Affirms Financial Guidance for 2017
Acadia Healthcare Company, Inc. (NASDAQ: ACHC) today announced
financial results for the first quarter ended March 31, 2017.
Revenue for the quarter was $679.2 million, an increase of 10.1%
from $616.8 million for the first quarter of 2016. Net income
attributable to Acadia stockholders increased 36.1% to $35.0
million for the first quarter of 2017 from $25.7 million for the
first quarter of 2016. Net income attributable to Acadia
stockholders per diluted share increased 29.0% to $0.40 for the
first quarter of 2017 from $0.31 for the first quarter of 2016, on
a 4.2% increase in weighted average diluted shares outstanding.
Adjusted income from continuing operations attributable to Acadia
stockholders per diluted share was $0.46 for the first quarter of
2017 compared with $0.55 for the first quarter of 2016. The results
for the first quarter of 2017 were impacted by the decline in the
exchange rate of the British Pound Sterling to the U.S. dollar, the
divestiture of 22 facilities in the U.K. during the fourth quarter
of 2016 and the loss of one day due to leap year in 2016. A
reconciliation of all non-GAAP financial results in this release
appears beginning on page 8.
Joey Jacobs, Chairman and Chief Executive Officer of Acadia,
commented, “Acadia produced financial results for the first quarter
of 2017 that were largely consistent with our expectations for the
quarter and financial guidance for the year. Our revenue growth
primarily resulted from the acquisition of Priory Group on February
16, 2016, which added approximately 6,200 beds, net of the
divestiture, to our operations in the United Kingdom. In the
trailing 12 months ended March 31, 2017, we also acquired nearly
240 beds through three transactions and added 719 beds to existing
facilities and de novo facilities, 82 of which were added to
existing facilities in the first quarter of 2017.
“The favorable impact of the growth in our beds in operation
during the first quarter was partially offset by a reduction of
approximately six percentage points in our revenue growth rate due
to the post-Brexit decline in the exchange rate of the British
Pound Sterling to the U.S. dollar, in addition to the impact of the
first quarter of 2017 having one less day due to leap year in
2016.”
Acadia’s same facility revenues increased 4.8% for the first
quarter of 2017 compared with the same prior-year quarter, as
patient days rose 3.7% and revenue per patient day increased 1.0%.
Same facility revenue increased 5.5% for the U.S. facilities, with
an increase of 5.8% in patient days and a decline of 0.3% in
revenue per patient day. Same facility revenues increased 2.6% for
the U.K. facilities, with a 0.1% increase in patient days and a
2.4% increase in revenue per patient day. Total same facility
EBITDA margin declined to 25.2% for the first quarter of 2017 from
25.6% for the first quarter of 2016. Acadia’s consolidated adjusted
EBITDA was $136.4 million for the first quarter of 2017, up 4.1%
from $131.0 million for the first quarter of 2016.
As of January 1, 2017, the Company adopted a new accounting
standard, ASU 2016-09, under which adjustments to the income tax
effects of share-based awards are now recognized in the income
statement when the awards vest, instead of through equity on the
balance sheet. This change resulted in an increase in Acadia’s
income tax provision for the first quarter of 2017 of $1.7 million
or an increase in the unadjusted tax rate of 3.6 percentage points.
Adjusted income from continuing operations for the first quarter of
2017 excludes the impact of adopting ASU 2016-09, and as a result
the adjusted tax rate is 24.5%.
Acadia today affirmed its previously established financial
guidance for 2017, as follows:
- Revenue for 2017 in a range of $2.85
billion to $2.9 billion;
- Adjusted EBITDA for 2017 in a range of
$625 million to $640 million; and
- Adjusted earnings per diluted share for
2017 in a range $2.40 to $2.50.
The Company’s 2017 financial guidance assumes an exchange rate
of $1.25 per British Pound Sterling and a tax rate of approximately
25%. The Company’s guidance does not include the impact of any
future acquisitions or transaction-related expenses. EBITDA is
defined as net income adjusted for net loss attributable to
noncontrolling interests, income tax provision, net interest
expense and depreciation and amortization. Adjusted EBITDA is
defined as EBITDA adjusted for equity-based compensation expense,
gain on foreign currency derivatives and transaction-related
expenses. Adjusted income is defined as net income adjusted for
provision for income taxes, gain on foreign currency derivatives,
transaction-related expenses and income tax provision reflecting
tax effect of adjustments attributable to Acadia.
