Same Facility Revenue Increases 10.2%

FRANKLIN, Tenn.–(BUSINESS WIRE)–There was an inadvertent error on the supplementary table titled “Reconciliation of Net Income Attributable to Acadia Healthcare Company, Inc. to Adjusted Income Attributable to Acadia Healthcare Company, Inc.” on page 11 of the previous release, within the line item titled “Income tax effect of adjustments to income” and the resulting calculations of Adjusted income and Adjusted income per diluted share in the table. The table has been corrected and there were no other changes to the release.

The updated release reads:

ACADIA HEALTHCARE REPORTS THIRD QUARTER 2022 RESULTS

Same Facility Revenue Increases 10.2%

Acadia Healthcare Company, Inc. (NASDAQ: ACHC) today announced financial results for the third quarter ended September 30, 2022.

Third Quarter Highlights

  • Revenue totaled $666.7 million, an increase of 13.5% over the third quarter of 2021
  • Same facility revenue increased 10.2% compared to the third quarter of 2021, including an increase in revenue per patient day of 6.9% and an increase in patient days of 3.1%
  • Net income attributable to Acadia totaled $71.1 million, or $0.78 per diluted share, and adjusted income from continuing operations attributable to Acadia stockholders totaled $73.3 million, or $0.86 per diluted share, which included $0.06 of income from the Provider Relief Fund (“PRF”) established under the Coronavirus Aid, Relief, and Economic Security (“CARES”) Act
  • Adjusted EBITDA totaled $162.8 million, which included $7.7 million of income from the PRF established under the CARES Act
  • Opened a de novo children’s hospital in Chicago, a joint venture facility in Knoxville, and two new Comprehensive Treatment Centers (“CTCs”)

Third Quarter Results

The Company reported revenue of $666.7 million for the third quarter of 2022, compared with $587.6 million for the third quarter of 2021. Adjusted EBITDA was $162.8 million for the third quarter of 2022, compared with $141.9 million for the same period last year. Excluding income from the PRF, Adjusted EBITDA was $155.1 million for the third quarter of 2022.

The Company recorded income from the PRF of $7.7 million in the third quarter of 2022. The Company will continue to review the remaining $14.2 million of American Rescue Plan (“ARP”) Rural Payments held on its balance sheet as of September 30, 2022, for the potential recognition of additional income. Financial guidance for 2022 does not include the recognition of additional income in the fourth quarter of 2022 beyond the $16.2 million recorded in the nine months ended September 30, 2022.

Net income attributable to Acadia stockholders for the third quarter of 2022 was $71.1 million, or $0.78 per diluted share. Adjusted income from continuing operations attributable to Acadia stockholders was $0.86 per diluted share for the third quarter of 2022. Excluding income from the PRF, adjusted income from continuing operations was $0.80 per diluted share for the third quarter of 2022. Adjustments to income include transaction-related expenses and the income tax effect of adjustments to income. A reconciliation of all non-GAAP financial results in this press release begins on page 10.

For the third quarter of 2022, Acadia’s same facility revenue increased 10.2% compared with the third quarter of 2021, including an increase in revenue per patient day of 6.9% and an increase in patient days of 3.1%.

Chris Hunter, Chief Executive Officer of Acadia Healthcare Company, remarked, “We continued to see robust demand for our behavioral healthcare services during the third quarter. We executed our strategy with favorable results across our key performance metrics including continued navigation through a tight labor market. We are fortunate to have an experienced and dedicated team of employees and clinicians across our operations who have worked tirelessly to meet the needs of those seeking treatment for mental health and substance use issues.

Strategic Investments for Long-Term Growth

“We have progressed on our key growth initiatives across all our service lines this year. We continue to make critical investments in our business to support sustained long-term growth through four distinct pathways. Facility expansions are our first and most efficient growth pathway as we can expand services in established markets with our existing infrastructure and experienced staff. We added 132 beds to our existing facilities during the third quarter, bringing our total number of bed additions to 210 for the first nine months of the year. We are on track to meet our goal of adding approximately 300 beds in 2022.

