Revenue More Than Doubles to $453.7
Million
Increases Guidance for 2015 Adjusted
Earnings per Diluted Share to New Range of $2.15 to $2.18
Acadia Healthcare Company, Inc. (NASDAQ: ACHC) today announced
financial results for the second quarter and six months ended June
30, 2015. For the quarter, revenue increased 112.2% to $453.7
million from $213.8 million for the second quarter of 2014. Income
from continuing operations was $33.8 million, or $0.49 per diluted
share, for the second quarter of 2015 compared with $22.5 million,
or $0.43 per diluted share, for the second quarter of 2014.
Adjusted income from continuing operations increased 137.8% to
$39.5 million for the second quarter of 2015 from $16.6 million for
the second quarter of 2014, while adjusted income from continuing
operations per diluted share increased 78.1% to $0.57 from $0.32.
The adjusted results exclude transaction-related expenses of $7.2
million and $3.0 million for the second quarter of 2015 and 2014,
respectively, a $1.0 million loss on foreign currency derivatives
for the second quarter of 2015 and a $13.7 million gain on foreign
currency derivatives for the second quarter of 2014. Weighted
average shares outstanding increased 32.6% for the second quarter
of 2015 from the second quarter of 2014, primarily due to the
issuance of common stock in June 2014 and February and May 2015,
the net proceeds of which have primarily been used to fund
acquisitions. A reconciliation of all non-GAAP financial results in
this release appears on pages 8 and 9.
For the first six months of 2015, revenue grew 97.4% to $819.4
million from $415.2 million for the first six months of 2014.
Income from continuing operations for the first half of 2015 was
$48.4 million, or $0.74 per diluted share, compared with $35.5
million, or $0.69 per diluted share, for the same period in 2014.
Adjusted income from continuing operations increased 117.5% to
$66.6 million for the first six months of 2015 from $30.6 million
for the first six months of 2014, while adjusted income from
continuing operations per diluted share increased 68.3% to $1.01
from $0.60. The adjusted results exclude transaction-related
expenses of $25.6 million and $4.6 million for the first half of
2015 and 2014, respectively, a $0.9 million loss on foreign
currency derivatives for the first half of 2015 and a $13.7 million
gain on foreign currency derivatives for the first half of 2014.
Weighted average shares outstanding increased 28.5% for the first
six months of 2015 compared with the same period in 2014.
“For the second quarter of 2015, Acadia’s organic growth and
acquisition strategies continued to drive outstanding financial
results,” said Joey Jacobs, Chairman and Chief Executive Officer of
Acadia. “While the July 1, 2014, acquisition of Partnerships in
Care (PiC) and the February 11, 2015, acquisition of CRC Health
Group (CRC) were the primary drivers of our growth for the latest
quarter, we completed a total of 11 acquisitions in the 12 months
ended June 30, 2015, adding 82 facilities with more than 4,300
inpatient beds and 88 comprehensive treatment centers.
“During the second quarter, we contributed to these totals with
five acquisitions in the United Kingdom, which added 21 facilities
and over 500 beds to PiC’s operations. As a result, PiC celebrated
its first year anniversary as part of Acadia with 45 facilities and
over 1,800 beds compared with 23 facilities and approximately 1,200
beds at the time of the acquisition.
“In addition to the accretive impact of acquisitions, our second
quarter financial results benefited from strong organic growth that
drove revenues and margin improvement. This growth primarily
reflected the addition of approximately 400 beds for the 12 months
ended June 30, 2015, to existing facilities and one de novo
facility, including approximately 250 new beds added in the first
half of 2015.
“Second quarter same facility revenue increased 9.0%, due
largely to new beds added to the same facility base over the
previous 12 months, as well as to our continuing initiatives to
build revenue at each facility. Same facility patient days
increased 7.4% compared with the second quarter last year, and same
facility revenue per patient day rose 1.5%. The increased operating
leverage generated by significant same facility revenue growth,
combined with our efforts to improve facility productivity and
efficiency, produced a 120 basis point increase in same facility
EBITDA margin to 26.1% for the quarter. Acadia’s consolidated
adjusted EBITDA for the second quarter of 2015 increased 136.6% to
$105.8 million from $44.7 million for the second quarter of 2014,
while our consolidated adjusted EBITDA margin increased 240 basis
points to 23.3%.