Acadia will hold a conference call to discuss its first quarter
financial results at 8:00 a.m. Eastern Time on Wednesday,
April 26, 2017. 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
through May 10, 2017.
Risk Factors
This news 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
news 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 operating our business in light of
political and economic instability in the U.K. and globally
following the referendum in the U.K. on June 23, 2016, in which
voters approved an exit from the European Union, or Brexit; (ii)
the impact of fluctuations in foreign exchange rates, including the
devaluation of the British Pound Sterling (GBP) relative to the
U.S. Dollar (USD) following the Brexit vote; (iii) Acadia’s ability
to complete acquisitions and successfully integrate the operations
of acquired facilities, including Priory facilities; (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 and
governmental investigations, which could adversely affect the price
of our common stock and result in 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; and (viii) potential operating
difficulties, client preferences, changes in competition and
general economic or industry conditions that may prevent Acadia
from realizing the expected benefits of its business strategy.
These factors and others are more fully described in Acadia’s
periodic reports and other filings with the SEC.
About Acadia
Acadia is a provider of behavioral healthcare services. At March
31, 2017, Acadia operated a network of 575 behavioral healthcare
facilities with approximately 17,200 beds in 39 states, the United
Kingdom and Puerto Rico. Acadia provides behavioral health and
addiction services to its patients in a variety of settings,
including inpatient psychiatric hospitals, residential treatment
centers, outpatient clinics and therapeutic school-based
programs.
Acadia Healthcare Company, Inc. Condensed
Consolidated Statements of Operations (Unaudited)
Three Months Ended March 31,
2017 2016 (In thousands, except per share
amounts) Revenue before provision for doubtful accounts
$ 689,341 $ 627,183 Provision for doubtful accounts (10,147
) (10,370 ) Revenue 679,194 616,813
Salaries, wages and benefits (including
equity-based compensation expense of $7,396 and $6,956,
respectively)
376,421 341,028 Professional fees 43,409 39,991 Supplies 27,709
26,685 Rents and leases 18,971 14,806 Other operating expenses
83,711 70,247 Depreciation and amortization 33,613 27,975 Interest
expense, net 42,757 37,714 Gain on foreign currency derivatives -
(410 ) Transaction-related expenses 4,119
26,298 Total expenses 630,710 584,334
Income before income taxes 48,484 32,479 Provision for
income taxes 13,711 7,110 Net income
34,773 25,369 Net loss attributable to noncontrolling interests
185 319 Net income attributable to
Acadia Healthcare Company, Inc. $ 34,958 $ 25,688
Earnings per share attributable to Acadia Healthcare
Company, Inc. stockholders: Basic $ 0.40 $ 0.31
Diluted $ 0.40 $ 0.31 Weighted-average shares
outstanding: Basic 86,762 82,943 Diluted 86,908 83,420
Acadia Healthcare Company, Inc. Condensed
Consolidated Balance Sheets (Unaudited)
March 31,2017
December 31,2016
(In thousands) ASSETS Current assets: Cash and
cash equivalents $ 43,087 $ 57,063
Accounts receivable, net of allowance for
doubtful accounts of $41,121 and $38,916, respectively
276,089 263,327 Other current assets 104,837
107,537 Total current assets 424,013 427,927 Property and
equipment, net 2,749,538 2,703,695 Goodwill 2,683,787 2,681,188
Intangible assets, net 83,718 83,310 Deferred tax assets -
noncurrent 3,750 3,780 Derivative instruments 59,257 73,509 Other
assets 61,727 51,317 Total assets $
6,065,790 $ 6,024,726
