Same Facility Revenue Increases
11.5%
Affirms 2014 Adjusted Earnings Guidance in
Range of $1.44 to $1.46 per Diluted Share
Acadia Healthcare Company, Inc. (NASDAQ: ACHC) today announced
financial results for the second quarter and six months ended June
30, 2014. For the quarter, revenue was $213.8 million, up 20.5%
from $177.5 million for the second quarter of 2013. Income from
continuing operations was $22.5 million, or $0.43 per diluted
share, for the second quarter of 2014 compared with $12.3 million,
or $0.24 per diluted share, for the second quarter of 2013.
Adjusted income from continuing operations rose 26.8% to $16.6
million for the second quarter of 2014 from $13.1 million for the
second quarter of 2013, while adjusted income from continuing
operations per diluted share increased 23.1% to $0.32 from $0.26.
The adjusted results exclude a gain on foreign currency derivatives
of $13.7 million for the second quarter of 2014 related to Acadia’s
recent acquisition of Partnerships in Care (PiC), as well as
transaction-related expenses of $3.0 million and $1.4 million for
the second quarter of 2014 and 2013, respectively. A reconciliation
of all GAAP and non-GAAP financial results in this release is on
pages 8 and 9.
Revenue for the first six months of 2014 grew 22.6% to $415.2
million from $338.7 million for the comparable period in 2013.
Income from continuing operations was $35.5 million, or $0.69 per
diluted share, for the first half of 2014 compared with $16.3
million, or $0.33 per diluted share, for the first half of 2013.
Adjusted income from continuing operations was $30.6 million for
the first six months of 2014, up 29.3% from $23.7 million for the
first six months of 2013, while adjusted income from continuing
operations per diluted share increased 27.7% to $0.60 from $0.47.
The adjusted results exclude a gain on foreign currency derivatives
of $13.7 million for the first six months of 2014, debt
extinguishment costs of $9.4 million for the first six months of
2013 and transaction-related expenses of $4.6 million and $2.8
million for the first half of 2014 and 2013, respectively.
“We are pleased to report a continuation of strong operating and
financial results for Acadia’s second quarter,” said Joey Jacobs,
Chairman and Chief Executive Officer of Acadia. “Among the
quarter’s highlights, we produced growth in revenue and adjusted
income from continuing operations in excess of 20%, increased our
margins and achieved a double-digit increase in same facility
revenue. During the quarter, we also announced the acquisition of
U.K.-based PiC, the country’s second-largest independent behavioral
healthcare provider, which we completed on July 1, 2014. PiC adds
23 inpatient psychiatric facilities with over 1,200 licensed beds
to Acadia’s operations and, for 2013, produced revenue of
approximately $285 million and adjusted EBITDA of approximately $75
million. In addition to being substantially accretive to our
operations, we expect this transaction to position us well in the
U.K.’s independent behavioral health market, with meaningful
opportunities for organic growth and further acquisitions.
“Acadia’s revenue growth for the second quarter was primarily
due to the addition of approximately 675 licensed beds in the 12
months ended June 30, 2014, with 259 added through acquisitions and
416 beds added to existing facilities and two de novo facilities.
Our 11.5% growth in same facility revenue reflected the positive
impact of the beds added to existing facilities, as well as our
continuous efforts to generate additional revenues in each
facility. These beds helped produce an increase in patient days of
10.6%. Our second quarter revenue per patient day rose 0.8%.
“The strong operating leverage created by double-digit same
facility revenue growth, combined with increased operating
efficiencies, produced a 150 basis point increase in our same
facility EBITDA margin to 26.3%. The Company’s adjusted
consolidated EBITDA increased 20.5% to $44.7 million for the second
quarter of 2014.
“Acadia continues to evaluate potential acquisitions and develop
new beds in existing facilities. We are well positioned to finance
these growth strategies, with availability under our revolving
credit facility of approximately $175 million subsequent to the
completion of the PiC acquisition and with substantial net cash
flows from continuing operations, which totaled approximately $22
million for the second quarter. Including the impact of the PiC
transaction, our ratio of total net debt to trailing 12 months
adjusted EBITDA is approximately 4.2, compared with 4.2 at the end
of the first quarter of 2014.”
