Company Affirms Full Year 2023
Guidance
Acadia Healthcare Company, Inc. (NASDAQ: ACHC) today announced
financial results for the first quarter ended March 31, 2023.
First Quarter Highlights
- Revenue totaled $704.3 million, an increase of 14.2% over the
first quarter of 2022
- Same facility revenue increased 13.3% compared with the first
quarter of 2022, including an increase in patient days of 6.5% and
an increase in revenue per patient day of 6.4%
- Net income attributable to Acadia totaled $66.0 million, or
$0.72 per diluted share, and adjusted income from continuing
operations attributable to Acadia stockholders totaled $68.7
million, or $0.75 per diluted share
- Adjusted EBITDA totaled $151.3 million, an increase of 11.6%
over the first quarter of 2022
- Accelerated growth trajectory is on track, including the
addition of 106 beds to the Company’s existing facilities in the
first quarter and continued progress towards opening four new
inpatient facilities and at least six comprehensive treatments
centers (CTCs) in 2023
First Quarter Results
The Company reported revenue of $704.3 million for the first
quarter of 2023, compared with $616.7 million for the first quarter
of 2022. Adjusted EBITDA was $151.3 million for the first quarter
of 2023, compared with $135.5 million for the first quarter of
2022.
Net income attributable to Acadia stockholders for the first
quarter of 2023 was $66.0 million, or $0.72 per diluted share.
Adjusted income from continuing operations attributable to Acadia
stockholders was $68.7 million, or $0.75 per diluted share, for the
first quarter of 2023. 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 2023, Acadia’s same facility revenue
increased 13.3% compared with the first quarter of 2022, including
an increase in patient days of 6.5% and an increase in revenue per
patient day of 6.4%.
Chris Hunter, Chief Executive Officer of Acadia Healthcare
Company, remarked, “We are pleased to report a strong start to 2023
for Acadia. With solid execution, we delivered favorable results on
our key performance metrics for the first quarter. Our labor costs
were in line with our expectations, and our base wage inflation and
premium pay showed sequential improvement in the first quarter of
2023 compared with the fourth quarter of 2022. We have continued to
see robust demand across our service lines, and we have continued
to serve more patients who come to us for care. We are proud of the
extraordinary work of our committed team of employees and
clinicians who are meeting this need every day by providing safe,
quality patient care for those seeking treatment for mental health
and substance use issues.
Strategic Investments for Long-Term Growth
“During the first quarter of 2023, we continued to advance our
growth strategy and extend our market reach through our five
distinct growth pathways. We believe Acadia is well positioned to
meet the increasing demand for our services with a national network
of 250 behavioral healthcare facilities and diversified service
lines across the continuum of care. We will continue to build upon
this solid foundation and make the necessary investments to support
our growth objectives.
“Our first pathway, facility expansions, offers the best return
on investment as we can utilize our existing infrastructure and
benefit from having experienced staff. We had a successful start to
2023 by adding 106 beds to our existing facilities in the first
quarter, and we expect to add a total of approximately 300 beds in
2023.
“Our second growth pathway is to develop wholly owned de novo
facilities in underserved markets for behavioral healthcare
services. Later this year, we plan to open the newly renovated
101-bed adult hospital and outpatient facility that are part of the
Montrose Behavioral Health Hospital in Chicago, Illinois as well as
an 80-bed inpatient facility, Coachella Valley Behavioral Health,
in Indio, California. During the first quarter, we commenced
construction on a new 100-bed acute care behavioral health hospital
in Mesa, Arizona. Slated to open in early 2024, Agave Ridge
Behavioral Hospital will support the growing need for accessible,
high-quality behavioral healthcare services in Mesa and its
surrounding communities. We will continue to pursue additional de
novo opportunities in 2024 and beyond.
“Expanding our network of CTCs is another important priority for
Acadia. Our CTCs serve a vital role in addressing the growing and
critical need for medication-assisted treatments for patients
dealing with opioid use disorder. We will continue to expand our
network of 151 CTCs in 32 states with a goal of adding at least six
CTCs in 2023.