LIABILITIES
AND EQUITY Current liabilities: Current portion of long-term
debt $ 34,805 $ 34,805 Accounts payable 92,673 80,034 Accrued
salaries and benefits 102,333 105,068 Other accrued liabilities
106,046 122,958 Total current
liabilities 335,857 342,865 Long-term debt 3,246,577 3,253,004
Deferred tax liabilities - noncurrent 63,858 78,520 Other
liabilities 165,995 164,859 Total
liabilities 3,812,287 3,839,248 Redeemable noncontrolling interests
17,570 17,754 Equity: Common stock 869 867 Additional paid-in
capital 2,499,760 2,496,288 Accumulated other comprehensive loss
(528,392 ) (549,570 ) Retained earnings 263,696
220,139 Total equity 2,235,933
2,167,724 Total liabilities and equity $ 6,065,790 $
6,024,726
Acadia Healthcare Company,
Inc. Condensed Consolidated Statements of Cash Flows
(Unaudited) Three Months
Ended March 31, 2017 2016 (In thousands)
Operating activities: Net income $ 34,773 $ 25,369
Adjustments to reconcile net income to net cash provided by
continuing operating activities: Depreciation and amortization
33,613 27,975 Amortization of debt issuance costs 2,396 2,147
Equity-based compensation expense 7,396 6,956 Deferred income tax
expense 2,007 9,085 Gain on foreign currency derivatives - (410 )
Other 3,825 882 Change in operating assets and liabilities, net of
effect of acquisitions: Accounts receivable, net (12,459 ) (3,749 )
Other current assets 5,886 (8,075 ) Other assets (1,710 ) (2,402 )
Accounts payable and other accrued liabilities (16,993 ) 7,498
Accrued salaries and benefits (3,437 ) (6,347 ) Other liabilities
2,142 354 Net cash provided by
continuing operating activities 57,439 59,283 Net cash used in
discontinued operating activities (425 ) (619 ) Net
cash provided by operating activities 57,014 58,664
Investing activities: Cash paid for acquisitions, net of
cash acquired - (580,096 ) Cash paid for capital expenditures
(50,549 ) (90,089 ) Cash paid for real estate acquisitions (2,495 )
(14,799 ) Settlement of foreign currency derivatives - 745 Other
(5,051 ) (1,208 ) Net cash used in investing
activities (58,095 ) (685,447 )
Financing activities:
Borrowings on long-term debt - 1,480,000 Borrowings on revolving
credit facility - 58,000 Principal payments on revolving credit
facility - (166,000 ) Principal payments on long-term debt (8,638 )
(13,669 ) Repayment of assumed debt - (1,348,389 ) Payment of debt
issuance costs - (34,167 ) Issuance of common stock, net - 685,097
Common stock withheld for minimum statutory taxes, net (4,234 )
(6,679 ) Other (865 ) (224 ) Net cash (used in)
provided by financing activities (13,737 ) 653,969
Effect of exchange rate changes on cash 842
(1,819 ) Net (decrease) increase in cash and
cash equivalents (13,976 ) 25,367 Cash and cash equivalents at
beginning of the period 57,063 11,215
Cash and cash equivalents at end of the period $ 43,087 $
36,582
Effect of acquisitions: Assets acquired, excluding cash $ -
$ 2,372,358 Liabilities assumed - (1,575,380 ) Issuance of common
stock in connection with acquisition -
(216,882 ) Cash paid for acquisitions, net of cash acquired $ -
$ 580,096
Acadia Healthcare Company,
Inc. Operating Statistics (Unaudited, Revenue in
thousands)
Three Months Ended March 31, 2017 2016 %
Change Same Facility Results (a,c) Revenue $ 547,965 $ 523,031
4.8% Patient Days 905,650 873,476 3.7% Admissions 37,489 34,514
8.6% Average Length of Stay (b) 24.2 25.3 -4.5% Revenue per Patient
Day $ 605 $ 599 1.0% EBITDA margin 25.2 % 25.6 % -40 bps
U.S. Same Facility Results (a) Revenue $ 418,852 $ 397,139 5.5%
Patient Days 583,805 552,016 5.8% Admissions 36,317 33,476 8.5%
Average Length of Stay (b) 16.1 16.5 -2.5% Revenue per Patient Day
$ 717 $ 719 -0.3% EBITDA margin 26.3 % 27.2 % -90 bps U.K.
