Acadia Healthcare Company, Inc. (NASDAQ: ACHC) today announced
financial results for the first quarter ended March 31, 2022.
First Quarter Highlights
- Revenue totaled $616.7 million, an increase of 11.9% over the
first quarter of 2021
- Same facility revenue increased 8.6% compared to the first
quarter of 2021, including an increase in revenue per patient day
of 6.2% and an increase in patient days of 2.2%
- Net income attributable to Acadia totaled $60.8 million, or
$0.67 per diluted share, and adjusted income from continuing
operations attributable to Acadia stockholders totaled $61.2
million, or $0.67 per diluted share.
- Adjusted EBITDA totaled $135.5 million
- Cash flows from operating activities totaled $76.8 million
First Quarter Results
The Company reported revenue of $616.7 million for the first
quarter of 2022, compared with $551.2 million for the first quarter
of 2021. Adjusted EBITDA was $135.5 million for the first quarter
of 2022, compared with $119.5 million for the same period last
year.
Net income attributable to Acadia stockholders for the first
quarter of 2022 was $60.8 million, or $0.67 per diluted share.
Adjusted income from continuing operations attributable to Acadia
stockholders was $0.67 per diluted share for the first quarter of
2022. Adjustments to income include transaction-related expenses
and the income tax effect of adjustments to income. A
reconciliation of all non-GAAP financial results in this press
release begins on page 9.
For the first quarter of 2022, Acadia’s same facility revenue
increased 8.6% compared with the first quarter of 2021, including
an increase in revenue per patient day of 6.2% and an increase in
patient days of 2.2%.
Chris Hunter, Chief Executive Officer of Acadia Healthcare
Company, remarked, “Acadia produced solid financial and operating
results for the first quarter of 2022, marking a strong start to
the year. While we faced some early challenges in January related
to the surge of the Omicron variant of COVID-19, our operating
trends recovered with meaningful improvement in February and March.
Our facilities have managed well through each stage of the
pandemic, with strict protocols in place to ensure high standards
of safety for our patients with minimal disruptions to our
operations, all while navigating a tight labor environment. As
such, we successfully delivered on our key performance metrics in
the first quarter, demonstrating consistent execution of our
strategy. We have seen robust demand for our behavioral healthcare
services, and our dedicated team of employees and clinicians across
our operations have continued to meet this growing demand with high
quality patient care in a safe and effective manner.
Strategic Investments for Long-Term Growth
“In the first quarter of 2022, Acadia continued to move forward
and expand our market reach through four strategic pathways to
growth across our service lines. Our first pathway and best return
on investment is through facility expansions, where we have an
opportunity to utilize a facility’s current infrastructure and
leverage the existing cost structure. During the first quarter, we
added 28 beds to current facilities and expect to add approximately
300 beds in 2022.
“As the demand for behavioral healthcare services continues to
grow, our second pathway focuses on identifying underserved markets
to develop wholly owned de novo facilities that help address this
need. At the end of 2021, we completed the acquisition of several
currently non-operational facilities, including one adult hospital,
one children’s hospital and an outpatient facility, all located in
Chicago. We have commenced work on the improvements and expect to
open the 60-bed children’s hospital in June. The 101-bed adult
hospital and the outpatient facility are slated to begin operations
in 2023. In addition to the new Chicago facilities, we also expect
to open a de novo facility, Coachella Valley Behavioral Health, in
Indio, California, later this year.
“We also continued to expand our network of comprehensive
treatment centers (CTCs) to address the growing and critical need
for medication-assisted treatment for patients dealing with opioid
use disorder. We opened one new CTC in Virginia during the first
quarter. We have identified additional opportunities to reach more
markets that are underserved, and we plan to open at least six CTCs
in 2022 to support the high demand for effective treatment.