“For our second growth pathway, we continue to develop wholly owned de novo facilities that meet the critical demand for behavioral healthcare services in underserved markets. There are significant opportunities across the country to address this unmet need at the local community level. We opened a 60-bed children’s hospital in early July, as the first stage of our Montrose Behavioral Health Hospital operations in Chicago. In addition to the children’s hospital, we expect to begin operations at our 101-bed adult hospital and the outpatient facility in 2023 following the renovations of these facilities.

“We continue to identify opportunities to expand our network of CTCs to address the critical need for addiction treatment, specifically for patients dealing with opioid use disorder. During the third quarter, we opened new CTCs in Indiana and Florida. This brings our total to four CTCs opened this year, supporting our objective to open at least six new CTCs in 2022. As the opioid crisis has continued to escalate across the country, our CTC facilities and programs are playing a vital role in addressing this national epidemic.

“A third important pathway for growth for Acadia is forming strategic partnerships with leading health systems across the country. We are proud to work with a growing number of premier health systems to expand behavioral healthcare treatment options in their respective communities. By working together, we can leverage our behavioral health expertise and implement best practices to deliver high quality care and positive clinical outcomes for more patients. During the third quarter, we opened a new facility with our joint venture partner, Covenant Health, in Knoxville, Tennessee. We also broke ground on a new state-of-the-art behavioral health treatment and teaching hospital with our joint venture partner, Henry Ford Health, in the Detroit, Michigan metropolitan area. We expect to commence operations at Maple Heights Behavioral Health, our joint venture with Lutheran Health Network of Indiana during the fourth quarter. An important aspect of many of our joint venture partnerships is the academic focus and training of future clinicians. During the quarter, our Belmont Behavioral Health Hospital in Philadelphia entered into a formal affiliation agreement with Thomas Jefferson University’s Sidney Kimmel Medical College and Jefferson Health in Philadelphia, Pennsylvania, to further teaching and clinical care opportunities for students in behavioral healthcare.

“For our fourth pathway, we focus on identifying strategic acquisition opportunities that allow us to leverage our scale and expertise, make necessary investments for expansion and add service offerings to further enhance the continuum of care. We are fortunate to have a strong balance sheet that supports our ability to pursue acquisitions along with opportunities through our other important growth pathways,” added Hunter.

Cash and Liquidity

Maintaining a strong financial position is a top priority for Acadia, providing the flexibility to pursue its growth initiatives and make strategic investments in its business. As of September 30, 2022, the Company had $93.4 million in cash and cash equivalents. The Company had $515 million available under its $600 million revolving credit facility and its net leverage ratio was approximately 2.1x as of September 30, 2022.

During the third quarter, the Company substantially completed its repayment of amounts received pursuant to the Medicare Accelerated and Advanced Payment Program under the CARES Act. Of the $45.2 million of advanced payments received in 2020, the Company repaid a total of $25.1 million in 2021 and made additional payments of $18.9 million through the first nine months of 2022. The Company will pay off the remaining balance of $1.2 million in the fourth quarter of 2022. In the third quarter of 2022, the Company repaid the remaining half of the approximately $39.3 million of 2020 payroll tax deferrals, which eliminated this liability.

Financial Guidance

Acadia today narrowed its previously announced financial guidance for 2022, as follows:

 

2022 Guidance Range

Revenue

$2.58 to $2.60 billion

Adjusted EBITDA, including income from the PRF

$611 to $621 million

Adjusted EBITDA, excluding income from the PRF

$595 to $605 million

Adjusted earnings per diluted share, including

income from the PRF

$3.13 to $3.23

Adjusted earnings per diluted share, excluding

income from the PRF

$3.00 to $3.10

Interest expense

Approximately $70 million

Tax rate

25% to 26%

Depreciation and amortization expense

Approximately $120 million

Stock compensation expense

Approximately $30 million

Operating cash flows

$360 to $400 million

Expansion capital expenditures

$210 to $230 million

Maintenance capital expenditures

Approximately $60 million

The Company’s guidance does not include the impact of any future acquisitions, divestitures or transaction-related expenses.

