U.S. Same Facility Revenue Grows
6.6%
Company Narrows 2019 Guidance
Acadia Healthcare Company, Inc. (NASDAQ: ACHC) today announced
financial results for the second quarter ended June 30, 2019.
The Company reported revenue of $789.4 million for the second
quarter of 2019, a 3.1% increase compared with $765.7 million for
the second quarter of 2018. Net income attributable to Acadia
stockholders was $48.1 million, or $0.55 per diluted share, for the
second quarter of 2019 compared with $58.8 million, or $0.67 per
diluted share, for the second quarter of 2018. Results for the
second quarter of 2019 include transaction-related expenses of $5.2
million and the income tax effect of adjustments to income of $0.4
million based on a tax rate of 17.2%. Adjusted income attributable
to Acadia stockholders was $53.8 million, or $0.61 per diluted
share, for the second quarter of 2019. Results for the second
quarter of 2018 included transaction-related expenses of $2.9
million and the income tax effect of adjustments to income of $0.5
million based on a tax rate of 15.2%. Adjusted income attributable
to Acadia stockholders for the second quarter of 2018 was $61.2
million, or $0.70 per diluted share.
A reconciliation of all non-GAAP financial results in this
release appears beginning on page 8.
“We are pleased to report a solid financial and operating
performance for the second quarter of 2019,” said Debbie Osteen,
Chief Executive Officer of Acadia Healthcare Company. “These
results were in line with expectations, reflecting consistent
execution of our growth strategy. Our U.S. operations showed strong
top-line growth and favorable trends in key operating metrics
compared with the second quarter of 2018. For our U.K. operations,
we delivered both sequential and year-over-year revenue growth for
the second quarter of 2019. Across our operations, we are working
hard to deliver on the operational efficiencies identified during
our recent strategic review, while meeting our primary objective to
deliver the highest quality of patient care.
“We have continued to focus on bed expansion opportunities and
additional service offerings as the primary drivers of our growth.
During the second quarter of 2019, we added 118 beds to Acadia’s
operations. These expansions included the addition of 72 beds to
existing facilities and 46 beds related to the acquisition of
Bradford Recovery Center, a specialty treatment facility located in
Millerton, Pennsylvania. For the full year 2019, we expect to add
approximately 700 beds to existing and new facilities, exclusive of
acquisitions,” added Osteen.
The Company’s total same facility revenue increased 5.7% for the
second quarter of 2019 compared with the second quarter of 2018,
including a 1.7% increase in patient days and a 3.9% increase in
revenue per patient day. Total same facility EBITDA margin declined
110 basis points to 24.7%. U.S. same facility revenue rose 6.6%, on
a 3.3% increase in patient days and a 3.2% increase in revenue per
patient day. U.S. same facility EBITDA margin was consistent with
the second quarter last year at 28.2%. For the U.K. operations,
same facility revenue grew 3.9% for the second quarter of 2019 from
the second quarter last year, reflecting a 4.1% increase in revenue
per patient day offset by a 0.2% decrease in patient days. U.K.
same facility EBITDA margin declined 360 basis points to 17.8%.
Acadia’s consolidated adjusted EBITDA for the second quarter of
2019 was $158.9 million, compared with $165.0 million for the
second quarter of 2018.
Acadia narrowed its previously established financial guidance
for 2019, as follows:
- Revenue for 2019 in a range of $3.15 billion to $3.175
billion;
- Adjusted EBITDA for 2019 in a range of $610 million to $620
million; and
- Adjusted earnings per diluted share for 2019 in a range of
$2.15 to $2.23.
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 income
attributable to noncontrolling interests, provision for income
taxes, net interest expense and depreciation and amortization.
Adjusted EBITDA is defined as EBITDA adjusted for equity-based
compensation expense, transaction-related expenses and debt
extinguishment costs. Adjusted income is defined as net income
adjusted for transaction-related expenses, tax reform impact, debt
extinguishment costs and income tax effect of adjustments to
income.
Acadia will hold a conference call to discuss its second quarter
2019 financial results at 9:00 a.m. Eastern Time on Wednesday, July
31, 2019. 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 August 15, 2019.
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) our ability to successfully implement the strategic initiatives
that we adopted following our review of our business in early 2019;
(ii) potential difficulties operating our business in light of
political and economic instability in the U.K. and globally
relating to Brexit; (iii) the impact of fluctuations in foreign
exchange rates, including the devaluation of the British Pound
Sterling (GBP) relative to the U.S. Dollar (USD); (iv) Acadia’s
ability to complete acquisitions and successfully integrate the
operations of acquired facilities; (v) Acadia’s ability to add
beds, expand services, enhance marketing programs and improve
efficiencies at its facilities; (vi) potential reductions in
payments received by Acadia from government and third-party payors;
(vii) the occurrence of patient incidents and governmental
investigations, which could adversely affect the price of our
common stock and result in substantial fines and incremental
regulatory burdens; (viii) 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 (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 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 leading provider of behavioral healthcare services.