“A third important pathway for our continued growth is through
joint venture partnerships with leading healthcare providers and
premier healthcare systems across the country. With our clinical
expertise and experience as the leading pure-play provider of
behavioral healthcare services, Acadia is an attractive partner for
established providers who want to expand behavioral healthcare
treatment options in their respective communities. Working
together, we have a shared commitment to provide access to quality
care and support the critical need in the local community. Acadia
has joint venture partnerships for 19 facilities with nine
facilities in operation and ten facilities expected to open over
the next several years, including two facilities in 2023 with our
partners, Geisinger and Bronson Healthcare.
“With respect to our fourth pathway, we are focused on
identifying acquisitions that support our growth objectives and
meet the criteria of our capital allocation strategy. We continue
to target M&A opportunities that provide access to new markets
or add service offerings. We are fortunate to have a strong balance
sheet with ample liquidity and capital to pursue acquisitions and
support our other strategic growth initiatives.
“For our fifth growth pathway, we continue to extend our
continuum of care to support the patients who come to Acadia for
behavioral healthcare services. We have expanded our treatment
options by adding nine Partial Hospitalization Programs (PHP) or
Intensive Outpatient Programs (IOP) at select facilities to assist
patients after they leave inpatient and residential treatment, as
well as by providing greater access to virtual care offerings. We
have also improved our cross-referral program between facilities to
allow nurses and clinicians to refer patients more easily across
our network and provide the appropriate level of care,” added
Hunter.
Cash and Liquidity
Acadia has continued to maintain a strong financial position
with sufficient capital to make strategic investments in its
business. As of March 31, 2023, the Company had $63.8 million in
cash and cash equivalents and $485 million available under its $600
million revolving credit facility with a net leverage ratio of
approximately 2.2x.
Looking Ahead
Hunter concluded, “In late March, U.S. Surgeon General Vivek
Murthy reinforced his position that mental health is ‘the defining
public health crisis of our time’ and reiterated his continued
intense focus on the issue. As the leading pure-play provider of
behavioral healthcare services, we are playing a vital role in
addressing a critical need in our country. The month of May has
been designated ‘Mental Health Awareness Month’ where advocates
will continue to reinforce the importance of mental health and
challenges impacting all of our communities. Fortunately,
behavioral healthcare has become a higher priority with medical
professionals and government healthcare officials, which has led to
greater access to and funding for treatment. Acadia is uniquely
positioned to bridge the gap to accessible behavioral healthcare
services and meet this growing demand. We have a proven operating
model across the continuum of care and a well-defined strategy to
leverage our scale and expertise and further extend our market
reach. Above all, we are focused on our mission to provide high
quality care to our patients and support the communities we
serve.”
Financial Guidance
Acadia today affirmed its previously announced financial
guidance for 2023, as follows:
2023
Guidance Range
Revenue
$2.82 to $2.88 billion
Adjusted EBITDA
$635 to $675 million
Adjusted earnings per diluted share
$3.10 to $3.40
Interest expense
$80 to $85 million
Tax rate
25% to 26%
Depreciation and amortization expense
$125 to $135 million
Stock compensation expense
$30 to $35 million
Operating cash flows
$450 to $500 million
Expansion capital expenditures
$350 to $400 million
Maintenance capital expenditures
$40 to $50 million
IT capital expenditures
$35 to $45 million
The Company’s guidance does not include the impact of any future
acquisitions, divestitures, transaction-related expenses or
recognition of additional income from the CARES Act.
