Acadia Healthcare Company, Inc. (NASDAQ: ACHC) today announced
financial results for the second quarter ended June 30, 2020.
The Company reported revenue of $750.3 million for the second
quarter of 2020, compared with $789.4 million for the second
quarter of 2019. Net income attributable to Acadia stockholders for
the second quarter of 2020 was $41.1 million, or $0.46 per diluted
share, compared to net income of $48.1 million, or $0.55 per
diluted share, for the same period in 2019.
During the second quarter of 2020, the Company recognized $18.1
million ($13.5 million, net of tax), or $0.15 per diluted share, in
other income from the provider relief fund established by the
Coronavirus Aid, Relief, and Economic Security (“CARES”) Act.
Results for the second quarter of 2020 also include
transaction-related expenses of $5.2 million, debt extinguishment
costs of $3.3 million and the income tax effect of adjustments to
income of $(1.5) million. 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.
Acadia’s consolidated adjusted EBITDA for the second quarter of
2020 was $144.4 million, compared to $158.9 million for the second
quarter of 2019. Adjusted income attributable to Acadia
stockholders per diluted share was $0.54 for the second quarter of
2020. A reconciliation of all non-GAAP financial results in this
press release appears beginning on page 8.
U.S. same facility revenue decreased 3.4%, including a 0.7%
decrease in patient days and a 2.7% decrease in revenue per patient
day, compared to the second quarter last year. The decrease in
revenue per day is primarily attributable to a decline in
outpatient volumes and reimbursement in certain markets for CTC
in-person services that was temporarily affected by stay-at-home
orders. In April, the Company experienced declines in inpatient
volumes as a result of a number of temporary factors related to the
COVID-19 pandemic. During the quarter, same facility patient days
improved from a decline of 6.7% in April to an increase of 0.1% in
May and an increase of 4.7% in June, compared to the same periods
in the prior year. The improved volume trends were driven by a
shift in marketing strategy and efforts and the easing of
stay-at-home orders and other restrictions. For the month of July,
same facility patient days were up 5.4% compared to last year, and
demand remains strong across the U.S. operations. U.S. same
facility EBITDA margin was 27.6% for the second quarter of
2020.
For the U.K. operations, same facility revenue decreased 3.8%
from the second quarter last year, reflecting a 4.5% decrease in
patient days, partially offset by a 0.7% increase in revenue per
patient day. As the country has started to reopen and lift
restrictions, certain services with a shorter length of stay have
shown recent improvement with same facility patient days declining
3.4% in June and 2.1% in July. U.K. same facility EBITDA margin was
14.3% for the second quarter of 2020.
Debbie Osteen, Chief Executive Officer of Acadia Healthcare
Company, remarked, “Our financial and operating results for the
second quarter highlighted the ongoing need for our services in the
U.S. and the U.K. While our volumes declined in the early part of
the quarter when many stay-at-home orders were implemented across
the U.S. and U.K., we experienced greater patient admissions across
all of our service lines as the quarter progressed, restrictions
eased, and our patients sought the treatments they need. We are
extremely proud of the dedicated efforts of Acadia’s employees
across our operations who work hard to support our patients and
provide quality care, while taking all recommended precautions to
keep everyone in our facilities safe.
“We believe the ongoing mental and emotional toll caused by
continuing economic and societal concerns will further increase the
already strong demand for mental health and substance use
treatments we provide in the U.S. and U.K. We continue to make the
necessary investments to serve our patients’ needs through bed
expansion opportunities and additional service offerings. During
the first half of 2020, we added 106 beds to our U.S. operations.
In mid-July, we announced the opening of our new 144-bed behavioral
health facility, Tower Behavioral Health, in Pennsylvania with our
joint venture partner, Tower Health,” added Osteen.
Cash and Liquidity
Acadia’s balance sheet remains strong with ample liquidity and
capital to invest in and grow its business. As of June 30, 2020,
the Company had $212 million in cash and cash equivalents, which
includes approximately $87 million received during the second
quarter from the CARES Act. CARES Act benefits include $45 million
of Medicare Advanced Payments, which the Company expects to repay
over a three-month period from August to November 2020, and $20
million of provider relief fund distributions. Additionally, the
Company has full availability under its $500 million revolving
credit facility.