At June 30, 2019, Acadia operated a network of 595 behavioral
healthcare facilities with approximately 18,200 beds in 40 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, specialty
treatment facilities, residential treatment centers and outpatient
clinics.
Acadia Healthcare Company, Inc. Condensed
Consolidated Statements of Income (Unaudited)
Three Months Ended June
30,
Six Months Ended June
30,
2019
2018
2019
2018
(In thousands, except per
share amounts)
Revenue
$
789,362
$
765,738
$
1,549,979
$
1,507,979
Salaries, wages and benefits (including equity-based
compensation expense of $4,182, $7,129, $10,283 and $14,048,
respectively)
430,219
416,741
859,798
828,269
Professional fees
58,429
53,461
115,436
107,479
Supplies
30,914
30,133
60,871
59,497
Rents and leases
20,419
20,236
40,726
40,524
Other operating expenses
94,677
87,282
188,542
175,513
Depreciation and amortization
41,077
39,928
81,657
79,701
Interest expense, net
48,610
45,812
96,740
91,055
Debt extinguishment costs
-
-
-
940
Transaction-related expenses
5,212
2,887
9,533
7,655
Total expenses
729,557
696,480
1,453,303
1,390,633
Income before income taxes
59,805
69,258
96,676
117,346
Provision for income taxes
11,604
10,368
18,964
7,582
Net income
48,201
58,890
77,712
109,764
Net income attributable to noncontrolling interests
(61
)
(54
)
(101
)
(109
)
Net income attributable to Acadia Healthcare Company, Inc.
$
48,140
$
58,836
$
77,611
$
109,655
Earnings per share attributable to Acadia Healthcare
Company, Inc. stockholders: Basic
$
0.55
$
0.67
$
0.89
$
1.26
Diluted
$
0.55
$
0.67
$
0.88
$
1.26
Weighted-average shares outstanding: Basic
87,618
87,303
87,562
87,205
Diluted
87,837
87,467
87,770
87,351
Acadia Healthcare Company, Inc. Condensed
Consolidated Balance Sheets (Unaudited)
June 30,
December 31,
2019
2018
(In thousands)
ASSETS Current assets: Cash and cash equivalents
$
43,541
$
50,510
Accounts receivable, net
346,489
318,087
Other current assets
81,464
81,820
Total current assets
471,494
450,417
Property and equipment, net
3,164,076
3,107,766
Goodwill
2,435,025
2,396,412
Intangible assets, net
89,613
88,990
Deferred tax assets
3,404
3,468
Derivative instrument assets
72,965
60,524
Operating lease right-of-use assets
491,551
-
Other assets
62,290
64,927
Total assets
$
6,790,418
$
6,172,504
LIABILITIES AND EQUITY Current liabilities:
Current portion of long-term debt
$
38,895
$
34,112
Accounts payable
115,651
117,740
Accrued salaries and benefits
110,445
113,299
Current portion of operating lease liabilities
27,578
-
Other accrued liabilities
138,119
151,226
Total current liabilities
430,688
416,377
Long-term debt
3,206,868
3,159,375
Deferred tax liabilities
83,096
80,372
Operating lease liabilities
490,903
-
Other liabilities
124,310
154,267
Total liabilities
4,335,865
3,810,391
Redeemable noncontrolling interests
32,207
28,806
Equity: Common stock
876
874
Additional paid-in capital
2,550,653
2,541,987
Accumulated other comprehensive loss
(459,617
)
(462,377
)
Retained earnings
330,434
252,823
Total equity
2,422,346
2,333,307
Total liabilities and equity
$
6,790,418
$
6,172,504
Acadia Healthcare Company, Inc. Condensed
Consolidated Statements of Cash Flows (Unaudited)
Six Months Ended June
30,
2019
2018
(In thousands)
Operating activities: Net income
$
77,712
$
109,764
Adjustments to reconcile net income to net cash provided by
continuing operating activities: Depreciation and amortization
81,657
79,701
Amortization of debt issuance costs
5,887
5,124
Equity-based compensation expense
10,283
14,048
Deferred income taxes
(205
)
(3,978
)
Debt extinguishment costs
-
940
Other
2,395
1,040
Change in operating assets and liabilities: Accounts receivable,
net
(27,669
)
(26,104
)
Other current assets
(10,591
)
9,953
Other assets
661
2,761
Accounts payable and other accrued liabilities
(11,060
)
21,066
Accrued salaries and benefits
(3,232
)
4,364
Other liabilities
2,848
(793
)
Net cash provided by continuing operating activities
128,686
217,886
Net cash used in discontinued operating activities