“Since the end of the second quarter, we have completed an
additional transaction in the U.K., acquiring a 15-bed inpatient
facility, which is our first U.K. facility focused on addiction
treatment. In addition, we completed the acquisition of our first
inpatient behavioral health facility in Philadelphia, Pennsylvania,
which operates approximately 150 beds. We believe Acadia is well
positioned to continue executing its acquisition and organic growth
strategies, with $72.5 million of cash flow from continuing
operations for the second quarter of 2015 and full availability
under our $300 million revolving credit facility.”
Acadia today increased its guidance for 2015 adjusted earnings
per diluted share to a range of $2.15 to $2.18 from the previous
range of $2.12 to $2.15. 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,
August 5, 2015. 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 21, 2015.
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
and CRC 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 225 behavioral healthcare
facilities with approximately 9,200 beds in 37 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 Income (Unaudited)
Three Months Ended June 30, Six
Months Ended June 30, 2015 2014 2015
2014 (In thousands, except per share amounts)
Revenue before provision for doubtful accounts $ 461,798 $ 220,664
$ 835,956 $ 426,783 Provision for doubtful accounts (8,138 )
(6,861 ) (16,513 ) (11,562 ) Revenue 453,660
213,803 819,443 415,221
Salaries, wages and benefits (including
equity-based compensation expense of $5,355, $2,406, $9,249 and
$4,170, respectively)
243,302 122,473 449,173 240,048 Professional fees 30,029 10,891
52,456 21,273 Supplies 20,542 10,596 36,796 20,660 Rents and leases
8,211 2,889 14,097 5,658 Other operating expenses 51,128 24,646
91,655 47,756 Depreciation and amortization 14,926 5,935 28,030
11,371 Interest expense, net 28,049 9,730 50,195 19,437 Loss (gain)
on foreign currency derivatives 961 (13,735 ) 908 (13,735 )
Transaction-related expenses 7,157 3,016
25,573 4,595 Total expenses
404,305 176,441 748,883
357,063 Income from continuing operations before
income taxes 49,355 37,362 70,560 58,158 Provision for income taxes
15,512 14,905 22,125
22,680 Income from continuing operations 33,843
22,457 48,435 35,478 Income (loss) from discontinued operations,
net of income taxes 1 (6 ) 3
31 Net income $ 33,844 $ 22,451 $
48,438 $ 35,509 Basic earnings per share:
Income from continuing operations $ 0.50 $ 0.43 $ 0.74 $ 0.70
Income (loss) from discontinued operations - -
- - Net income $ 0.50 $
0.43 $ 0.74 $ 0.70 Diluted earnings per
share: Income from continuing operations $ 0.49 $ 0.43 $ 0.74 $
0.69 Income (loss) from discontinued operations -
- - - Net income $ 0.49
$ 0.43 $ 0.74 $ 0.69
Weighted-average shares outstanding: Basic 68,296 51,616 65,429
50,872 Diluted 68,735 51,819 65,782 51,174
Acadia
Healthcare Company, Inc. Condensed Consolidated Balance
Sheets (Unaudited) June 30,
December 31, 2015 2014 (In thousands)
ASSETS Current assets: Cash and cash equivalents $
34,572 $ 94,040
Accounts receivable, net of allowance for
doubtful accounts of $26,233 and $22,449, respectively
182,315 118,378 Deferred tax assets 38,693 20,155 Other current
assets 70,325 41,570 Total current
assets 325,905 274,143 Property and equipment, net 1,455,390
1,069,700 Goodwill 1,946,028 802,986 Intangible assets, net 58,514
21,636 Deferred tax assets - noncurrent 33,966 13,141 Other assets
106,582 41,984 Total assets $ 3,926,385
$ 2,223,590
LIABILITIES AND
EQUITY Current liabilities: Current portion of long-term debt $
38,652 $ 26,965 Accounts payable 58,714 48,696 Accrued salaries and