Looking Ahead

Hunter added, “We look forward to hosting Acadia’s first Investor Day on Wednesday, December 7, 2022, in New York City. Our management team will provide an in-depth look at our diverse service lines and our strategic initiatives to advance our leadership position in the behavioral healthcare industry.

“We are excited about the opportunities ahead for Acadia, as we remain focused on our primary objective to extend our market reach through our four defined growth pathways. Demand for our services continues to grow, and we believe we are well positioned to maintain our strong growth trajectory and meet our development targets for the year. Without question, the critical need for behavioral health treatment has become a primary focus for health officials, medical professionals, and lawmakers across the country, with depression and anxiety issues further amplified by the strains of the COVID-19 pandemic. Recent data from the Centers for Disease Control and Prevention showed the U.S. suicide rate rose four percent in 2021 after two consecutive years of declines, highlighting the critical need for early assessment and intervention. As a leading provider of behavioral healthcare services, we play a vital role in addressing this need, and we believe we have the right strategy in place to make a positive difference. We are proud of the important work we are doing as we continue to pursue a strategic direction that delivers greater value for our patients, the communities we serve, and our stockholders.”

Conference Call

Acadia will hold a conference call to discuss its third quarter financial results at 9:00 a.m. Eastern Time on November 1, 2022. 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, 2022, Acadia operated a network of 242 behavioral healthcare facilities with approximately 10,800 beds in 39 states and Puerto Rico. With more than 22,500 employees serving approximately 70,000 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) the impact of the COVID-19 pandemic, including, without limitation, disruption to the U.S. economy and financial markets; reduced admissions and patient volumes; and increased costs relating to labor, supply chain and other expenditures; (ii) the impact of vaccine and other pandemic-related mandates imposed by local, state and federal authorities; (iii) 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; (iv) Acadia’s ability to add beds, expand services, enhance marketing programs and improve efficiencies at its facilities; (v) potential reductions in payments received by Acadia from government and third-party payors; (vi) 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; (vii) the risk that Acadia may not generate sufficient cash from operations to service its debt and meet its working capital and capital expenditure requirements; (viii) potential disruptions to our information technology systems or a cybersecurity incident; and (ix) potential operating difficulties, labor costs, client preferences, changes in competition 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,

 

2022

 

 

 

2021

 

 

 

2022

 

 

 

2021

 

(In thousands, except per share amounts)
 
Revenue

$

666,732

 

$

587,559

 

$

1,935,104

 

$

1,720,914

 

 

Salaries, wages and benefits (including equity-based compensation expense of $7,240, $8,923, $21,745 and $24,988, respectively)

 

352,582

 

 

309,118

 

 

1,027,732

 

 

922,684

 

Professional fees

 

40,367

 

 

35,602

 

 

117,718

 

 

101,915

 

Supplies

 

25,570

 

 

23,743

 

 

74,291

 

 

67,698

 

Rents and leases

 

11,339

 

 

9,658

 

 

33,780

 

 

28,690

 

Other operating expenses

 

88,993

 

 

76,502

 

 

255,355

 

 

222,263

 

Income from provider relief fund

 

(7,656

)

 

 

 

(16,206

)

 

 

Depreciation and amortization

 

29,573

 

 

27,805

 

 

87,627

 

 

78,349

 

Interest expense, net

 

18,003

 

 

15,706

 

 

50,355

 

 

61,420

 

Debt extinguishment costs

 

 

 

 

 

 

 

24,650

 

Loss on impairment

 

 

 

1,079

 

 

 

 

24,293

 

Transaction-related expenses

 

10,859

 

 

3,035

 

 

18,381

 

 

9,320

 

