Affirms 2014 Adjusted Earnings Guidance in
Range of $1.26 to $1.29 per Diluted Share
Acadia Healthcare Company, Inc. (NASDAQ: ACHC) today announced
financial results for the first quarter ended March 31, 2014.
Revenue increased 24.9% for the quarter to $201.4 million from
$161.2 million for the first quarter of 2013. Income from
continuing operations was $13.0 million, or $0.26 per diluted
share, for the first quarter of 2014 compared with $4.1 million, or
$0.08 per diluted share, for the first quarter of 2013. Adjusted
income from continuing operations rose 32.5% to $14.0 million for
the first quarter of 2014 from $10.6 million for the first quarter
of 2013, while adjusted income from continuing operations per
diluted share increased 33.3% to $0.28 from $0.21 for the
comparable prior-year quarter. The adjusted results exclude
transaction-related expenses of $1.6 million and $1.5 million for
the first quarter of 2014 and 2013, respectively, and debt
extinguishment costs of $9.4 million for the first quarter of 2013.
A reconciliation of all GAAP and non-GAAP financial results in this
release is on pages 7 and 8.
“Acadia produced strong operating and financial results for the
first quarter of 2014 compared with the first quarter last year,”
remarked Joey Jacobs, Chairman and Chief Executive Officer of
Acadia. “Our revenue growth primarily reflected the addition of 784
licensed beds to the Company’s operations in the 12 months ended
March 31, 2014. Nearly 500 of these beds came to Acadia through the
acquisition of six inpatient facilities during this 12-month
period, including the acquisition of a 68-bed acute inpatient
psychiatric facility in Riverside, California, in January 2014. The
remainder of the bed additions reflected organic bed expansion
primarily at existing facilities, including 122 beds added in the
first quarter of 2014, as well as through the opening of two de
novo facilities.
“The Company’s same facility revenue increased 9.9% for the
first quarter of 2014 compared with the same quarter in 2013,
largely due to the new beds added to the same facility base,
complemented by our initiatives to generate additional revenues in
each facility. Contributing to same facility revenue growth, our
patient days increased 7.4% for the first quarter and revenue per
patient day increased 2.3%. Our strong same facility revenue growth
produced significant operating leverage for the quarter, which,
combined with increased operating efficiencies, drove a 290 basis
point expansion in our same facility EBITDA margin to 26.0% for the
first quarter this year from 23.1% for the first quarter last year.
Our adjusted consolidated EBITDA increased 28.6% for the first
quarter of 2014 to $39.3 million, or 19.5% of revenue, from $30.5
million, or 18.9% of revenue, for the first quarter of 2013.
“We remain well positioned to finance our 2014 growth
strategies. At the end of the first quarter, our availability under
our revolving credit facility was approximately $206 million, and
our ratio of total net debt to trailing 12 months adjusted EBITDA
was 4.2. We also expect to continue to generate significant net
cash from continuing operations for 2014, and our net cash flow
from continuing operations for the first quarter was $7.3
million.”
Acadia today affirmed its guidance for 2014 adjusted earnings
per diluted share in a range of $1.26 to $1.29. The Company’s
guidance does not include the impact of any future acquisitions or
transaction-related expenses.
Acadia will hold a conference call to discuss its first quarter
financial results at 9:00 a.m. Eastern Time on Wednesday,
April 30, 2014. 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 13, 2014.
