U.S. Same Facility Revenue Grows
6.6%
Provides 2018 Financial Guidance
Acadia Healthcare Company, Inc. (NASDAQ: ACHC) today announced
financial results for the fourth quarter and year ended December
31, 2017. Revenue increased 3.1% for the quarter to $724.5 million
from $702.9 million for the fourth quarter of 2016. Net income
attributable to Acadia stockholders was $69.6 million, or $0.80 per
diluted share, for the fourth quarter of 2017 compared with $41.8
million, or $0.48 per diluted share, for the fourth quarter of
2016. Results for the fourth quarter of 2017 include a non-cash
decrease in the provision for income taxes of $20.2 million from
the impact of the Tax Cuts and Jobs Act of 2017 on net deferred tax
liabilities. This estimate will continue to be evaluated as further
information becomes available. Adjusted income from continuing
operations attributable to Acadia stockholders per diluted share
(“adjusted EPS”) was $0.61 for the fourth quarter of 2017 compared
with $0.59 for the fourth quarter of 2016, excluding the impact of
a tax benefit of $20.2 million due to the Tax Cuts and Jobs Act of
2017; transaction-related expenses of $5.4 million and $14.8
million for the fourth quarter of 2017 and 2016, respectfully; and
debt extinguishment costs of $0.8 million and loss on divestiture
of $4.1 million for the fourth quarter of 2016. A reconciliation of
all non-GAAP financial results in this release appears beginning on
page 8.
Joey Jacobs, Chairman and Chief Executive Officer of Acadia,
commented, “We are pleased with our results for the fourth quarter
of 2017. We note that the results for the fourth quarter of 2016
include revenue of approximately $30 million and adjusted EPS of
approximately $0.05 from 22 facilities in the U.K. that were
divested on November 30, 2016.”
Same facility revenue for Acadia’s U.S. operations increased
6.6% for the fourth quarter of 2017 from the fourth quarter of
2016, with a 3.1% increase in patient days and a 3.3% increase in
revenue per patient day. U.S. same facility EBITDA margin was 26.3%
for the latest quarter, unchanged from the fourth quarter of
2016.
Same facility revenue for Acadia’s U.K. operations increased
3.7% for the fourth quarter of 2017 compared with the fourth
quarter of 2016, with a 1.5% increase in patient days and a 2.2%
increase in revenue per patient day. U.K. same facility EBITDA
margin was 21.1% for the fourth quarter compared with 22.3% for the
fourth quarter of 2016. Mr. Jacobs added, “The fourth quarter
results for our operations in the U.K. met our revised
expectations. Our results still reflect a lower census than normal
and continued pressure from higher agency labor expense, primarily
for nurses and other clinical staff, due to tightening in the U.K.
labor market.”
Total same facility revenue for the fourth quarter of 2017
increased 5.6%, with a 2.4% increase in patient days and a 3.1%
increase in revenue per patient day. Total same facility EBITDA
margin was 24.5% for the fourth quarter of 2017 compared with 24.9%
for the fourth quarter of 2016. The growth in same facility revenue
reflected the addition of 750 beds to existing and new facilities
in 2017, of which 398 beds opened in the fourth quarter. The
Company expects to add more than 800 beds to existing and new
facilities in 2018.
Acadia’s consolidated adjusted EBITDA for the fourth quarter of
2017 was $153.5 million, or 21.2% of revenue, compared with $149.5
million, or 21.3% of revenue, for the fourth quarter of 2016.
Acadia today established its financial guidance for 2018 and the
first quarter of 2018, as follows:
- Revenue for 2018 in a range of $3.04
billion to $3.08 billion;
- Adjusted EBITDA for 2018 in a range of
$637 million to $644 million;
- Adjusted earnings per diluted share for
2018 in a range of $2.42 to $2.48;
- Adjusted earnings per diluted share for
the first quarter of 2018 in a range of $0.47 to $0.49; and
- An exchange rate of $1.35 per British
Pound Sterling and a tax rate of approximately 21%.