Conference Call
Acadia will hold a conference call to discuss its first quarter
financial results at 9:00 a.m. Eastern Time on Thursday, April 27,
2023. 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, 2023, Acadia operated a
network of 250 behavioral healthcare facilities with approximately
11,100 beds in 39 states and Puerto Rico. With approximately 23,000
employees serving more than 75,000 patients daily, Acadia is the
largest stand-alone behavioral healthcare 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) potential difficulties in successfully integrating the
operations of acquired facilities or realizing the expected
benefits and synergies of our facility expansions, acquisitions,
joint ventures and de novo transactions; (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 government and commercial payors;
(iv) 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; (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; (vi) potential disruptions to our
information technology systems or a cybersecurity incident; and
(vii) potential operating difficulties, including, without
limitation, disruption to the U.S. economy and financial markets;
reduced admissions and patient volumes; increased costs relating to
labor, supply chain and other expenditures; changes in competition
and client preferences; 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,
2023
2022
(In thousands, except per share amounts) Revenue
$
704,267
$
616,653
Salaries, wages and benefits (including equity-based
compensation expense of $7,629 and $7,925, respectively)
391,177
335,762
Professional fees
41,125
36,911
Supplies
26,021
23,699
Rents and leases
11,424
11,249
Other operating expenses
90,838
81,425
Depreciation and amortization
31,569
28,926
Interest expense, net
19,999
15,787
Transaction-related expenses
6,471
3,582
Total expenses
618,624
537,341
Income before income taxes
85,643
79,312
Provision for income taxes
19,085
17,402
Net income
66,558
61,910
Net income attributable to noncontrolling interests
(543
)
(1,073
)
Net income attributable to Acadia Healthcare Company, Inc.
$
66,015
$
60,837
Earnings per share attributable to Acadia Healthcare
Company, Inc. stockholders: Basic
$
0.73
$
0.68
Diluted
$
0.72
$
0.67
Weighted-average shares outstanding: Basic
90,101
89,258
Diluted
91,391
91,012
Acadia Healthcare Company, Inc. Condensed Consolidated
Balance Sheets (Unaudited)
March 31,
December 31,
2023
2022
(In thousands) ASSETS Current assets: Cash and
cash equivalents
$
63,829
$
97,649
Accounts receivable, net
346,407
322,439
Other current assets
127,554
86,037
Total current assets
537,790
506,125
Property and equipment, net
1,998,037
1,952,045
Goodwill
2,222,805
2,222,805
Intangible assets, net
76,247
76,041
Deferred tax assets
2,918
2,950
Operating lease right-of-use assets
133,278
135,238
Other assets
73,181
92,697
Total assets
$
5,044,256
$
4,987,901
LIABILITIES AND EQUITY Current liabilities:
Current portion of long-term debt
$
21,250
$
21,250
Accounts payable
125,729
104,723
Accrued salaries and benefits
94,912
125,298
Current portion of operating lease liabilities
26,415
26,463
Other accrued liabilities
109,823
110,592
Total current liabilities
378,129
388,326
Long-term debt
1,399,778
1,364,541
Deferred tax liabilities
92,767
92,588
Operating lease liabilities
114,592
116,429
Other liabilities
128,933
125,033
Total liabilities
2,114,199
2,086,917
Redeemable noncontrolling interests
90,455
88,257
Equity: Common stock
910
899
Additional paid-in capital
2,619,289
2,658,440
Retained earnings
219,403
153,388
Total equity
2,839,602
2,812,727
Total liabilities and equity
$
5,044,256
$
4,987,901
Acadia Healthcare Company, Inc. Condensed Consolidated
Statements of Cash Flows (Unaudited)
Three Months Ended March
31,
2023
2022
(In thousands) Operating activities: Net income
$
66,558
$
61,910
Adjustments to reconcile net income to net cash provided by
operating activities: Depreciation and amortization
31,569
28,926
Amortization of debt issuance costs
824
808
Equity-based compensation expense
7,629
7,925
Deferred income taxes
212
3,269
Other
1,089
(478
)
Change in operating assets and liabilities, net of effect of
acquisitions: Accounts receivable, net