Acadia today affirmed its guidance for 2014 adjusted earnings
per diluted share in a range of $1.44 to $1.46, which was recently
revised from the previous range of $1.26 to $1.29 to account for
the accretive impact of the PiC transaction on the second half of
2014. 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 second quarter
financial results at 9:00 a.m. Eastern Time on Wednesday, July
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 August 12, 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 acquired facilities, including the PiC
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
occurrence of patient incidents, which could adversely affect the
price of our common stock and result in incremental regulatory
burdens and governmental investigations; (v) 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 (vi) 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 75 behavioral healthcare
facilities with more than 5,600 licensed beds in 24 states, the
United Kingdom 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 June 30, Six
Months Ended June 30, 2014 2013 2014
2013 (in thousands, except per share amounts)
Revenue before provision for doubtful accounts $ 220,664 $ 182,951
$ 426,783 $ 348,656 Provision for doubtful accounts (6,861 )
(5,457 ) (11,562 ) (9,949 ) Revenue 213,803
177,494 415,221 338,707
Salaries, wages and benefits (including
equity-based compensation expense of $2,406, $1,812, $4,170 and
$2,413, respectively)
122,473 100,764 240,048 195,115 Professional fees 10,891 9,324
21,273 18,338 Supplies 10,596 9,613 20,660 18,211 Rents and leases
2,889 2,394 5,658 4,721 Other operating expenses 24,646 20,096
47,756 37,079 Depreciation and amortization 5,935 4,212 11,371
7,834 Interest expense, net 9,730 9,445 19,437 18,207 Debt
extinguishment costs - - - 9,350 Gain on foreign currency
derivatives (13,735 ) - (13,735 ) - Transaction-related expenses
3,016 1,355 4,595
2,829 Total expenses 176,441 157,203
357,063 311,684 Income from
continuing operations before income taxes 37,362 20,291 58,158
27,023 Provision for income taxes 14,905 8,020
22,680 10,698 Income from
continuing operations 22,457 12,271 35,478 16,325 (Loss) income
from discontinued operations, net of income taxes (6 )
(74 ) 31 (390 ) Net income $ 22,451
$ 12,197 $ 35,509 $ 15,935 Basic
earnings per share: Income from continuing operations $ 0.43 $ 0.24
$ 0.70 $ 0.33 (Loss) income from discontinued operations -
- - (0.01 ) Net income $
0.43 $ 0.24 $ 0.70 $ 0.32
Diluted earnings per share: Income from continuing operations $
0.43 $ 0.24 $ 0.69 $ 0.33 (Loss) income from discontinued
operations - - -
(0.01 ) Net income $ 0.43 $ 0.24 $ 0.69 $ 0.32
Weighted-average shares outstanding: Basic 51,616
50,009 50,872 49,961 Diluted 51,819 50,282 51,174 50,196
Acadia Healthcare Company, Inc. Condensed
Consolidated Balance Sheets (Unaudited) June
30, December 31, 2014 2013 (In
thousands) ASSETS Current assets: Cash and cash
equivalents $ 277,744 $ 4,569 Accounts receivable, net of allowance
for doubtful accounts of $19,894 and $18,345, respectively 110,904
95,885 Deferred tax assets 12,756 15,703 Other current assets
48,192 28,969 Total current assets 449,596 145,126
Property and equipment, net 419,386 370,109 Goodwill 665,695
661,549 Intangible assets, net 20,852 20,568 Deferred tax assets -
noncurrent 4,227 - Other assets 32,796 27,307 Total
assets $ 1,592,552 $ 1,224,659
LIABILITIES AND
EQUITY Current liabilities: Current portion of long-term debt $
11,445 $ 15,195 Accounts payable 31,515 36,026 Accrued salaries and
benefits 39,445 37,721 Other accrued liabilities 20,260
25,748 Total current liabilities 102,665 114,690 Long-term
debt 555,812 601,941 Deferred tax liabilities - noncurrent 17,894
7,971 Other liabilities 20,959 19,347 Total
liabilities 697,330 743,949 Equity: Common stock 592 501 Additional
paid-in capital 840,719 461,807 Retained earnings 53,911
18,402 Total equity 895,222 480,710 Total
liabilities and equity $ 1,592,552 $ 1,224,659
Acadia Healthcare Company, Inc. Condensed Consolidated
Statements of Cash Flows (Unaudited) Six
Months Ended June 30, 2014 2013 (In
thousands) Operating activities: Net income $
35,509 $ 15,935
Adjustments to reconcile net income to net cash
provided by continuing operating activities: Depreciation and
amortization 11,371 7,834 Amortization of debt issuance costs 1,334
1,110 Equity-based compensation expense 4,170 2,413 Deferred income
tax expense 9,097 5,392 (Income) loss from discontinued operations,
net of taxes (31 ) 390 Debt extinguishment costs - 9,350 Gain on
foreign currency derivatives (13,735 ) - Other 25 14 Change in
operating assets and liabilities, net of effect of acquisitions:
Accounts receivable, net (15,303 ) (10,557 ) Other current assets
(4,792 ) 107 Other assets (578 ) (807 ) Accounts payable and other
accrued liabilities (1,300 ) 1,038 Accrued salaries and benefits
1,782 (3,074 ) Other liabilities 1,701 458
Net cash provided by continuing operating activities 29,250
29,603 Net cash used in discontinued operating activities
(11 ) (358 ) Net cash provided by operating activities
29,239 29,245
Investing activities: Cash paid for
acquisitions, net of cash acquired (10,000 ) (121,731 ) Cash paid
for capital expenditures (43,323 ) (29,709 ) Cash paid for real
estate acquisitions (18,326 ) (3,959 ) Other (439 )
(554 ) Net cash used in investing activities (72,088 ) (155,953 )
Financing activities: Borrowings on long-term debt
7,500 150,000 Borrowings on revolving credit facility 59,500 8,000
Principal payments on revolving credit facility (113,000 ) (8,000 )
Principal payments on long-term debt (3,750 ) (1,875 ) Repayment of
long-term debt - (52,500 ) Payment of debt issuance costs (5,810 )
(4,307 ) Payment of premium on note redemption - (6,759 ) Issuance
of common stock, net 374,336 - Common stock withheld for minimum
statutory taxes, net (2,981 ) (1,062 ) Excess tax benefit from
equity awards 3,479 1,211 Cash paid for contingent consideration
(3,250 ) - Net cash provided by financing
activities 316,024 84,708 Net
increase (decrease) in cash and cash equivalents 273,175 (42,000 )
Cash and cash equivalents at beginning of the period 4,569
49,399 Cash and cash equivalents at end of the
period $ 277,744 $ 7,399
Effect of
acquisitions: Assets acquired, excluding cash $ 10,500 $
146,062 Liabilities assumed - (12,647 ) Prior year deposits paid
for acquisitions (500 ) (11,684 ) Cash paid for
acquisitions, net of cash acquired $ 10,000 $ 121,731
Acadia Healthcare Company, Inc.