-
(572
)
Net cash provided by operating activities
128,686
217,314
Investing activities: Cash paid for acquisitions, net
of cash acquired
(44,900
)
-
Cash paid for capital expenditures
(139,128
)
(161,555
)
Cash paid for real estate acquisitions
(4,448
)
(8,857
)
Other
10,494
(3,337
)
Net cash used in investing activities
(177,982
)
(173,749
)
Financing activities: Borrowings on revolving credit
facility
76,573
-
Principal payments on revolving credit facility
(11,573
)
-
Principal payments on long-term debt
(16,492
)
(23,246
)
Common stock withheld for minimum statutory taxes, net
(1,615
)
(2,134
)
Other
(4,345
)
(5,172
)
Net cash provided by (used in) financing activities
42,548
(30,552
)
Effect of exchange rate changes on cash
(221
)
(840
)
Net (decrease) increase in cash and cash equivalents
(6,969
)
12,173
Cash and cash equivalents at beginning of the period
50,510
67,290
Cash and cash equivalents at end of the period
$
43,541
$
79,463
Effect of acquisitions: Assets acquired, excluding
cash
$
48,555
$
-
Liabilities assumed
(3,655
)
-
Cash paid for acquisitions, net of cash acquired
$
44,900
$
-
Acadia Healthcare Company,
Inc.
Operating Statistics
(Unaudited, Revenue in
thousands)
Three Months Ended June
30,
Six Months Ended June
30,
2019
2018
% Change
2019
2018
% Change
Same Facility Results (a,c) Revenue
$
748,877
$
708,672
5.7%
$
1,472,684
$
1,393,898
5.7%
Patient Days
1,139,514
1,119,945
1.7%
2,262,522
2,212,314
2.3%
Admissions
43,761
42,559
2.8%
87,488
83,700
4.5%
Average Length of Stay (b)
26.0
26.3
-1.0%
25.9
26.4
-2.2%
Revenue per Patient Day
$
657
$
633
3.9%
$
651
$
630
3.3%
EBITDA margin
24.7%
25.8%
-110 bps
23.7%
25.0%
-130 bps U.S. Same Facility Results (a) Revenue
$
494,524
$
463,961
6.6%
$
969,542
$
911,545
6.4%
Patient Days
636,518
616,123
3.3%
1,262,072
1,215,633
3.8%
Admissions
41,472
40,186
3.2%
82,815
78,891
5.0%
Average Length of Stay (b)
15.3
15.3
0.1%
15.2
15.4
-1.1%
Revenue per Patient Day
$
777
$
753
3.2%
$
768
$
750
2.4%
EBITDA margin
28.2%
28.2%
0 bps
27.2%
27.2%
0 bps U.K. Same Facility Results (a,c) Revenue
$
254,353
$
244,711
3.9%
$
503,142
$
482,353
4.3%
Patient Days
502,996
503,822
-0.2%
1,000,450
996,681
0.4%
Admissions
2,289
2,373
-3.5%
4,673
4,809
-2.8%
Average Length of Stay (b)
219.7
212.3
3.5%
214.1
207.3
3.3%
Revenue per Patient Day
$
506
$
486
4.1%
$
503
$
484
3.9%
EBITDA margin
17.8%
21.4%
-360 bps
17.1%
21.0%
-390 bps U.S. Facility Results Revenue
$
509,813
$
481,470
5.9%
$
997,773
$
943,875
5.7%
Patient Days
656,456
635,766
3.3%
1,296,780
1,248,655
3.9%
Admissions
43,153
40,519
6.5%
85,405
79,451
7.5%
Average Length of Stay (b)
15.2
15.7
-3.0%
15.2
15.7
-3.4%
Revenue per Patient Day
$
777
$
757
2.5%
$
769
$
756
1.8%
EBITDA margin
26.6%
27.0%
-40 bps
25.5%
26.2%
-70 bps U.K. Facility Results (c) Revenue
$
279,549
$
268,562
4.1%
$
552,206
$
530,453
4.1%
Patient Days
671,140
676,901
-0.9%
1,335,533
1,342,472
-0.5%
Admissions
2,653
2,712
-2.2%
5,411
5,474
-1.2%
Average Length of Stay (b)
253.0
249.6
1.4%
246.8
245.2
0.6%
Revenue per Patient Day
$
417
$
397
5.0%
$
413
$
395
4.6%
EBITDA margin
16.4%
19.1%
-270 bps
15.6%
18.7%
-310 bps Total Facility Results (c) Revenue
$
789,362
$
750,032
5.2%
$
1,549,979
$
1,474,328
5.1%
Patient Days
1,327,596
1,312,667
1.1%
2,632,313
2,591,127
1.6%
Admissions
45,806
43,231
6.0%
90,816
84,925
6.9%
Average Length of Stay (b)
29.0
30.4
-4.5%
29.0
30.5
-5.0%
Revenue per Patient Day
$
595
$
571
4.1%
$
589
$
569
3.5%
EBITDA margin
23.0%
24.2%
-120 bps
22.0%
23.5%
-150 bps (a) Results for the periods presented exclude the
elderly care division of our U.K. operations and certain closed
services. (b) Average length of stay is defined as patient days
divided by admissions. (c) Revenue and revenue per patient day for
the three and six months ended June 30, 2018 is adjusted to reflect
the foreign currency exchange rate for the comparable periods of
2019 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 both the three and six months ended
June 30, 2018 is 1.29.