Total expenses

 

569,630

 

 

502,248

 

 

1,649,033

 

 

1,541,282

 

Income from continuing operations before income taxes

 

97,102

 

 

85,311

 

 

286,071

 

 

179,632

 

Provision for income taxes

 

24,056

 

 

17,411

 

 

69,183

 

 

42,948

 

Income from continuing operations

 

73,046

 

 

67,900

 

 

216,888

 

 

136,684

 

Loss from discontinued operations, net of taxes

 

 

 

 

 

 

 

(12,641

)

Net income

 

73,046

 

 

67,900

 

 

216,888

 

 

124,043

 

Net income attributable to noncontrolling interests

 

(1,947

)

 

(1,774

)

 

(4,873

)

 

(3,686

)

Net income attributable to Acadia Healthcare Company, Inc.

$

71,099

 

$

66,126

 

$

212,015

 

$

120,357

 

 
Basic earnings per share attributable to Acadia Healthcare Company, Inc. stockholders:
Income from continuing operations attributable to Acadia Healthcare Company, Inc.

$

0.79

 

$

0.74

 

$

2.37

 

$

1.50

 

Loss from discontinued operations

 

 

 

 

 

 

$

(0.14

)

Net income attributable to Acadia Healthcare Company, Inc.

$

0.79

 

$

0.74

 

$

2.37

 

$

1.36

 

 
Diluted earnings per share attributable to Acadia Healthcare Company, Inc. stockholders:
Income from continuing operations attributable to Acadia Healthcare Company, Inc.

$

0.78

 

$

0.73

 

$

2.31

 

$

1.47

 

Loss from discontinued operations

 

 

 

 

 

 

$

(0.14

)

Net income attributable to Acadia Healthcare Company, Inc.

$

0.78

 

$

0.73

 

$

2.31

 

$

1.33

 

 
Weighted-average shares outstanding:
Basic

 

89,833

 

 

88,962

 

 

89,607

 

 

88,684

 

Diluted

 

91,723

 

 

90,889

 

 

91,668

 

 

90,604

 

Acadia Healthcare Company, Inc.
Condensed Consolidated Balance Sheets
(Unaudited)
 

September 30,

 

December 31,

2022

 

2021

(In thousands)

 
ASSETS
Current assets:
Cash and cash equivalents

$

93,419

$

133,813

 

Accounts receivable, net

 

315,999

 

281,332

 

Other current assets

 

112,238

 

79,886

 

Total current assets

 

521,656

 

495,031

 

Property and equipment, net

 

1,908,993

 

1,771,159

 

Goodwill

 

2,207,912

 

2,199,937

 

Intangible assets, net

 

75,920

 

70,145

 

Deferred tax assets

 

2,983

 

3,080

 

Operating lease right-of-use assets

 

135,627

 

133,761

 

Other assets

 

90,014

 

94,965

 

Total assets

$

4,943,105

$

4,768,078

 

 
 
LIABILITIES AND EQUITY
Current liabilities:
Current portion of long-term debt

$

21,250

$

18,594

 

Accounts payable

 

116,045

 

98,575

 

Accrued salaries and benefits

 

109,654

 

137,845

 

Current portion of operating lease liabilities

 

25,770

 

23,348

 

Other accrued liabilities

 

128,294

 

126,499

 

Total current liabilities

 

401,013

 

404,861

 

Long-term debt

 

1,379,306

 

1,478,626

 

Deferred tax liabilities

 

94,446

 

74,368

 

Operating lease liabilities

 

117,473

 

116,841

 

Other liabilities

 

118,923

 

110,505

 

Total liabilities

 

2,111,161

 

2,185,201

 

Redeemable noncontrolling interests

 

88,236

 

65,388

 

Equity:
Common stock

 

899

 

890

 

Additional paid-in capital

 

2,650,545

 

2,636,350

 

Retained earnings (accumulated deficit)

 

92,264

 

(119,751

)

Total equity

 