Operating Statistics (Unaudited) (Revenue in
thousands) Three Months Ended June 30, Six
Months Ended June 30, 2014 2013 % Change
2014 2013 % Change Same Facility Results
Revenue $ 196,981 $ 176,743 11.5% $ 373,391 $ 337,297 10.7% Patient
Days 294,156 265,914 10.6% 558,778 512,190 9.1% Admissions 16,472
14,197 16.0% 30,568 27,066 12.9% Average Length of Stay (a) 17.9
18.7 -4.7% 18.3 18.9 -3.4% Revenue per Patient Day $ 670 $
665 0.8% $ 668 $ 659 1.5% EBITDA margin 26.3% 24.8% 150 bps 26.1%
24.0% 210 bps Total Facility Results Revenue $ 212,834 $
176,743 20.4% $ 413,398 $ 337,297 22.6% Patient Days 315,710
265,914 18.7% 612,767 512,190 19.6% Admissions 18,908 14,197 33.2%
36,826 27,066 36.1% Average Length of Stay (a) 16.7 18.7 -10.9%
16.6 18.9 -12.1% Revenue per Patient Day $ 674 $ 665 1.4% $
675 $ 659 2.4% EBITDA margin 24.9% 24.8% 10 bps 24.3% 24.0% 30 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
June 30, Six Months Ended June 30, 2014
2013 2014 2013 (in thousands)
Net income $ 22,451 $ 12,197 $ 35,509 $ 15,935 (Income) loss from
discontinued operations 6 74 (31 ) 390 Provision for income taxes
14,905 8,020 22,680 10,698 Interest expense, net 9,730 9,445 19,437
18,207 Depreciation and amortization 5,935
4,212 11,371 7,834 EBITDA 53,027 33,948 88,966
53,064 Adjustments: Equity-based compensation expense (a)
2,406 1,812 4,170 2,413 Debt extinguishment costs (b) - - - 9,350
Gain on foreign currency derivatives (c) (13,735 ) - (13,735 ) -
Transaction-related expenses (d) 3,016 1,355
4,595 2,829 Adjusted EBITDA $ 44,714 $
37,115 $ 83,996 $ 67,656 See footnotes on page 10.
Acadia Healthcare Company,
Inc. Reconciliation of Adjusted Income from Continuing
Operations to Income from Continuing Operations
(Unaudited) Three Months Ended June 30, Six
Months Ended June 30, 2014 2013 2014
2013 (in thousands, except per share amounts)
Income from continuing operations $ 22,457 $ 12,271 $ 35,478 $
16,325 Provision for income taxes 14,905 8,020
22,680 10,698 Income from
continuing operations before income taxes 37,362 20,291 58,158
27,023 Adjustments to income from continuing operations:
Debt extinguishment costs (b) - - - 9,350 Gain on foreign currency
derivatives (c) (13,735 ) - (13,735 ) - Transaction-related
expenses (d) 3,016 1,355 4,595 2,829
Income tax provision reflecting tax effect
of adjustments to income from continuing operations (e)
(10,047 ) (8,554 ) (18,406 ) (15,520 )
Adjusted income from continuing operations $ 16,596 $ 13,092 $
30,612 $ 23,682 Weighted-average shares outstanding -
diluted 51,819 50,282 51,174 50,196 Adjusted income from
continuing operations per diluted share $ 0.32 $ 0.26
$ 0.60 $ 0.47 See footnotes on page 10.
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, debt extinguishment costs, gain on foreign currency
derivatives and transaction-related expenses. 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 the
change in fair value of foreign currency derivatives purchased by
Acadia related to its acquisition of Partnerships in Care on July
1, 2014. (d) Represents transaction-related expenses
incurred by Acadia related to acquisitions. (e) Represents
the income tax provision adjusted to reflect the tax effect of the
adjustments to income from continuing operations based on effective
tax rates excluding the impact of non-deductible
transaction-related expenses.
Acadia Healthcare Company, Inc.Brent Turner,
615-861-6000President
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