Same Facility Results (a,c) Revenue $ 129,113 $ 125,892 2.6%
Patient Days 321,845 321,460 0.1% Admissions 1,172 1,038 12.9%
Average Length of Stay (b) 274.6 309.7 -11.3% Revenue per Patient
Day $ 401 $ 392 2.4% EBITDA margin 21.4 % 20.7 % 70 bps
U.S. Facility Results Revenue $ 440,223 $ 408,264
7.8% Patient Days 606,527 561,323 8.1% Admissions 38,356 34,465
11.3% Average Length of Stay (b) 15.8 16.3 -2.9% Revenue per
Patient Day $ 726 $ 727 -0.2% EBITDA margin 25.5 % 26.2 % -70 bps
U.K. Facility Results (c) Revenue $ 238,971 $ 152,291 56.9%
Patient Days 671,720 406,646 65.2% Admissions 2,589 1,391 86.1%
Average Length of Stay (b) 259.5 292.3 -11.3% Revenue per Patient
Day $ 356 $ 375 -5.0% EBITDA margin 18.5 % 20.1 % -160 bps
Total Facility Results (c) Revenue $ 679,194 $ 560,555 21.2%
Patient Days 1,278,247 967,969 32.1% Admissions 40,945 35,856 14.2%
Average Length of Stay (b) 31.2 27.0 15.6% Revenue per Patient Day
$ 531 $ 579 -8.2% EBITDA margin 23.0 % 24.5 % -150 bps
(a)
Same-facility results for the periods
presented exclude the U.K. divestiture and other closed
services.
(b)
Average length of stay is defined as
patient days divided by admissions.
(c)
U.K. Facility and Total Facility results
for the periods presented exclude the U.K. divestiture. Revenue and
revenue per patient day for the three months ended March 31, 2016
is adjusted to reflect the foreign currency exchange rate for the
comparable period of 2017 in order to eliminate the effect of
changes in the exchange rate. The exchange rate used in the
adjusted revenue and revenue per patient day amounts for the three
months ended March 31, 2016 is 1.24.
Acadia Healthcare Company, Inc.
Reconciliation of Net Income Attributable to Acadia Healthcare
Company, Inc. to Adjusted EBITDA (Unaudited)
Three Months Ended March 31,
2017 2016 (in thousands) Net income
attributable to Acadia Healthcare Company, Inc. $ 34,958 $ 25,688
Net loss attributable to noncontrolling interests (185 ) (319 )
Provision for income taxes 13,711 7,110 Interest expense, net
42,757 37,714 Depreciation and amortization 33,613
27,975 EBITDA 124,854 98,168 Adjustments:
Equity-based compensation expense (a) 7,396 6,956 Gain on foreign
currency derivatives (b) - (410 ) Transaction-related expenses (c)
4,119 26,298 Adjusted EBITDA $ 136,369
$ 131,012 See footnotes on page 11.
Acadia Healthcare Company, Inc. Reconciliation of
Adjusted Income Attributable to Acadia Healthcare Company, Inc.
to Net Income Attributable to Acadia Healthcare Company,
Inc. (Unaudited) Three
Months Ended March 31, 2017 2016 (in
thousands, except per share amounts) Net income
attributable to Acadia Healthcare Company, Inc. $ 34,958 $ 25,688
Provision for income taxes 13,711 7,110
Income attributable to Acadia Healthcare Company, Inc. before
income taxes 48,669 32,798 Adjustments to income: Gain on
foreign currency derivatives (b) - (410 ) Transaction-related
expenses (c) 4,119 26,298 Income tax provision reflecting tax
effect of adjustments to income (d) (12,912 ) (12,852
) Adjusted income attributable to Acadia Healthcare Company, Inc. $
39,876 $ 45,834 Weighted-average shares outstanding -
diluted 86,908 83,420 Adjusted income attributable to Acadia
Healthcare Company, Inc. per diluted share $ 0.46 $ 0.55
See footnotes on page 11.
Acadia
Healthcare Company, Inc. Constant Currency Condensed
Consolidated Statements of Operations (e) (Unaudited)
Three Months Ended March 31,
2017 2016 (In thousands, except per share
amounts) Revenue before provision for doubtful accounts
$ 726,811 $ 627,183 Provision for doubtful accounts (10,147
) (10,370 ) Revenue 716,664 616,813
Salaries, wages and benefits (including
equity-based compensation expense of $7,396 and $6,956,
respectively)
397,221 341,028 Professional fees 46,317 39,991 Supplies 28,969
26,685 Rents and leases 20,560 14,806 Other operating expenses
87,677 70,247 Depreciation and amortization 36,270 27,975 Interest
expense, net 42,789 37,714 Gain on foreign currency derivatives -
(410 ) Transaction-related expenses 4,532
26,298 Total expenses 664,335 584,334
Income before income taxes 52,329 32,479 Provision for
income taxes 13,951 7,110 Net income
38,378 25,369 Net loss attributable to noncontrolling interests
185 319 Net income attributable to
Acadia Healthcare Company, Inc. $ 38,563 $ 25,688
Constant Currency Reconciliation of Adjusted
Income Attributable to Acadia Healthcare Company, Inc. to
Net Income Attributable to Acadia Healthcare Company, Inc.