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) Acadia’s ability to complete acquisitions and successfully
integrate the operations of the acquired facilities; (ii) Acadia’s
ability to add beds, expand services, enhance marketing programs
and improve efficiencies at its facilities; (iii) potential
reductions in payments received by Acadia from the government and
third-party payors; (iv) 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 (v)
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 inpatient behavioral healthcare
services. Acadia operates a network of 52 behavioral healthcare
facilities with more than 4,300 licensed beds in 24 states and
Puerto Rico. Acadia provides psychiatric and chemical dependency
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, 2014 2013 (in
thousands, except per share amounts) Revenue before
provision for doubtful accounts $ 206,119 $ 165,705 Provision for
doubtful accounts (4,701 ) (4,492 ) Revenue 201,418
161,213
Salaries, wages and benefits (including
equity-based compensation expense of $1,764 and $601,
respectively)
117,575 94,351 Professional fees 10,382 9,014 Supplies 10,064 8,598
Rents and leases 2,769 2,327 Other operating expenses 23,110 16,983
Depreciation and amortization 5,436 3,622 Interest expense, net
9,707 8,762 Debt extinguishment costs - 9,350 Transaction-related
expenses 1,579 1,474 Total expenses
180,622 154,481 Income from continuing
operations before income taxes 20,796 6,732 Provision for income
taxes 7,775 2,678 Income from
continuing operations 13,021 4,054 Income (loss) from discontinued
operations, net of income taxes 37 (316 ) Net
income $ 13,058 $ 3,738 Basic earnings per
share: Income from continuing operations $ 0.26 $ 0.08 Income
(loss) from discontinued operations - (0.01 )
Net income $ 0.26 $ 0.07 Diluted earnings per
share: Income from continuing operations $ 0.26 $ 0.08 Income
(loss) from discontinued operations - (0.01 )
Net income $ 0.26 $ 0.07 Weighted-average
shares outstanding: Basic 50,120 49,911 Diluted 50,486 50,250
Acadia Healthcare Company, Inc.
Condensed Consolidated Balance Sheets (Unaudited)
March 31, December 31, 2014
2013 (In thousands) ASSETS Current
assets: Cash and cash equivalents $ 7,243 $ 4,569
Accounts receivable, net of allowance for
doubtful accounts of $17,689 and $18,345, respectively
104,585 95,885 Deferred tax assets 17,029 15,703 Other current
assets 28,180 28,969 Total current assets 157,037
145,126 Property and equipment, net 403,366 370,109 Goodwill
665,421 661,549 Intangible assets, net 20,730 20,568 Deferred tax
assets - noncurrent 4,325 - Other assets 32,066
27,307 Total assets $ 1,282,945 $ 1,224,659
LIABILITIES AND EQUITY Current liabilities: Current portion
of long-term debt $ 9,570 $ 15,195 Accounts payable 28,405 36,026
Accrued salaries and benefits 32,257 37,721 Other accrued
liabilities 27,673 25,748 Total current liabilities
97,905 114,690 Long-term debt 653,626 601,941 Deferred tax
liabilities - noncurrent 15,399 7,971 Other liabilities
19,865 19,347 Total liabilities 786,795 743,949 Equity:
Common stock 502 501 Additional paid-in capital 464,188 461,807
Retained earnings 31,460 18,402 Total equity
496,150 480,710 Total liabilities and equity $ 1,282,945 $
1,224,659
Acadia Healthcare Company,
Inc. Condensed Consolidated Statements of Cash Flows
(Unaudited) Three Months Ended March 31,
2014 2013 (In thousands) Operating
activities: Net income $ 13,058 $ 3,738
Adjustments to reconcile net income to
net cash provided by continuing operating activities:
Depreciation and amortization 5,436 3,622 Amortization of debt
issuance costs 644 540 Equity-based compensation expense 1,764 601
Deferred income tax expense 2,231 2,455 (Income) loss from
discontinued operations, net of taxes (37 ) 316 Debt extinguishment
costs - 9,350 Other 13 15 Change in operating assets and
liabilities, net of effect of acquisitions: Accounts receivable,
net (8,694 ) (9,522 ) Other current assets 952 (1,072 ) Other
assets (1,576 ) (850 ) Accounts payable and other accrued
liabilities (1,839 ) (997 ) Accrued salaries and benefits (5,407 )
(6,717 ) Other liabilities 770 (271 ) Net cash
provided by continuing operating activities 7,315 1,208 Net cash
provided by (used in) discontinued operating activities 31
(267 ) Net cash provided by operating activities
7,346 941
Investing activities: Cash paid for
acquisitions, net of cash acquired (10,000 ) (22,375 ) Cash paid
for capital expenditures (21,649 ) (12,764 ) Cash paid for real
estate acquisitions (16,097 ) - Other (178 ) (133 )
Net cash used in investing activities (47,924 ) (35,272 )
Financing activities: Borrowings on long-term debt 7,500
150,000 Borrowings on revolving credit facility 40,500 - Principal
payments on long-term debt (1,875 ) (1,875 ) Repayment of long-term
debt - (52,500 ) Payment of debt issuance costs (3,491 ) (4,153 )
Payment of premium on note redemption - (6,759 ) Common stock
withheld for minimum statutory taxes, net (2,112 ) (641 ) Excess
tax benefit from equity awards 2,730 635
Net cash provided by financing activities 43,252
84,707 Net increase in cash and cash
equivalents 2,674 50,376 Cash and cash equivalents at beginning of
the period 4,569 49,399 Cash and cash
equivalents at end of the period $ 7,243 $ 99,775
Effect of acquisitions: Assets acquired, excluding
cash $ 10,500 $ 43,330 Liabilities assumed - (9,271 ) Prior year
deposits paid for acquisitions (500 ) (11,684 ) Cash
paid for acquisitions, net of cash acquired $ 10,000 $
22,375
Acadia Healthcare Company, Inc.