“A third important pathway for Acadia’s continued growth is
through joint venture partnerships with leading health systems
across the country. With our expertise as the leading pure-play
provider of behavioral healthcare services and our reputation for
quality care, Acadia is an attractive partner for leading health
systems who want to expand and improve behavioral healthcare
treatment options in their respective communities. We plan to open
a new facility in partnership with Covenant Health in Knoxville,
Tennessee, this summer. We also expect to commence operations in a
new facility in partnership with the Lutheran Health Network in Ft.
Wayne, Indiana, later in 2022. Working together with these
partners, we can combine our expertise and resources with a shared
commitment to expand access to quality care and behavioral health
treatment.
“For our fourth and final pathway we continue to look for
acquisition opportunities that meet the criteria of our disciplined
capital allocation framework. Acadia has a proven operating model,
and our strategy is to identify facilities and programs where we
can leverage our scale and expertise, make necessary investments
for expansion and add service offerings to further enhance the
continuum of care,” added Hunter.
Cash and Liquidity
Acadia’s balance sheet remains strong with ample liquidity and
capital to pursue its growth initiatives and continue to make
strategic investments in its business. As of March 31, 2022, the
Company had $140.4 million in cash and cash equivalents. During the
first quarter, the Company repaid $10 million on its senior secured
revolving credit facility, reducing the outstanding balance to $160
million as of March 31, 2022. The Company had $440 million
available under its $600 million revolving credit facility and its
net leverage ratio was approximately 2.3x as of March 31, 2022.
During the first quarter, the Company continued its repayment of
amounts received pursuant to the Medicare Accelerated and Advanced
Payment Program under the CARES Act. Of the $45 million of advanced
payments received in 2020, the Company repaid a total of $25
million in 2021 and made additional payments of $8 million in the
first quarter of 2022. The Company will continue to repay the
remaining balance throughout the rest of 2022. The Company will
also repay the remaining half of the approximately $39 million of
2020 payroll tax deferrals in the second half of 2022.
Financial Guidance
Acadia today affirmed its previously announced financial
guidance for 2022, as follows:
2022
Guidance Range
Revenue
$2.55 to $2.60 billion
Adjusted EBITDA
$575 to $610 million
Adjusted earnings per diluted share
$2.85 to $3.15
Interest Expense
$65 to $70 million
Tax rate
25% to 26%
Depreciation and amortization expense
$120 to $130 million
Stock compensation expense
Approximately $30 million
Operating cash flows, including $39
million
of CARES Act repayments
$350 to $400 million
Expansion capital expenditures
$290 to $340 million
Maintenance capital expenditures
Approximately $50 million
The Company’s guidance does not include the impact of any future
acquisitions, divestitures or transaction-related expenses.
Looking Ahead
Hunter added, “I am very proud to join Acadia as the Company’s
new Chief Executive Officer and am excited about the opportunities
ahead. With a strong first quarter performance, we have an
opportunity to build on our momentum and continue to extend our
market reach to more patients and communities. Above all, we are
unwavering in our commitment as a leader in addressing the critical
societal need in our country for behavioral healthcare services. It
is gratifying to see the growing recognition of mental health on
parity with other healthcare services and a greater public
acceptance for treatment. With the extraordinary economic and
societal challenges created by the COVID-19 pandemic, the need for
behavioral healthcare services is greater than ever. Acadia is well
positioned to meet the growing demand for our services with a
proven operating model, an expansive network of 238 facilities and
diversified service lines across the continuum of care. I look
forward to working with Acadia’s strong management team, committed
facility leaders, clinicians and 22,500 dedicated employees across
the country as we pursue a strategic direction that delivers
greater value for our patients, the communities we serve and our
stockholders.”
Conference Call
Acadia will hold a conference call to discuss its first quarter
financial results at 9:00 a.m. Eastern Time on Wednesday, May 4,
2022. 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 for 30
days.
About Acadia
Acadia is a leading provider of behavioral healthcare services
across the United States. As of March 31, 2022, Acadia operated a
network of 238 behavioral healthcare facilities with approximately
10,600 beds in 40 states and Puerto Rico. With more than 22,500
employees serving approximately 70,000 patients daily, Acadia is
the largest stand-alone behavioral health company in the U.S.