Acadia Healthcare Company,
Inc.
Reconciliation of Net Income
Attributable to Acadia Healthcare Company, Inc. to Adjusted
EBITDA
(Unaudited)
Three Months Ended June
30,
Six Months Ended June
30,
2019
2018
2019
2018
(in thousands)
Net income attributable to Acadia Healthcare Company, Inc.
$
48,140
$
58,836
$
77,611
$
109,655
Net income attributable to noncontrolling interests
61
54
101
109
Provision for income taxes
11,604
10,368
18,964
7,582
Interest expense, net
48,610
45,812
96,740
91,055
Depreciation and amortization
41,077
39,928
81,657
79,701
EBITDA
149,492
154,998
275,073
288,102
Adjustments: Equity-based compensation expense (a)
4,182
7,129
10,283
14,048
Transaction-related expenses (b)
5,212
2,887
9,533
7,655
Debt extinguishment costs (c)
-
-
-
940
Adjusted EBITDA
$
158,886
$
165,014
$
294,889
$
310,745
See footnotes on page 10.
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 June
30,
Six Months Ended June
30,
2019
2018
2019
2018
(in thousands, except per
share amounts)
Net income attributable to Acadia Healthcare Company, Inc.
$
48,140
$
58,836
$
77,611
$
109,655
Adjustments to income: Transaction-related expenses (b)
5,212
2,887
9,533
7,655
Tax reform impact (d)
-
-
-
(10,472
)
Debt extinguishment costs (c)
-
-
-
940
Income tax effect of adjustments to income (e)
438
(554
)
987
(1,415
)
Adjusted income attributable to Acadia Healthcare Company, Inc.
$
53,790
$
61,169
$
88,131
$
106,363
Weighted-average shares outstanding - diluted
87,837
87,467
87,770
87,351
Adjusted income attributable to Acadia Healthcare Company, Inc. per
diluted share
$
0.61
$
0.70
$
1.00
$
1.22
See footnotes on page 10.
Acadia Healthcare Company,
Inc. Footnotes We have included certain financial
measures in this press release, including EBITDA, Adjusted EBITDA,
and 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 income attributable to
noncontrolling interests, provision for income taxes, net interest
expense and depreciation and amortization. We define Adjusted
EBITDA as EBITDA adjusted for equity-based compensation expense,
transaction-related expenses and debt extinguishment costs. We
define Adjusted income as net income adjusted for
transaction-related expenses, tax reform impact, debt
extinguishment costs, and income tax effect of adjustments to
income. EBITDA, Adjusted EBITDA, and 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,
and 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, and Adjusted income may not be comparable to similarly
titled measures of other companies. We have included information
concerning EBITDA, Adjusted EBITDA, and 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, and Adjusted income when reporting their
results. Our presentation of EBITDA, Adjusted EBITDA, and Adjusted
income 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 acquisitions and integration efforts. (c) Represents debt
extinguishment costs recorded in connection with the repricing
amendments to the Amended and Restated Credit Agreement in March
2018. (d) Represents tax benefit related to the enactment of
the Tax Cuts and Jobs Act. (e) Represents the income tax
effect of adjustments to income based on tax rates of 17.2% and
15.2% for the three months ended June 30, 2019 and 2018,
respectively, and 16.9% and 15.5% for the six months ended June 30,
2019 and 2018, respectively.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20190730005997/en/
Gretchen Hommrich Director, Investor Relations (615)
861-6000
Acadia Healthcare (NASDAQ:ACHC)
Historical Stock Chart
From Aug 2024 to Sep 2024
Acadia Healthcare (NASDAQ:ACHC)
Historical Stock Chart
From Sep 2023 to Sep 2024