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 (loss)
attributable to noncontrolling interests, (benefit from) 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,
debt extinguishment costs, loss on divestiture and gain on foreign
currency derivatives. Adjusted income is defined as net income
adjusted for transaction-related expenses, tax reform impact, debt
extinguishment costs, loss on divestiture, gain on foreign currency
derivatives and income tax effect of adjustments to income.
Acadia will hold a conference call to discuss its fourth quarter
financial results at 9:00 a.m. Eastern Time on Thursday,
February 22, 2018. 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 March 8, 2018.
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) potential difficulties operating our business in light of
political and economic instability in the U.K. and globally
following the referendum in the U.K. on June 23, 2016, in which
voters approved an exit from the European Union, or Brexit; (ii)
the impact of fluctuations in foreign exchange rates, including the
devaluation of the British Pound Sterling (GBP) relative to the
U.S. Dollar (USD) following the Brexit vote; (iii) Acadia’s ability
to complete acquisitions and successfully integrate the operations
of acquired facilities; (iv) Acadia’s ability to add beds, expand
services, enhance marketing programs and improve efficiencies at
its facilities; (v) potential reductions in payments received by
Acadia from government and third-party payors; (vi) 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; (vii) 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 (viii) 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 provider of behavioral healthcare services. At
December 31, 2017, Acadia operated a network of 582 behavioral
healthcare facilities with approximately 17,800 beds in 39 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 Operations (Unaudited)
Three Months Ended December 31, Year
Ended December 31, 2017 2016 2017
2016 (In thousands, except per share amounts)
Revenue before provision for doubtful accounts $ 733,538 $ 713,784
$ 2,877,234 $ 2,852,823 Provision for doubtful accounts
(9,026 ) (10,896 ) (40,918 ) (41,909 ) Revenue
724,512 702,888 2,836,316 2,810,914
Salaries, wages and benefits (including
equity-based compensation expense of $4,460, $7,356, $23,467 and
$28,345, respectively)
390,582 384,297 1,536,160 1,541,854 Professional fees 53,451 47,516
196,223 185,486 Supplies 29,439 28,976 114,439 117,425 Rents and
leases 19,320 18,335 76,775 73,348 Other operating expenses 82,666
81,606 331,827 312,556 Depreciation and amortization 37,754 33,958
143,010 135,103 Interest expense, net 45,230 46,010 176,007 181,325
Debt extinguishment costs - 842 810 4,253 Loss on divestiture -
4,070 - 178,809 Gain on foreign currency derivatives - - - (523 )
Transaction-related expenses 5,431 14,840
24,267 48,323 Total expenses
663,873 660,450 2,599,518
2,777,959 Income before income taxes 60,639 42,438
236,798 32,955 (Benefit from) provision for income taxes
(9,050 ) 1,012 37,209 28,779
Net income 69,689 41,426 199,589 4,176 Net (income) loss
attributable to noncontrolling interests (60 ) 392
246 1,967 Net income
attributable to Acadia Healthcare Company, Inc. $ 69,629 $
41,818 $ 199,835 $ 6,143
Earnings per share attributable to Acadia
Healthcare Company, Inc. stockholders:
Basic $ 0.80 $ 0.48 $ 2.30 $ 0.07
Diluted $ 0.80 $ 0.48 $ 2.30 $ 0.07
Weighted-average shares outstanding: Basic 87,052 86,668
86,948 85,701 Diluted 87,166 86,890 87,060 85,972
Acadia Healthcare Company, Inc. Condensed
Consolidated Balance Sheets (Unaudited)
December 31, 2017 2016 (In thousands)
ASSETS Current assets: Cash and cash equivalents $
67,290 $ 57,063