On June 24, 2020, the Company improved its debt maturity profile
through the issuance of $450 million of 5.500% senior notes due
2028. The net proceeds from the offering, together with cash on
hand, were used to redeem in full its outstanding 6.125% Senior
Notes due 2021 and 5.125% Senior Notes due 2022, and to pay related
fees and expenses.
Looking Ahead
Osteen added, “We believe there will continue to be a
significant need for our services as the associated challenges
brought on by the pandemic continue to affect everyone,
particularly the more vulnerable and at-risk populations served by
Acadia. We are equally mindful of the critical need to ensure the
health and safety of everyone in our facilities by continuing to
follow strict protocol measures throughout our operations. We
believe Acadia is well positioned to meet the expected demand for
mental health and substance use conditions. We will continue to
deliver the highest quality of patient care, extend our market
reach, and advance our market leadership as a behavioral healthcare
facilities operator.”
Acadia will hold a conference call to discuss its second quarter
financial results at 9:00 a.m. Eastern Time on Wednesday, August 5,
2020. 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
19, 2020.
About Acadia
Acadia is a leading provider of behavioral healthcare services.
As of June 30, 2020, Acadia operated a network of 589 behavioral
healthcare facilities with approximately 18,200 beds in 40 states,
the United Kingdom and Puerto Rico. 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 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) the impact of the COVID-19 pandemic, including, without
limitation, disruption to the U.S. and U.K. economies and financial
markets; reduced admissions and patient volumes; increased costs
relating to labor, supply chain and other expenditures; and
difficulty in collecting patient accounts receivable due to
increases in the unemployment rate and the number of underinsured
and uninsured patients; (ii) potential difficulties operating our
business in light of political and economic instability in the U.K.
and globally relating to the U.K.’s departure from the European
Union; (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 efforts to sell
its U.K. operations may not result in any definitive transaction or
enhance stockholder value; (v) potential difficulties in
successfully integrating the operations of acquired facilities or
realizing the expected benefits and synergies of our acquisitions,
joint ventures and de novo transactions; (vi) Acadia’s ability to
add beds, expand services, enhance marketing programs and improve
efficiencies at its facilities; (vii) potential reductions in
payments received by Acadia from government and third-party payors;
(viii) the occurrence of patient incidents, governmental
investigations and adverse regulatory actions, which could
adversely affect the price of our common stock and result in
substantial payments and incremental regulatory burdens; (ix) the
risk that Acadia may not generate sufficient cash from operations
to service its debt and meet its working capital and capital
expenditure requirements, as well as risks associated with
disruptions in the financial markets and financial institutions due
to the COVID-19 pandemic; and (x) 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 June
30,
Six Months Ended June
30,
2020
2019
2020
2019
(In thousands, except per
share amounts)
Revenue
$
750,311
$
789,362
1,533,121
$
1,549,979
Salaries, wages and benefits (including equity-based
compensation expense of $5,808, $4,182, $10,787
and $10,283, respectively)
427,603
430,219
867,919
859,798
Professional fees
58,614
58,429
121,914
115,436
Supplies
30,124
30,914
62,095
60,871
Rents and leases
20,827
20,419
41,651
40,726
Other operating expenses
92,600
94,677
191,129
188,542
Other income
(18,070
)
-
(18,070
)
-
Depreciation and amortization
41,445
41,077
83,125
81,657
Interest expense, net
38,726
48,610
81,511
96,740
Debt extinguishment costs
3,271
-
3,271
-
Transaction-related expenses
5,241
5,212
8,790
9,533
Total expenses
700,381
729,557
1,443,335
1,453,303
Income before income taxes
49,930
59,805
89,786
96,676
Provision for income taxes
8,216
11,604
14,005
18,964
Net income
41,714
48,201
75,781
77,712
Net income attributable to noncontrolling interests
(635
)
(61
)
(1,239
)
(101
)
Net income attributable to Acadia Healthcare Company, Inc.