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 press 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 press 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. economy and financial markets;
reduced admissions and patient volumes; and increased costs
relating to labor, supply chain and other expenditures; (ii) the
impact of vaccine and other pandemic-related mandates imposed by
local, state and federal authorities; (iii) 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; (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,
governmental investigations, litigation and adverse regulatory
actions, which could adversely affect the price of our common stock
and result in substantial payments 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; (viii) potential
disruptions to our information technology systems or a
cybersecurity incident; and (ix) 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 March
31,
2022
2021
(In thousands, except per
share amounts)
Revenue
$
616,653
$
551,199
Salaries, wages and benefits (including equity-based
compensation expense of$7,925 and $7,034, respectively)
335,762
304,333
Professional fees
36,911
31,617
Supplies
23,699
21,322
Rents and leases
11,249
9,412
Other operating expenses
81,425
72,010
Depreciation and amortization
28,926
24,894
Interest expense, net
15,787
29,027
Debt extinguishment costs
—
24,650
Transaction-related expenses
3,582
4,610
Total expenses
537,341
521,875
Income from continuing operations before income taxes
79,312
29,324
Provision for income taxes
17,402
6,204
Income from continuing operations
61,910
23,120
Loss from discontinued operations, net of taxes
—
(12,641
)
Net income
61,910
10,479
Net income attributable to noncontrolling interests
(1,073
)
(762
)
Net income attributable to Acadia Healthcare Company, Inc.
$
60,837
$
9,717
Basic earnings per share attributable to Acadia Healthcare
Company, Inc. stockholders: Income from continuing operations
attributable to Acadia Healthcare Company, Inc.
$
0.68
$
0.25
Loss from discontinued operations
—
(0.14
)
Net income attributable to Acadia Healthcare Company, Inc.
$
0.68
$
0.11
Diluted earnings per share attributable to Acadia Healthcare
Company, Inc. stockholders: Income from continuing operations
attributable to Acadia Healthcare Company, Inc.
$
0.67
$
0.25
Loss from discontinued operations
—
(0.14
)
Net income attributable to Acadia Healthcare Company, Inc.
$
0.67
$
0.11
Weighted-average shares outstanding: Basic
89,258
88,242
Diluted
91,012
89,941
Acadia Healthcare Company, Inc. Condensed Consolidated
Balance Sheets (Unaudited)
March 31,
December 31,
2022
2021
(In thousands) ASSETS Current assets: Cash and
cash equivalents
$
140,367
$
133,813
Accounts receivable, net
299,022
281,332
Other current assets
90,710
79,886
Total current assets
530,099
495,031
Property and equipment, net
1,795,791
1,771,159
Goodwill
2,200,659
2,199,937
Intangible assets, net
70,319
70,145
Deferred tax assets
3,047
3,080
Operating lease right-of-use assets
139,264
133,761
Other assets
95,460
94,965
Total assets
$
4,834,639
$
4,768,078
LIABILITIES AND EQUITY Current liabilities:
Current portion of long-term debt
$
21,250
$
18,594
Accounts payable
104,209
98,575
Accrued salaries and benefits
138,092
137,845
Current portion of operating lease liabilities
25,170
23,348
Other accrued liabilities
122,030
126,499
Total current liabilities
410,751
404,861
Long-term debt
1,463,848
1,478,626
Deferred tax liabilities
77,604
74,368
Operating lease liabilities
120,560
116,841
Other liabilities
117,062
110,505
Total liabilities
2,189,825
2,185,201
Redeemable noncontrolling interests
70,304
65,388