2,743,708

 

2,517,489

 

Total liabilities and equity

$

4,943,105

$

4,768,078

 

Acadia Healthcare Company, Inc.
Condensed Consolidated Statements of Cash Flows
(Unaudited)
 

Nine Months Ended September 30,

 

2022

 

 

 

2021

 

(In thousands)
Operating activities:
Net income

$

216,888

 

$

124,043

 

Adjustments to reconcile net income to net cash provided by continuing operating activities:
Depreciation and amortization

 

87,627

 

 

78,349

 

Amortization of debt issuance costs

 

2,440

 

 

3,265

 

Equity-based compensation expense

 

21,745

 

 

24,988

 

Deferred income taxes

 

20,176

 

 

8,995

 

Loss from discontinued operations, net of taxes

 

 

 

12,641

 

Debt extinguishment costs

 

 

 

24,650

 

Loss on impairment

 

 

 

24,293

 

Other

 

2,422

 

 

881

 

Change in operating assets and liabilities, net of effect of acquisitions:
Accounts receivable, net

 

(35,538

)

 

(8,610

)

Other current assets

 

(28,692

)

 

(2,758

)

Other assets

 

3,373

 

 

(15,846

)

Accounts payable and other accrued liabilities

 

7,729

 

 

6,358

 

Accrued salaries and benefits

 

(8,831

)

 

18,820

 

Other liabilities

 

10,303

 

 

(11,633

)

Government relief funds

 

(32,617

)

 

(12,058

)

Net cash provided by continuing operating activities

 

267,025

 

 

276,378

 

Net cash provided by discontinued operating activities

 

 

 

253

 

Net cash provided by operating activities

 

267,025

 

 

276,631

 

 
Investing activities:
Cash paid for capital expenditures

 

(208,792

)

 

(156,624

)

Proceeds from U.K. Sale

 

 

 

1,511,020

 

Settlement of foreign currency derivatives

 

 

 

(84,795

)

Proceeds from sale of property and equipment

 

1,784

 

 

1,792

 

Cash paid for purchase of finance lease

 

 

 

(31,401

)

Other

 

(6,802

)

 

3,106

 

Net cash (used in) provided by investing activities

 

(213,810

)

 

1,243,098

 

 
Financing activities:
Borrowings on long-term debt

 

 

 

425,000

 

Borrowings on revolving credit facility

 

 

 

430,000

 

Principal payments on revolving credit facility

 

(85,000

)

 

(330,000

)

Principal payments on long-term debt

 

(13,281

)

 

(5,313

)

Repayment of long-term debt

 

 

 

(2,227,935

)

Payment of debt issuance costs

 

 

 

(7,964

)

Repurchase of shares for payroll tax withholding, net of proceeds from stock option exercises

 

(7,541

)

 

16,072

 

Contributions from noncontrolling partners in joint ventures

 

13,178

 

 

1,800

 

Distributions to noncontrolling partners in joint ventures

 

(1,004

)

 

(926

)

Other

 

39

 

 

(6,914

)

Net cash used in financing activities

 

(93,609

)

 

(1,706,180

)

 
Effect of exchange rate changes on cash

 

 

 

4,067

 

 
Net decrease in cash and cash equivalents

 

(40,394

)

 

(182,384

)

Cash and cash equivalents at beginning of the period

 

133,813

 

 

378,697

 

Cash and cash equivalents at end of the period

$

93,419

 

$

196,313

 

Acadia Healthcare Company, Inc.
Operating Statistics
(Unaudited, Revenue in thousands)
 

Three Months Ended September 30,

 

Nine Months Ended September 30,

 

2022

 

 

 

2021

 

 

% Change

 

 

2022

 

 

 

2021

 

 

% Change

U.S. Same Facility Results (1)
Revenue

$

640,343

 

$

580,930

 

10.2

%

$

1,859,200

 

$

1,703,906

 

9.1

%

Patient Days

 

713,531

 

 