benefits 77,545 59,317 Other accrued liabilities 68,197
30,956 Total current liabilities 243,108
165,934 Long-term debt 1,914,555 1,069,305 Deferred tax liabilities
- noncurrent 20,200 63,880 Other liabilities 82,218
43,506 Total liabilities 2,260,081 1,342,625 Equity:
Common stock 706 592 Additional paid-in capital 1,567,304 847,301
Accumulated other comprehensive loss (51,586 ) (68,370 ) Retained
earnings 149,880 101,442 Total equity
1,666,304 880,965 Total liabilities and
equity $ 3,926,385 $ 2,223,590
Acadia Healthcare Company, Inc. Condensed Consolidated
Statements of Cash Flows (Unaudited)
Six Months Ended June 30, 2015 2014 (In
thousands) Operating activities: Net income $ 48,438 $
35,509
Adjustments to reconcile net income to net cash provided
by continuing operating activities: Depreciation and
amortization 28,030 11,371 Amortization of debt issuance costs
3,218 1,334 Equity-based compensation expense 9,249 4,170 Deferred
income tax expense 24,682 9,097 Income from discontinued
operations, net of taxes (3 ) (31 ) Loss (gain) on foreign currency
derivatives 908 (13,735 ) Other 692 25 Change in operating assets
and liabilities, net of effect of acquisitions: Accounts
receivable, net (10,442 ) (15,303 ) Other current assets (13,048 )
(4,792 ) Other assets (1,218 ) (578 ) Accounts payable and other
accrued liabilities (4,313 ) (1,300 ) Accrued salaries and benefits
(225 ) 1,782 Other liabilities 4,619 1,701
Net cash provided by continuing operating activities 90,587
29,250 Net cash provided by (used in) discontinued operating
activities 554 (11 ) Net cash provided by
operating activities 91,141 29,239
Investing
activities: Cash paid for acquisitions, net of cash acquired
(286,734 ) (10,000 ) Cash paid for capital expenditures (122,035 )
(43,323 ) Cash paid for real estate acquisitions (3,428 ) (18,326 )
Settlement of foreign currency derivatives (908 ) - Other
(481 ) (439 ) Net cash used in investing activities (413,586
) (72,088 )
Financing activities: Borrowings on
long-term debt 875,000 7,500 Borrowings on revolving credit
facility 180,000 59,500 Principal payments on revolving credit
facility (180,000 ) (113,000 ) Principal payments on long-term debt
(15,875 ) (3,750 ) Repayment of assumed CRC debt (904,467 ) -
Payment of debt issuance costs (22,775 ) (5,810 ) Issuance of
common stock, net 331,530 374,336 Common stock withheld for minimum
statutory taxes, net (7,826 ) (2,981 ) Excess tax benefit from
equity awards 6,327 3,479 Cash paid for contingent consideration -
(3,250 ) Other (150 ) - Net cash provided by
financing activities 261,764 316,024
Effect of exchange rate changes on cash 1,213
- Net (decrease) increase in cash and
cash equivalents (59,468 ) 273,175 Cash and cash equivalents at
beginning of the period 94,040 4,569
Cash and cash equivalents at end of the period $ 34,572 $
277,744
Effect of acquisitions: Assets
acquired, excluding cash $ 1,636,164 $ 10,500 Liabilities assumed
(1,009,944 ) - Issuance of common stock in connection with
acquisition (380,210 ) - Deposits paid for acquisitions 40,724 -
Prior year deposits paid for acquisitions -
(500 ) Cash paid for acquisitions, net of cash acquired $ 286,734
$ 10,000
Acadia Healthcare Company,
Inc. Operating Statistics (Unaudited) (Revenue
in thousands)
Three Months Ended June 30, Six Months Ended June
30, 2015 2014 % Change 2015
2014 % Change Same Facility Results Revenue $ 228,622
$ 209,815 9.0% $ 444,147 $ 407,182 9.1% Patient Days 333,264
310,336 7.4% 655,709 602,096 8.9% Admissions 21,369 18,408 16.1%
42,082 35,828 17.5% Average Length of Stay (b) 15.6 16.9 -7.5% 15.6
16.8 -7.3% Revenue per Patient Day $ 686 $ 676 1.5% $ 677 $ 676