Accounts receivable, net of allowance for
doubtful accounts of $39,803 and $38,916, respectively
296,925 263,327 Other current assets 107,335
107,537 Total current assets 471,550 427,927 Property and
equipment, net 3,048,130 2,703,695 Goodwill 2,751,174 2,681,188
Intangible assets, net 87,348 83,310 Deferred tax assets -
noncurrent 3,731 3,780 Derivative instruments 12,997 73,509 Other
assets 49,572 51,317 Total assets $
6,424,502 $ 6,024,726
LIABILITIES
AND EQUITY Current liabilities: Current portion of long-term
debt $ 34,830 $ 34,805 Accounts payable 102,299 80,034 Accrued
salaries and benefits 99,047 105,068 Other accrued liabilities
141,213 122,958 Total current
liabilities 377,389 342,865 Long-term debt 3,205,058 3,253,004
Deferred tax liabilities - noncurrent 80,333 78,520 Other
liabilities 166,434 164,859 Total
liabilities 3,829,214 3,839,248 Redeemable noncontrolling interests
22,417 17,754 Equity: Common stock 871 867 Additional paid-in
capital 2,517,545 2,496,288 Accumulated other comprehensive loss
(374,118 ) (549,570 ) Retained earnings 428,573
220,139 Total equity 2,572,871
2,167,724 Total liabilities and equity $ 6,424,502 $
6,024,726
Acadia Healthcare Company,
Inc. Condensed Consolidated Statements of Cash Flows
(Unaudited) Year Ended December 31,
2017 2016 (In thousands) Operating
activities: Net income $ 199,589 $ 4,176
Adjustments to
reconcile net income to net cash provided by continuing operating
activities: Depreciation and amortization 143,010 135,103
Amortization of debt issuance costs 9,855 10,324 Equity-based
compensation expense 23,467 28,345 Deferred income tax expense
31,372 28,647 Debt extinguishment costs 810 4,253 Loss on
divestiture - 178,809 Gain on foreign currency derivatives - (523 )
Other 11,412 4,715 Change in operating assets and liabilities, net
of effect of acquisitions: Accounts receivable, net (28,570 )
(15,718 ) Other current assets 20,808 (20,648 ) Other assets (3,176
) (4,354 ) Accounts payable and other accrued liabilities (10,113 )
22,693 Accrued salaries and benefits (8,988 ) (8,572 ) Other
liabilities 11,794 4,484 Net cash
provided by continuing operating activities 401,270 371,734 Net
cash used in discontinued operating activities (1,693 )
(10,256 ) Net cash provided by operating activities 399,577
361,478
Investing activities: Cash paid for
acquisitions, net of cash acquired (18,191 ) (683,455 ) Cash paid
for capital expenditures (274,177 ) (307,472 ) Cash paid for real
estate acquisitions (41,057 ) (40,757 ) Settlement of foreign
currency derivatives - 523 Cash received on divestitures - 373,266
Other (3,101 ) (2,470 ) Net cash used in investing
activities (336,526 ) (660,365 )
Financing
activities: Borrowings on long-term debt - 1,480,000 Borrowings
on revolving credit facility - 179,000 Principal payments on
revolving credit facility - (337,000 ) Principal payments on
long-term debt (34,805 ) (49,941 ) Repayment of assumed debt -
(1,348,389 ) Repayment of long-term debt (22,500 ) (200,594 )
Payment of debt issuance costs - (36,649 ) Issuance of common
stock, net - 685,097 Common stock withheld for minimum statutory
taxes, net (3,455 ) (8,846 ) Other 686 (3,837
) Net cash (used in) provided by financing activities
(60,074 ) 358,841 Effect of exchange rate
changes on cash 7,250 (14,106 ) Net
increase in cash and cash equivalents 10,227 45,848 Cash and cash
equivalents at beginning of the period 57,063
11,215 Cash and cash equivalents at end of the period $
67,290 $ 57,063
Effect of acquisitions:
Assets acquired, excluding cash $ 19,649 $ 2,516,880 Liabilities
assumed (1,458 ) (1,616,543 ) Issuance of common stock in
connection with acquisition - (216,882 ) Cash
paid for acquisitions, net of cash acquired $ 18,191 $
683,455
Acadia Healthcare Company, Inc.