Equity: Common stock
897
890
Additional paid-in capital
2,632,527
2,636,350
Accumulated deficit
(58,914
)
(119,751
)
Total equity
2,574,510
2,517,489
Total liabilities and equity
$
4,834,639
$
4,768,078
Acadia Healthcare Company, Inc. Condensed Consolidated
Statements of Cash Flows (Unaudited) Three
Months Ended March 31,
2022
2021
(In thousands) Operating activities: Net income
$
61,910
$
10,479
Adjustments to reconcile net income to net cash provided by
continuing operating activities: Depreciation and amortization
28,926
24,894
Amortization of debt issuance costs
808
1,646
Equity-based compensation expense
7,925
7,034
Deferred income taxes
3,269
3,962
Loss from discontinued operations, net of taxes
—
12,641
Debt extinguishment costs
—
24,650
Other
(478
)
1,737
Change in operating assets and liabilities, net of effect of
acquisitions: Accounts receivable, net
(18,222
)
(2,490
)
Other current assets
(16,638
)
75
Other assets
(202
)
(3,570
)
Accounts payable and other accrued liabilities
10,501
(3,979
)
Accrued salaries and benefits
246
2,915
Other liabilities
6,298
(4,210
)
Government relief funds
(7,556
)
—
Net cash provided by continuing operating activities
76,787
75,784
Net cash provided by discontinued operating activities
—
253
Net cash provided by operating activities
76,787
76,037
Investing activities: Cash paid for capital
expenditures
(50,527
)
(58,682
)
Proceeds from U.K. Sale
—
1,511,020
Settlement of foreign currency derivatives
—
(84,795
)
Proceeds from sale of property and equipment
1,294
134
Other
(460
)
(74
)
Net cash (used in) provided by investing activities
(49,693
)
1,367,603
Financing activities: Borrowings on long-term debt
—
425,000
Borrowings on revolving credit facility
—
430,000
Principal payments on revolving credit facility
(10,000
)
(270,000
)
Principal payments on long-term debt
(2,656
)
—
Repayment of long-term debt
—
(2,224,603
)
Payment of debt issuance costs
—
(9,935
)
Repurchase of shares for payroll tax withholding, net of proceeds
from stock option exercises
(11,741
)
8,219
Contributions from noncontrolling partners in joint ventures
4,290
1,000
Distributions to noncontrolling partners in joint ventures
(447
)
(377
)
Other
14
(6,793
)
Net cash used in financing activities
(20,540
)
(1,647,489
)
Effect of exchange rate changes on cash
—
4,067
Net increase (decrease) in cash and cash equivalents
6,554
(199,782
)
Cash and cash equivalents at beginning of the period
133,813
378,697
Cash and cash equivalents at end of the period
$
140,367
$
178,915
Acadia Healthcare Company, Inc. Operating Statistics
(Unaudited, Revenue in thousands)
Three Months Ended March
31,
2022
2021
% Change
U.S. Same Facility Results (1) Revenue
$
592,278
$
545,478
8.6
%
Patient Days
684,429
669,538
2.2
%
Admissions
42,968
44,096
-2.6
%
Average Length of Stay (2)
15.9
15.2
4.9
%
Revenue per Patient Day
$
865
$
815
6.2
%
Adjusted EBITDA margin
27.8
%
26.3
%
150 bps U.S. Facility Results Revenue
$
616,653
$
551,199
11.9
%
Patient Days
706,326
674,491
4.7
%
Admissions
45,196
44,164
2.3
%
Average Length of Stay (2)
15.6
15.3
2.3
%
Revenue per Patient Day
$
873
$
817
6.8
%
Adjusted EBITDA margin
26.3
%
26.0
%
30 bps (1) Same facility results for the periods presented
include facilities we have operated for more than one year and
exclude certain closed services. (2) Average length of stay is
defined as patient days divided by admissions.
Acadia Healthcare
Company, Inc. Reconciliation of Net Income Attributable to
Acadia Healthcare Company, Inc. to Adjusted EBITDA
(Unaudited)
Three Months Ended March
31,
2022
2021
(in thousands) Net income attributable to Acadia
Healthcare Company, Inc.