0.2% EBITDA margin 26.1 % 24.9 % 120 bps 25.3 % 24.3 % 100 bps
U.S. Facility Results Revenue $ 366,886 $ 212,834 72.4% $
657,393 $ 413,398 59.0% Patient Days 517,423 315,710 63.9% 941,836
612,767 53.7% Admissions 30,121 18,908 59.3% 55,565 36,826 50.9%
Average Length of Stay (b) 17.2 16.7 2.9% 17.0 16.6 1.9% Revenue
per Patient Day $ 709 $ 674 5.2% $ 698 $ 675 3.5% EBITDA margin
27.9 % 24.9 % 300 bps 27.2 % 24.3 % 290 bps U.K. Facility
Results Revenue $ 84,927 $ 158,242 Patient Days 125,085 228,920
Admissions 336 585 Average Length of Stay (b) 372.3 391.3 Revenue
per Patient Day $ 679 $ 691 EBITDA margin 24.0 % 24.8 %
Total Facility Results Revenue $ 451,813 $ 212,834 112.3% $ 815,635
$ 413,398 97.3% Patient Days 642,508 315,710 103.5% 1,170,756
612,767 91.1% Admissions 30,457 18,908 61.1% 56,150 36,826 52.5%
Average Length of Stay (b) 21.1 16.7 26.3% 20.9 16.6 25.3% Revenue
per Patient Day $ 703 $ 674 4.3% $ 697 $ 675 3.3% EBITDA margin
27.2 % 24.9 % 230 bps 26.7 % 24.3 % 240 bps (a)
Same-facility results for the three and six months ended June 30,
2015 and 2014 exclude one facility that is converting its
residential treatment beds to acute psychiatric treatment beds. The
transition is expected to be completed in the fourth quarter of
2015. (b) 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, 2015
2014 2015 2014 (in thousands)
Net income $ 33,844 $ 22,451 $ 48,438 $ 35,509 Income from
discontinued operations (1 ) 6 (3 ) (31 ) Provision for income
taxes 15,512 14,905 22,125 22,680 Interest expense, net 28,049
9,730 50,195 19,437 Depreciation and amortization 14,926
5,935 28,030 11,371
EBITDA 92,330 53,027 148,785 88,966 Adjustments:
Equity-based compensation expense (a) 5,355 2,406 9,249 4,170
Loss (gain) on foreign currency
derivatives (b)
961 (13,735 ) 908 (13,735 ) Transaction-related expenses (c)
7,157 3,016 25,573 4,595
Adjusted EBITDA $ 105,803 $ 44,714 $ 184,515
$ 83,996 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, 2015 2014 2015 2014
(in thousands, except per share amounts) Income from
continuing operations $ 33,843 $ 22,457 $ 48,435 $ 35,478 Provision
for income taxes 15,512 14,905
22,125 22,680 Income from continuing
operations before income taxes 49,355 37,362 70,560 58,158
Adjustments to income from continuing operations: Loss (gain) on
foreign currency derivatives (b) 961 (13,735 ) 908 (13,735 )
Transaction-related expenses (c) 7,157 3,016 25,573 4,595
Income tax provision reflecting tax effect
of adjustments to income from continuing operations (d)
(18,006 ) (10,047 ) (30,470 ) (18,406 )
Adjusted income from continuing operations $ 39,467 $ 16,596 $
66,571 $ 30,612 Weighted-average shares outstanding -
diluted 68,735 51,819 65,782 51,174 Adjusted income from
continuing operations per diluted share $ 0.57 $ 0.32
$ 1.01 $ 0.60 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 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 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 the change in fair value of foreign currency
derivatives purchased by Acadia related to acquisitions in the U.K.
in April and June 2015 and July 2014. (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 tax rates of 31.3% and 37.7%
for the three months ended June 30, 2015 and 2014, respectively,
and 31.4% and 37.6% for the six months ended June 30, 2015 and
2014, respectively.
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version on businesswire.com: http://www.businesswire.com/news/home/20150804006784/en/
Acadia Healthcare Company, Inc.Brent Turner,
615-861-6000President
Acadia Healthcare (NASDAQ:ACHC)
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