Operating Statistics (Unaudited, Revenue in
thousands)
Three Months Ended December 31, Year Ended December
31, 2017 2016 % Change 2017
2016 % Change Same Facility Results (a,d) Revenue $
693,619 $ 657,087 5.6% $ 2,602,315 $ 2,464,289 5.6% Patient Days
1,103,891 1,078,217 2.4% 4,173,465 4,027,440 3.6% Admissions 39,120
37,031 5.6% 156,437 147,172 6.3% Average Length of Stay (b) 28.2
29.1 -3.1% 26.7 27.4 -2.5% Revenue per Patient Day $ 628 $ 609 3.1%
$ 624 $ 612 1.9% EBITDA margin 24.5% 24.9% -40 bps 25.3% 25.6% -30
bps U.S. Same Facility Results (a) Revenue $ 451,958 $
424,092 6.6% $ 1,774,461 $ 1,665,344 6.6% Patient Days 607,850
589,457 3.1% 2,429,171 2,318,598 4.8% Admissions 36,868 35,029 5.2%
148,611 139,886 6.2% Average Length of Stay (b) 16.5 16.8 -2.0%
16.3 16.6 -1.4% Revenue per Patient Day $ 744 $ 719 3.3% $ 730 $
718 1.7% EBITDA margin 26.3% 26.3% 0 bps 27.0% 27.1% -10 bps
U.K. Same Facility Results (a,d) Revenue $ 241,661 $ 232,995 3.7% $
827,854 $ 798,945 3.6% Patient Days 496,041 488,760 1.5% 1,744,294
1,708,842 2.1% Admissions 2,252 2,002 12.5% 7,826 7,286 7.4%
Average Length of Stay (b) 220.3 244.1 -9.8% 222.9 234.5 -5.0%
Revenue per Patient Day $ 487 $ 477 2.2% $ 475 $ 468 1.5% EBITDA
margin 21.1% 22.3% -120 bps 21.7% 22.5% -80 bps
U.S. Facility Results (c) Revenue $ 454,529 $ 426,811 6.5% $
1,809,844 $ 1,683,776 7.5% Patient Days 608,353 589,656 3.2%
2,461,512 2,321,908 6.0% Admissions 36,952 35,070 5.4% 151,467
140,691 7.7% Average Length of Stay (b) 16.5 16.8 -2.1% 16.3 16.5
-1.5% Revenue per Patient Day $ 747 $ 724 3.2% $ 735 $ 725 1.4%
EBITDA margin 25.5% 25.7% -20 bps 26.3% 26.4% -10 bps U.K.
Facility Results (c,d) Revenue $ 269,983 $ 261,393 3.3% $ 1,026,472
$ 917,841 11.8% Patient Days 686,708 691,560 -0.7% 2,735,132
2,476,178 10.5% Admissions 2,554 2,306 10.8% 10,222 8,765 16.6%
Average Length of Stay (b) 268.9 299.9 -10.3% 267.6 282.5 -5.3%
Revenue per Patient Day $ 393 $ 378 4.0% $ 375 $ 371 1.2% EBITDA
margin 19.1% 20.6% -150 bps 19.3% 20.8% -150 bps Total
Facility Results (c,d) Revenue $ 724,512 $ 688,204 5.3% $ 2,836,316
$ 2,601,617 9.0% Patient Days 1,295,061 1,281,216 1.1% 5,196,644
4,798,086 8.3% Admissions 39,506 37,376 5.7% 161,689 149,456 8.2%
Average Length of Stay (b) 32.8 34.3 -4.4% 32.1 32.1 0.1% Revenue
per Patient Day $ 559 $ 537 4.2% $ 546 $ 542 0.7% EBITDA margin
23.1% 23.8% -70 bps 23.8% 24.4% -60 bps (a) Same-facility
results for the periods presented exclude the 22 facilities in the
U.K. sold on November 30, 2016, the elderly care division of our
U.K. operations and other closed services. (b) Average length of
stay is defined as patient days divided by admissions. (c) Total
Facility results for the periods presented exclude the 22
facilities in the U.K. sold on November 30, 2016 and other closed
services. (d) Revenue and revenue per patient day for the three
months and year ended December 31, 2016 is adjusted to reflect the
foreign currency exchange rate for the comparable periods of 2017
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 months and year ended December
31, 2016 is 1.33 and 1.29, respectively.