$
41,079
$
48,140
$
74,542
$
77,611
Earnings per share attributable to Acadia Healthcare
Company, Inc. stockholders: Basic
$
0.47
$
0.55
$
0.85
$
0.89
Diluted
$
0.46
$
0.55
$
0.84
$
0.88
Weighted-average shares outstanding: Basic
87,872
87,618
87,818
87,562
Diluted
88,608
87,837
88,228
87,770
Acadia Healthcare Company, Inc. Condensed
Consolidated Balance Sheets (Unaudited)
June 30,
December 31,
2020
2019
(In thousands)
ASSETS Current assets: Cash and cash equivalents
$
211,939
$
124,192
Accounts receivable, net
325,507
339,775
Other current assets
73,495
78,244
Total current assets
610,941
542,211
Property and equipment, net
3,160,784
3,224,034
Goodwill
2,425,372
2,449,131
Intangible assets, net
89,047
90,357
Deferred tax assets
3,274
3,339
Operating lease right-of-use assets
475,262
501,837
Other assets
68,548
68,233
Total assets
$
6,833,228
$
6,879,142
LIABILITIES AND EQUITY Current liabilities:
Current portion of long-term debt
$
48,465
$
43,679
Accounts payable
118,799
127,045
Accrued salaries and benefits
119,939
122,552
Current portion of operating lease liabilities
30,038
29,140
Other accrued liabilities
210,123
141,160
Total current liabilities
527,364
463,576
Long-term debt
3,078,445
3,105,420
Deferred tax liabilities
90,688
71,860
Operating lease liabilities
474,218
502,252
Derivative instrument liabilities
8,683
68,915
Other liabilities
116,553
128,587
Total liabilities
4,295,951
4,340,610
Redeemable noncontrolling interests
33,939
33,151
Equity: Common stock
879
877
Additional paid-in capital
2,567,050
2,557,642
Accumulated other comprehensive loss
(500,879
)
(414,884
)
Retained earnings
436,288
361,746
Total equity
2,503,338
2,505,381
Total liabilities and equity
$
6,833,228
$
6,879,142
Acadia Healthcare Company, Inc. Condensed
Consolidated Statements of Cash Flows (Unaudited)
Six Months Ended June
30,
2020
2019
(In thousands)
Operating activities: Net income
$
75,781
$
77,712
Adjustments to reconcile net income to net cash provided by
operating activities: Depreciation and amortization
83,125
81,657
Amortization of debt issuance costs
6,382
5,887
Equity-based compensation expense
10,787
10,283
Deferred income taxes
22,045
(205
)
Debt extinguishment costs
3,271
-
Other
(1,152
)
2,395
Change in operating assets and liabilities: Accounts receivable,
net
11,066
(27,669
)
Other current assets
(8,238
)
(10,591
)
Other assets
2,823
661
Accounts payable and other accrued liabilities
40,923
(11,060
)
Accrued salaries and benefits
(794
)
(3,232
)
Other liabilities
18,925
2,848
Net cash provided by operating activities
264,944
128,686
Investing activities: Cash paid for acquisitions, net
of cash acquired
-
(44,900
)
Cash paid for capital expenditures
(132,080
)
(139,128
)
Cash paid for real estate acquisitions
(4,415
)
(4,448
)
Proceeds from sale of property and equipment
1,412
11,649
Other
(4,849
)
(1,155
)
Net cash used in investing activities
(139,932
)
(177,982
)
Financing activities: Borrowings on long-term debt
450,000
-
Borrowings on revolving credit facility
100,000
76,573
Principal payments on revolving credit facility
(100,000
)
(11,573
)
Principal payments on long-term debt
(21,242
)
(16,492
)
Repayment of long-term debt
(450,000
)
-