691,956

 

3.1

%

 

2,110,129

 

 

2,068,842

 

2.0

%

Admissions

 

45,445

 

 

45,192

 

0.6

%

 

133,204

 

 

136,183

 

-2.2

%

Average Length of Stay (2)

 

15.7

 

 

15.3

 

2.5

%

 

15.8

 

 

15.2

 

4.3

%

Revenue per Patient Day

$

897

 

$

840

 

6.9

%

$

881

 

$

824

 

7.0

%

Adjusted EBITDA margin (3)

 

30.5

%

 

29.0

%

150 bps

 

29.9

%

 

28.0

%

190 bps
Adjusted EBITDA margin excluding income from provider relief fund

 

29.3

%

 

29.0

%

30 bps

 

29.0

%

 

28.0

%

100 bps
 
U.S. Facility Results
Revenue

$

666,732

 

$

587,559

 

13.5

%

$

1,935,104

 

$

1,720,914

 

12.4

%

Patient Days

 

738,702

 

 

701,352

 

5.3

%

 

2,179,805

 

 

2,088,477

 

4.4

%

Admissions

 

47,692

 

 

45,246

 

5.4

%

 

139,930

 

 

136,384

 

2.6

%

Average Length of Stay (2)

 

15.5

 

 

15.5

 

-0.1

%

 

15.6

 

 

15.3

 

1.7

%

Revenue per Patient Day

$

903

 

$

838

 

7.7

%

$

888

 

$

824

 

7.7

%

Adjusted EBITDA margin (3)

 

28.7

%

 

28.3

%

40 bps

 

28.3

%

 

27.7

%

60 bps
Adjusted EBITDA margin excluding income from provider relief fund

 

27.5

%

 

28.3

%

-80 bps

 

27.4

%

 

27.7

%

-30 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 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 Income Attributable to Acadia Healthcare Company, Inc. to Adjusted EBITDA
(Unaudited)
 

Three Months Ended September 30,

 

Nine Months Ended September 30,

 

2022

 

 

 

2021

 

 

 

2022

 

 

 

2021

 

(in thousands)
 
Net income attributable to Acadia Healthcare Company, Inc.

$

71,099

 

$

66,126

 

$

212,015

 

$

120,357

 

Net income attributable to noncontrolling interests

 

1,947

 

 

1,774

 

 

4,873

 

 

3,686

 

Loss from discontinued operations, net of taxes

 

 

 

 

 

 

 

12,641

 

Provision for income taxes

 

24,056

 

 

17,411

 

 

69,183

 

 

42,948

 

Interest expense, net

 

18,003

 

 

15,706

 

 

50,355

 

 

61,420

 

Depreciation and amortization

 

29,573

 

 

27,805

 

 

87,627

 

 

78,349

 

EBITDA

 

144,678

 

 

128,822

 

 

424,053

 

 

319,401

 

 
Adjustments:
Equity-based compensation expense (a)

 

7,240

 

 

8,923

 

 

21,745

 

 

24,988

 

Transaction-related expenses (b)

 

10,859

 

 

3,035

 

 

18,381

 

 

9,320

 

Debt extinguishment costs (c)

 

 

 

 

 

 

 

24,650

 

Loss on impairment (d)

 

 

 

1,079

 

 

 

 

24,293

 

Adjusted EBITDA

$

162,777

 

$

141,859

 

$

464,179

 

$

402,652

 

 
Adjusted EBITDA margin

 

24.4

%

 

24.1

%

 

24.0

%

 

23.4

%

 
 
Adjusted EBITDA excluding income from provider relief fund

$

155,121

 

$

141,859

 

$

447,973

 

$

402,652

 

 
Adjusted EBITDA margin excluding income from provider relief fund

 

23.3

%

 

24.1

%

 

23.1

%

 

23.4

%

 
See footnotes on page 12.

Contacts

Gretchen Hommrich

Vice President, Investor Relations

(615) 861-6000

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