Acadia
Healthcare Company, Inc. Reconciliation of Net Income
Attributable to Acadia Healthcare Company, Inc. to Adjusted
EBITDA (Unaudited) Three
Months Ended December 31, Year Ended December 31,
2017 2016 2017 2016 (in
thousands) Net income attributable to Acadia Healthcare
Company, Inc. $ 69,629 $ 41,818 $ 199,835 $ 6,143 Net income (loss)
attributable to noncontrolling interests 60 (392 ) (246 ) (1,967 )
(Benefit from) provision for income taxes (9,050 ) 1,012 37,209
28,779 Interest expense, net 45,230 46,010 176,007 181,325
Depreciation and amortization 37,754 33,958
143,010 135,103 EBITDA 143,623
122,406 555,815 349,383 Adjustments: Equity-based
compensation expense (a) 4,460 7,356 23,467 28,345
Transaction-related expenses (b) 5,431 14,840 24,267 48,323 Debt
extinguishment costs (c) - 842 810 4,253 Loss on divestiture (d) -
4,070 - 178,809 Gain on foreign currency derivatives (e) -
- - (523 ) Adjusted
EBITDA $ 153,514 $ 149,514 $ 604,359 $ 608,590
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 December 31, Year Ended December 31, 2017
2016 2017 2016 (in thousands, except per
share amounts) Net income attributable to Acadia
Healthcare Company, Inc. $ 69,629 $ 41,818 $ 199,835 $ 6,143
Adjustments to income: Transaction-related expenses (b) 5,431
14,840 24,267 48,323 Tax reform impact (f) (20,188 ) - (20,188 ) -
Debt extinguishment costs (c) - 842 810 4,253 Loss on divestiture
(d) - 4,070 - 178,809 Gain on foreign currency derivatives (e) - -
- (523 ) Income tax effect of adjustments to income (g)
(1,978 ) (10,229 ) (4,492 ) (26,760 ) Adjusted
income attributable to Acadia Healthcare Company, Inc. $ 52,894
$ 51,341 $ 200,232 $ 210,245
Weighted-average shares outstanding - diluted 87,166 86,890 87,060
85,972
Adjusted income attributable to Acadia
Healthcare Company, Inc. per diluted share
$ 0.61 $ 0.59 $ 2.30 $ 2.45 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
(loss) attributable to noncontrolling interests, (benefit from)
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,
debt extinguishment costs, loss on divestiture and gain on foreign
currency derivatives. We define Adjusted income as net income
adjusted for transaction-related expenses, tax reform impact, debt
extinguishment costs, loss on divestiture, gain on foreign currency
derivatives 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 related to acquisitions and integration
efforts. (c) Represents debt extinguishment costs recorded
in connection with the Amended and Restated Credit Agreement,
including the discount and write-off of deferred financing costs.
(d) As part of divestitures in the U.K. and U.S., the loss
on divestiture includes an allocation of goodwill to the disposal
groups of approximately $106.9 million, loss on the sale of
properties of approximately $45.0 million, transaction-related
expenses of approximately $26.8 million and write-off of intangible
assets of approximately $0.1 million. (e) Represents the
change in fair value of foreign currency derivatives purchased by
Acadia related to (i) acquisitions in the U.K. and (ii) certain
transfers of cash between the U.S. and U.K. under the Company’s
cash management and foreign currency risk management programs.
(f) Represents the Company’s estimate of the one-time
remeasurement of deferred taxes pursuant to the enactment of the
Tax Cuts and Jobs Act. The estimate of the tax reform impact may be
revised as further information is evaluated. (g) Represents
the income tax effect of adjustments to income based on tax rates
of 19.87% and 17.96% for the three months ended December 31, 2017
and 2016, respectively, and 23.65% and 20.90% for the year ended
December 31, 2017 and 2016, respectively. The adjusted income tax
provision for the year ended December 31, 2017 excludes the impact
of adopting ASU 2016-09 "Improvements to Employee Share-Based
Payment Accounting” of approximately $1.7 million.
View source
version on businesswire.com: http://www.businesswire.com/news/home/20180221006190/en/
Acadia Healthcare Company, Inc.Gretchen Hommrich,
615-861-6000Director, Investor Relations
Acadia Healthcare (NASDAQ:ACHC)
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