Operating Statistics (Unaudited) (Revenue in
thousands) Three Months Ended March
31, 2014 2013 % Change Same Facility
Results Revenue $ 176,411 $ 160,554 9.9 % Patient Days 264,622
246,276 7.4 % Admissions 14,096 12,869 9.5 % Average Length of Stay
(a) 18.8 19.1 -1.9 % Revenue per Patient Day $ 667 $ 652 2.3
% EBITDA margin 26.0 % 23.1 % 290 bps Total Facility Results
Revenue $ 200,564 $ 160,554 24.9 % Patient Days 297,057 246,276
20.6 % Admissions 17,918 12,869 39.2 % Average Length of Stay (a)
16.6 19.1 -13.4 % Revenue per Patient Day $ 675 $ 652 3.6 %
EBITDA margin 23.7 % 23.1 % 60 bps (a) Average length
of stay is defined as patient days divided by admissions.
Acadia Healthcare Company, Inc.
Reconciliation of Net Income to Adjusted EBITDA
(Unaudited) Three Months Ended March 31,
2014 2013 (in thousands) Net income $
13,058 $ 3,738 (Income) loss from discontinued operations (37 ) 316
Provision for income taxes 7,775 2,678 Interest expense, net 9,707
8,762 Depreciation and amortization 5,436
3,622 EBITDA 35,939 19,116 Adjustments: Equity-based
compensation expense (a) 1,764 601 Debt extinguishment costs (b) -
9,350 Transaction-related expenses (c) 1,579
1,474 Adjusted EBITDA $ 39,282 $ 30,541 See footnotes
on page 9.
Acadia Healthcare Company,
Inc. Reconciliation of Adjusted Income from Continuing
Operations to Income from Continuing Operations
(Unaudited) Three Months Ended March 31,
2014 2013 (in thousands, except per share
amounts) Income from continuing operations $ 13,021 $
4,054 Provision for income taxes 7,775 2,678
Income from continuing operations before income taxes 20,796
6,732 Adjustments to income from continuing operations: Debt
extinguishment costs (b) - 9,350 Transaction-related expenses (c)
1,579 1,474
Income tax provision reflecting tax effect
of adjustments to income from continuing operations (d)
(8,366 ) (6,984 ) Adjusted income from continuing
operations $ 14,009 $ 10,572 Weighted-average shares
outstanding - diluted 50,486 50,250 Adjusted income from
continuing operations per diluted share $ 0.28 $ 0.21
See footnotes on page 9.
Footnotes
We have included certain financial measures in this press
release, including EBITDA, Adjusted EBITDA and Adjusted income from
continuing operations, 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 loss (income) from
discontinued operations, net interest expense, income tax provision
and depreciation and amortization. We define Adjusted EBITDA as
EBITDA adjusted for equity-based compensation expense,
transaction-related expenses and debt extinguishment costs.
EBITDA, Adjusted EBITDA and Adjusted income from continuing
operations 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 from continuing operations 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 from continuing operations may not be comparable to
similarly titled measures of other companies. We have included
information concerning EBITDA, Adjusted EBITDA and Adjusted income
from continuing operations 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 from continuing operations when reporting their
results. Our presentation of EBITDA, Adjusted EBITDA and Adjusted
income from continuing operations 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 debt
extinguishment costs related to the repayment of $52.5 million of
the Company's 12.875% Senior Notes due 2018 on March 12, 2013,
including a prepayment premium of $6.8 million and the write-off of
$2.6 million of deferred financing costs. (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
from continuing operations based on effective tax rates.
Acadia Healthcare Company, Inc.Brent Turner,
615-861-6000President
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