Payment of debt issuance costs
(10,595
)
-
Common stock withheld for minimum statutory taxes, net
(1,377
)
(1,615
)
Distributions to noncontrolling interests
(451
)
-
Other
(2,344
)
(4,345
)
Net cash (used in) provided by financing activities
(36,009
)
42,548
Effect of exchange rate changes on cash
(1,256
)
(221
)
Net increase (decrease) in cash and cash equivalents
87,747
(6,969
)
Cash and cash equivalents at beginning of the period
124,192
50,510
Cash and cash equivalents at end of the period
$
211,939
$
43,541
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,
2020
2019
% Change
2020
2019
% Change
Same Facility Results (a,c) Revenue
$
727,003
$
753,527
-3.5
%
$
1,477,457
$
1,479,526
-0.1
%
Patient Days
1,129,064
1,155,857
-2.3
%
2,267,797
2,281,482
-0.6
%
Admissions
42,944
45,432
-5.5
%
87,616
89,898
-2.5
%
Average Length of Stay (b)
26.3
25.4
3.3
%
25.9
25.4
2.0
%
Revenue per Patient Day
$
644
$
652
-1.2
%
$
651
$
648
0.5
%
EBITDA margin
23.3
%
23.9
%
-60 bps
22.2
%
23.0
%
-80 bps U.S. Same Facility Results (a) Revenue
$
490,801
$
508,024
-3.4
%
$
991,952
$
989,434
0.3
%
Patient Days
648,518
652,861
-0.7
%
1,294,832
1,281,032
1.1
%
Admissions
41,158
43,143
-4.6
%
83,628
85,225
-1.9
%
Average Length of Stay (b)
15.8
15.1
4.1
%
15.5
15.0
3.0
%
Revenue per Patient Day
$
757
$
778
-2.7
%
$
766
$
772
-0.8
%
EBITDA margin
27.6
%
26.9
%
70 bps
25.9
%
26.0
%
-10 bps U.K. Same Facility Results (a,c) Revenue
$
236,202
$
245,503
-3.8
%
$
485,505
$
490,092
-0.9
%
Patient Days
480,546
502,996
-4.5
%
972,965
1,000,450
-2.7
%
Admissions
1,786
2,289
-22.0
%
3,988
4,673
-14.7
%
Average Length of Stay (b)
269.1
219.7
22.4
%
244.0
214.1
14.0
%
Revenue per Patient Day
$
492
$
488
0.7
%
$
499
$
490
1.9
%
EBITDA margin
14.3
%
17.8
%
-350 bps
14.6
%
17.0
%
-240 bps U.S. Facility Results Revenue
$
491,475
$
509,813
-3.6
%
$
1,000,692
$
997,773
0.3
%
Patient Days
648,518
656,456
-1.2
%
1,306,520
1,296,780
0.8
%
Admissions
41,158
43,153
-4.6
%
84,761
85,405
-0.8
%
Average Length of Stay (b)
15.8
15.2
3.6
%
15.4
15.2
1.5
%
Revenue per Patient Day
$
758
$
777
-2.4
%
$
766
$
769
-0.5
%
EBITDA margin
27.4
%
26.6
%
80 bps
25.5
%
25.5
%
0 bps U.K. Facility Results (c) Revenue
$
258,836
$
269,827
-4.1
%
$
532,429
$
537,886
-1.0
%
Patient Days
633,049
671,140
-5.7
%
1,290,318
1,335,533
-3.4
%
Admissions
2,048
2,653
-22.8
%
4,666
5,411
-13.8
%
Average Length of Stay (b)
309.1
253.0
22.2
%
276.5
246.8
12.0
%
Revenue per Patient Day
$
409
$
402
1.7
%
$
413
$
403
2.5
%
EBITDA margin
12.2
%
16.4
%
-420 bps
12.7
%
15.5
%
-280 bps Total Facility Results (c) Revenue
$
750,311
$
779,640
-3.8
%
$
1,533,121
$
1,535,659
-0.2
%
Patient Days
1,281,567
1,327,596
-3.5
%
2,596,838
2,632,313
-1.3
%
Admissions
43,206
45,806
-5.7
%
89,427
90,816
-1.5
%
Average Length of Stay (b)
29.7
29.0
2.3
%
29.0
29.0
0.2
%
Revenue per Patient Day
$
585
$
587
-0.3
%
$
590
$
583
1.2
%
EBITDA margin
22.2
%
23.0
%
-80 bps
21.1
%
22.0
%
-90 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, 2019 is adjusted to reflect the
foreign currency exchange rate for the comparable periods of 2020
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 and six months ended June 30,
2019 is 1.24 and 1.26, respectively.
