to the closure of certain facilities. (e)
Represents the income tax effect of adjustments to income based on
tax rates of 24.8% and 25.6% for the three months ended September
30, 2023 and 2022, respectively, and 25.0% and 25.6% for the nine
months ended September 30, 2023 and 2022, respectively. (f)
For the three and nine months ended September 30, 2023,
approximately 0.5 million and 0.8 million, respectively,
outstanding shares of restricted stock and shares of common stock
issuable upon exercise of outstanding stock option awards have been
included in the calculation of weighted-average shares
outstanding-diluted. These shares are excluded from the calculation
of diluted earnings per share in the condensed consolidated
statement of operations because the net loss for the three and nine
months ended September 30, 2023 causes such securities to be
anti-dilutive.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20231102405397/en/
Gretchen Hommrich Vice President, Investor Relations (615)
861-6000
Acadia Healthcare (NASDAQ:ACHC)
Historical Stock Chart
From Apr 2024 to May 2024
Acadia Healthcare (NASDAQ:ACHC)
Historical Stock Chart
From May 2023 to May 2024