(g) (Unaudited) Net income attributable to Acadia
Healthcare Company, Inc. $ 38,563 $ 25,688 Provision for income
taxes 13,951 7,110 Income attributable
to Acadia Healthcare Company, Inc. before income taxes $ 52,514 $
32,798 Adjustments to income: Gain on foreign currency
derivatives (b) - (410 ) Transaction-related expenses (c) 4,532
26,298 Income tax provision reflecting tax effect of adjustments to
income (d) (13,240 ) (12,852 ) Adjusted income
attributable to Acadia Healthcare Company, Inc. $ 43,806 $ 45,834
Weighted-average shares outstanding - diluted 86,908 83,420
Adjusted income attributable to Acadia Healthcare Company,
Inc. per diluted share $ 0.50 $ 0.55 See
footnotes on page 11.
Acadia Healthcare Company, Inc. Footnotes
We have included certain financial measures in this press
release, including EBITDA, Adjusted EBITDA, Adjusted income, and
constant currency adjusted income, which are “non-GAAP financial
measures” as defined under the rules and regulations promulgated by
the SEC. We define EBITDA as net income adjusted for net loss
attributable to noncontrolling interests, income tax provision, net
interest expense and depreciation and amortization. We define
Adjusted EBITDA as EBITDA adjusted for equity-based compensation
expense, gain on foreign currency derivatives and
transaction-related expenses. We define Adjusted income as net
income adjusted for provision for income taxes, gain on foreign
currency derivatives, transaction-related expenses and income tax
provision reflecting tax effect of adjustments attributable to
Acadia. EBITDA, Adjusted EBITDA, Adjusted income and
constant currency adjusted income 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”). EBITDA, Adjusted EBITDA, Adjusted income and constant
currency adjusted income 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 EBITDA, Adjusted EBITDA, Adjusted income and constant currency
adjusted income may not be comparable to similarly titled measures
of other companies. We have included information concerning EBITDA,
Adjusted EBITDA, Adjusted income and constant currency adjusted
income 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 EBITDA, Adjusted EBITDA, Adjusted income and constant
currency adjusted income when reporting their results. Our
presentation of EBITDA, Adjusted EBITDA, Adjusted income and
constant currency adjusted income should not be construed as an
inference that our future results will be unaffected by unusual or
nonrecurring items. Foreign currency exchange rate
fluctuations affect the amounts reported from translating U.K.
revenues and expenses into USD. These rate fluctuations can have a
significant effect on our reported operating results. As a
supplement to our reported operating results, we present constant
currency financial information. We use constant currency financial
information to provide a framework to assess how our business
performed excluding the effects of changes in foreign currency
translation rates. Management believes this information is useful
to investors to facilitate comparison of operating results and
better identify trends in our businesses. To calculate financial
information on a constant currency basis, financial information in
the current period for amounts recorded in GBP is translated into
USD at the average exchange rates that were in effect during the
comparable period of the prior year (rather than the actual
exchange rates in effect during the current year period).
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 the change in
fair value of foreign currency derivatives purchased by Acadia
related to (i) acquisitions in the U.K. and (ii) transfers of cash
between the U.S. and U.K. under the Company’s cash management and
foreign currency risk management programs. (c) Represents
transaction-related expenses incurred by Acadia related to
acquisitions. (d) Represents the income tax provision
adjusted to reflect the tax effect of the adjustments to income
based on tax rates of 24.5% and 21.9% for the three months ended
March 31, 2017 and 2016, respectively. The adjusted income tax
provision for the three months ended March 31, 2017 excludes the
impact of adopting ASU 2016-09 "Improvements to Employee
Share-Based Payment Accounting” of approximately $1.7 million.
(e) Calculated on a constant currency basis whereby
financial information in the current period for amounts recorded
GBP is translated into USD at the average exchange rates in effect
during the comparable period of the prior year (rather than the
actual exchange rates in effect during the current year period).
The exchange rate used for the three months ended March 31, 2016 is
1.43.
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version on businesswire.com: http://www.businesswire.com/news/home/20170425006602/en/
Acadia Healthcare Company, Inc.Gretchen Hommrich,
615-861-6000Director, Investor Relations
Acadia Healthcare (NASDAQ:ACHC)
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