(23,968
)
(18,222
)
Other current assets
(23,430
)
(16,638
)
Other assets
(1,436
)
(202
)
Accounts payable and other accrued liabilities
13,633
10,501
Accrued salaries and benefits
(30,386
)
246
Other liabilities
2,114
6,298
Government relief funds
—
(7,556
)
Net cash provided by operating activities
44,408
76,787
Investing activities: Cash paid for capital
expenditures
(66,525
)
(50,527
)
Proceeds from sale of property and equipment
409
1,294
Other
(794
)
(460
)
Net cash used in investing activities
(66,910
)
(49,693
)
Financing activities: Borrowings on revolving credit
facility
40,000
—
Principal payments on revolving credit facility
—
(10,000
)
Principal payments on long-term debt
(5,313
)
(2,656
)
Repurchase of shares for payroll tax withholding, net of proceeds
from stock option exercises
(47,671
)
(11,741
)
Contributions from noncontrolling partners in joint ventures
1,655
4,290
Distributions to noncontrolling partners in joint ventures
—
(447
)
Other
11
14
Net cash used in financing activities
(11,318
)
(20,540
)
Net (decrease) increase in cash and cash equivalents
(33,820
)
6,554
Cash and cash equivalents at beginning of the period
97,649
133,813
Cash and cash equivalents at end of the period
$
63,829
$
140,367
Acadia Healthcare Company, Inc. Operating Statistics
(Unaudited, Revenue in thousands)
Three Months Ended March
31,
2023
2022
% Change
U.S. Same Facility Results (1) Revenue
$
694,940
$
613,267
13.3
%
Patient Days
746,658
701,093
6.5
%
Admissions
49,059
45,167
8.6
%
Average Length of Stay (2)
15.2
15.5
-1.9
%
Revenue per Patient Day
$
931
$
875
6.4
%
Adjusted EBITDA margin
27.6
%
26.7
%
90 bps U.S. Facility Results Revenue
$
704,267
$
616,653
14.2
%
Patient Days
754,858
706,326
6.9
%
Admissions
49,906
45,196
10.4
%
Average Length of Stay (2)
15.1
15.6
-3.2
%
Revenue per Patient Day
$
933
$
873
6.9
%
Adjusted EBITDA margin
26.5
%
26.3
%
20 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,
2023
2022
(in thousands) Net income attributable to Acadia
Healthcare Company, Inc.
$
66,015
$
60,837
Net income attributable to noncontrolling interests
543
1,073
Provision for income taxes
19,085
17,402
Interest expense, net
19,999
15,787
Depreciation and amortization
31,569
28,926
EBITDA
137,211
124,025
Adjustments: Equity-based compensation expense (a)
7,629
7,925
Transaction-related expenses (b)
6,471
3,582
Adjusted EBITDA
$
151,311
$
135,532
Adjusted EBITDA margin
21.5
%
22.0
%
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,
2023
2022
(in thousands, except per share amounts) Net income
attributable to Acadia Healthcare Company, Inc.
$
66,015
$
60,837
Adjustments to income: Transaction-related expenses (b)
6,471
3,582
Provision for income taxes
19,085
17,402
Adjusted income before income taxes attributable to Acadia
Healthcare Company, Inc.
91,571
81,821
Income tax effect of adjustments to income (c)
22,920
20,619
Adjusted income attributable to Acadia Healthcare Company, Inc.
$
68,651
$
61,202
Weighted-average shares outstanding - diluted
91,391
91,012
Adjusted income attributable to Acadia Healthcare Company,
Inc. per diluted share
$
0.75
$
0.67
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, provision for income
taxes, net interest expense and depreciation and amortization.
•
Adjusted EBITDA: EBITDA
adjusted for equity-based compensation expense and
transaction-related expenses. •
Adjusted EBITDA margin: Adjusted EBITDA divided by
revenue. •
Adjusted income before
income taxes attributable to Acadia Healthcare Company,
Inc.: net income attributable to Acadia Healthcare Company,
Inc. adjusted for transaction-related expenses and provision for
income taxes. •
Adjusted income
attributable to Acadia Healthcare Company, Inc.: Adjusted
income 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 the income tax
effect of adjustments to income based on tax rates of 25.0% and
25.2% for the three months ended March 31, 2023 and 2022,
respectively.
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version on businesswire.com: https://www.businesswire.com/news/home/20230426005860/en/
Gretchen Hommrich Vice President, Investor Relations (615)
861-6000
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