$
60,837
$
9,717
Net income attributable to noncontrolling interests
1,073
762
Loss from discontinued operations, net of taxes
—
12,641
Provision for income taxes
17,402
6,204
Interest expense, net
15,787
29,027
Depreciation and amortization
28,926
24,894
EBITDA
124,025
83,245
Adjustments: Equity-based compensation expense (a)
7,925
7,034
Transaction-related expenses (b)
3,582
4,610
Debt extinguishment costs (c)
—
24,650
Adjusted EBITDA
$
135,532
$
119,539
Adjusted EBITDA margin
22.0
%
21.7
%
See footnotes on page 11.
Acadia Healthcare
Company, Inc. Reconciliation of Net Income Attributable to
Acadia Healthcare Company, Inc. to Adjusted Income
Attributable to Acadia Healthcare Company, Inc.
(Unaudited) Three Months Ended March 31,
2022
2021
(in thousands, except per share amounts) Net income
attributable to Acadia Healthcare Company, Inc.
$
60,837
$
9,717
Loss from discontinued operations, net of taxes
—
12,641
Adjustments to income: Transaction-related expenses (b)
3,582
4,610
Debt extinguishment costs (c)
—
24,650
Provision for income taxes
17,402
6,204
Adjusted income from continuing operations before income taxes
attributable to Acadia Healthcare Company, Inc.
81,821
57,822
Income tax effect of adjustments to income (d)
20,619
15,618
Adjusted income from continuing operations attributable to Acadia
Healthcare Company, Inc.
61,202
42,204
Weighted-average shares outstanding - diluted
91,012
89,941
Adjusted income from continuing operations attributable to
Acadia Healthcare Company, Inc. per diluted share
$
0.67
$
0.47
See footnotes on page 11.
Acadia Healthcare
Company, Inc. Footnotes We have included certain
financial measures in this press release, including those listed
below, which are “non-GAAP financial measures” as defined under the
rules and regulations promulgated by the SEC. These non-GAAP
financial measures include, and are defined, as follows: •
EBITDA: net income attributable to
Acadia Healthcare Company, Inc. adjusted for net income
attributable to noncontrolling interests, loss from discontinued
operations, net of taxes, provision for income taxes, net interest
expense and depreciation and amortization. •
Adjusted EBITDA: EBITDA adjusted for equity-based
compensation expense, transaction-related expenses and debt
extinguishment costs. •
Adjusted EBITDA
margin: Adjusted EBITDA divided by revenue. •
Adjusted income from continuing operations before income
taxes attributable to Acadia Healthcare Company, Inc.: net
income attributable to Acadia Healthcare Company, Inc. adjusted for
loss from discontinued operations, net of taxes,
transaction-related expenses, debt extinguishment costs and
provision for income taxes. •
Adjusted income
from continuing operations attributable to Acadia Healthcare
Company, Inc.: Adjusted income from continuing operations
before income taxes attributable to Acadia Healthcare Company, Inc.
adjusted for the income tax effect of adjustments to income. The
non-GAAP financial measures presented herein 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”). The non-GAAP financial measures presented
herein 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 these non-GAAP financial
measures may not be comparable to similarly titled measures of
other companies. We have included information concerning the
non-GAAP financial measures 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 similar non-GAAP financial
measures when reporting their results. Because the non-GAAP
financial measures are not measurements determined in accordance
with GAAP and are thus susceptible to varying calculations, the
non-GAAP financial measures, as presented, may not be comparable to
other similarly titled measures of other companies. Our
presentation of these non-GAAP financial measures 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 primarily related to termination, restructuring, management
transition, acquisition and other similar costs. (c) Represents
debt extinguishment costs recorded during the first quarter of 2021
in connection with the redemption of the 5.625% senior notes and
6.500% senior notes and the termination of the prior credit
facility. (d) Represents the income tax effect of adjustments to
income based on tax rates of 25.2% and 27.0% for the three months
ended March 31, 2022 and 2021, respectively.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20220503006165/en/
Gretchen Hommrich Vice President, Investor Relations (615)
861-6000
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