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,
2020
2019
2020
2019
(in thousands)
Net income attributable to Acadia Healthcare Company, Inc.
$
41,079
$
48,140
$
74,542
$
77,611
Net income attributable to noncontrolling interests
635
61
1,239
101
Provision for income taxes
8,216
11,604
14,005
18,964
Interest expense, net
38,726
48,610
81,511
96,740
Depreciation and amortization
41,445
41,077
83,125
81,657
EBITDA
130,101
149,492
254,422
275,073
Adjustments: Equity-based compensation expense (a)
5,808
4,182
10,787
10,283
Transaction-related expenses (b)
5,241
5,212
8,790
9,533
Debt extinguishment costs (c)
3,271
-
3,271
-
Adjusted EBITDA
$
144,421
$
158,886
$
277,270
$
294,889
Adjusted EBITDA margin
19.2
%
20.1
%
18.1
%
19.0
%
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,
2020
2019
2020
2019
(in thousands, except per
share amounts)
Net income attributable to Acadia Healthcare Company, Inc.
$
41,079
$
48,140
$
74,542
$
77,611
Adjustments to income: Transaction-related expenses (b)
5,241
5,212
8,790
9,533
Debt extinguishment costs (c)
3,271
-
3,271
-
Income tax effect of adjustments to income (d)
(1,461
)
438
(1,805
)
987
Adjusted income attributable to Acadia Healthcare Company, Inc.
$
48,130
$
53,790
$
84,798
$
88,131
Weighted-average shares outstanding - diluted
88,608
87,837
88,228
87,770
Adjusted income attributable to Acadia Healthcare Company,
Inc. per diluted share
$
0.54
$
0.61
$
0.96
$
1.00
See footnotes on page 10.
Acadia Healthcare
Company, Inc. Footnotes
We have included certain financial measures in this press
release, including EBITDA, Adjusted EBITDA, Adjusted EBITDA margin
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 EBITDA margin as Adjusted EBITDA divided by
revenue. We define Adjusted income as net income adjusted for
transaction-related expenses, debt extinguishment costs and income
tax effect of adjustments to income.
EBITDA, Adjusted EBITDA, Adjusted EBITDA margin 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, Adjusted EBITDA margin 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, Adjusted EBITDA margin
and Adjusted income may not be comparable to similarly titled
measures of other companies. We have included information
concerning EBITDA, Adjusted EBITDA, Adjusted EBITDA margin 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, Adjusted EBITDA margin and
Adjusted income when reporting their results. Our presentation of
EBITDA, Adjusted EBITDA, Adjusted EBITDA margin and Adjusted income
should not be construed as an inference that our future results
will be unaffected by unusual or nonrecurring items.
(a) Represents the equity-based compensation expense of
Acadia.
(b) Represents transaction-related expenses incurred by Acadia
primarily related to termination, restructuring, U.K. sale,
strategic review, management transition and other similar
costs.
(c) Represents debt extinguishment costs recorded in connection
with the repayment of the 6.125% and 5.125% Senior Notes in June
2020.
(d) Represents the income tax effect of adjustments to income based
on tax rates of 16.7% and 17.2% for the three months ended June 30,
2020 and 2019, respectively, and 15.7% and 16.9% for the six months
ended June 30, 2020 and 2019, respectively.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20200804006004/en/
Gretchen Hommrich Director, Investor Relations (615)
861-6000
Acadia Healthcare (NASDAQ:ACHC)
Historical Stock Chart
From Mar 2024 to Apr 2024
Acadia Healthcare (NASDAQ:ACHC)
Historical Stock Chart
From Apr 2023 to Apr 2024