ACHC Acadia Healthcare Company Inc

Provides Updated Guidance for 2024

Acadia Healthcare Company, Inc. (NASDAQ: ACHC) today announced financial results for the second quarter and six months ended June 30, 2024.

Second Quarter Highlights

• Revenue totaled $796.0 million, an increase of 8.8% over the second quarter of 2023
• Same facility revenue increased 8.3% compared with the second quarter of 2023, including an increase in revenue per patient day of 5.6% and an increase in patient days of 2.6%
• Net income attributable to Acadia totaled $78.5 million, or $0.85 per diluted share
• Adjusted income attributable to Acadia totaled $83.6 million, or $0.91 per diluted share
• Adjusted EBITDA totaled $187.6 million, an increase of 7.6% over the second quarter of 2023
• Continued progress on the execution of the Company’s growth strategy, including the addition of 37 beds to the Company’s existing facilities and the opening of a 100-bed de novo facility in Mesa, Arizona.

Adjusted income attributable to Acadia and Adjusted EBITDA are non-GAAP financial measures. A reconciliation of all non-GAAP financial measures in this press release begins on page 8.

Second Quarter Results

Chris Hunter, Chief Executive Officer of Acadia Healthcare Company, remarked, “Acadia delivered another strong financial and operating performance for the second quarter of 2024. With solid execution of our strategy, we achieved top line revenue growth of 8.8% and Adjusted EBITDA growth of 7.6% compared with the second quarter of 2023. These results reflect continued strong demand across our business, and we remain on track to add approximately 1,200 beds in 2024 to meet the growing need for our services. Looking forward, we expect the second half to benefit from further volume growth as the facilities and beds added over the past several quarters continue to ramp.”

“We commend our dedicated employees and clinicians across our facilities who continue to provide safe, high-quality care for the growing number of patients seeking help with behavioral health and substance use issues. With service lines across the continuum of care, strong clinical quality, and a focused operating model, we are well-positioned to continue to lead the behavioral health industry and address these critical needs across the United States.”

Strategic Investments for Long-Term Growth

During the second quarter of 2024, the Company continued to advance its growth strategy. This includes the addition of 37 beds to existing facilities during the quarter, and the opening of a new 100-bed acute care hospital, Agave Ridge Behavioral Hospital, in Mesa, Arizona.

For the full year, the Company remains on track to add approximately 1,200 beds, including over 400 new beds to existing facilities, and add up to 14 new Comprehensive Treatment Centers (CTCs).

The Company expects to open four additional inpatient facilities in the second half of 2024, including two new joint venture facilities. Acadia has 21 joint venture partnerships for 22 hospitals, with 11 hospitals already in operation and 11 additional hospitals expected to open in the coming years.

Cash and Liquidity

Acadia has continued to maintain a strong financial position with sufficient capital to make strategic investments in its business. As of June 30, 2024, the Company had $77.2 million in cash and cash equivalents and $371.5 million available under its $600 million revolving credit facility with a net leverage ratio of approximately 2.5x.

Net leverage ratio is a non-GAAP financial measure. A reconciliation of all non-GAAP financial measures in this press release begins on page 8.

2024 Financial Guidance

Acadia today revised its previously announced financial guidance for 2024. Revised guidance reflects the closure of two facilities during the second quarter(2).

 

2024 Guidance Range

Revenue (1)

$3.180 to $3.225 billion

Adjusted EBITDA (1)

$735 to $765 million

Adjusted earnings per diluted share (1)

$3.45 to $3.65

Interest expense

$110 to $120 million

Tax rate

24.5% to 25.5%

Depreciation and amortization expense

$150 to $160 million

Stock compensation expense

$40 to $45 million

Operating cash flows

$525 to $575 million

Expansion capital expenditures

$425 to $475 million

Maintenance and IT capital expenditures

$90 to $110 million

 

 

Total bed additions, excluding acquisitions

Approx. 1,200 beds

(1)

 

Includes one-time state payments of approximately $10 million (or $0.09 per diluted share) for the year, of which approximately $7 million (or $0.06 per diluted share) was received in the first quarter of 2024.

(2)

Prior full-year guidance assumed approximately $25 million of revenue and approximately break-even EBITDA from two facilities that were closed during the second quarter.

The Company’s guidance does not include the impact of any future acquisitions, divestitures, transaction, legal and other costs or non-recurring legal settlements expense.

Conference Call

Acadia will hold a conference call to discuss its second quarter financial results at 8:00 a.m. Central/9:00 a.m. Eastern Time on Thursday, August 1, 2024. 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 June 30, 2024, Acadia operated a network of 258 behavioral healthcare facilities with approximately 11,400 beds in 38 states and Puerto Rico. With approximately 23,500 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

June 30,

Six Months Ended

June 30,

 

2024

 

 

2023

 

 

2024

 

 

2023

 

(In thousands, except per share amounts)

  Revenue

$

796,040

 

$

731,337

 

$

1,564,091

 

$

1,435,604

 

  Salaries, wages and benefits (including equity-based compensation expense of $8,869, $7,348, $17,547 and $14,977, respectively)

 

419,757

 

 

386,633

 

 

837,280

 

 

777,810

 

Professional fees

 

48,050

 

 

43,803

 

 

93,738

 

 

84,928

 

Supplies

 

27,878

 

 

26,144

 

 

54,530

 

 

52,165

 

Rents and leases

 

11,889

 

 

11,725

 

 

23,752

 

 

23,149

 

Other operating expenses

 

109,690

 

 

95,912

 

 

210,763

 

 

186,750

 

Depreciation and amortization

 

36,066

 

 

32,012

 

 

72,413

 

 

63,581

 

Interest expense, net

 

29,159

 

 

20,910

 

 

56,373

 

 

40,909

 

Loss on impairment

 

1,000

 

 

8,694

 

 

1,000

 

 

8,694

 

Transaction, legal and other costs

 

6,091

 

 

9,074

 

 

8,938

 

 

15,545

 

Total expenses

 

689,580

 

 

634,907

 

 

1,358,787

 

 

1,253,531

 

Income before income taxes

 

106,460

 

 

96,430

 

 

205,304

 

 

182,073

 

Provision for income taxes

 

25,643

 

 

22,881

 

 

45,717

 

 

41,966

 

Net income

 

80,817

 

 

73,549

 

 

159,587

 

 

140,107

 

Net income attributable to noncontrolling interests

 

(2,335

)

 

(1,250

)

 

(4,722

)

 

(1,793

)

Net income attributable to Acadia Healthcare Company, Inc.

$

78,482

 

$

72,299

 

$

154,865

 

$

138,314

 

  Earnings per share attributable to Acadia Healthcare Company, Inc. stockholders: Basic

$

0.86

 

$

0.79

 

$

1.69

 

$

1.53

 

Diluted

$

0.85

 

$

0.79

 

$

1.68

 

$

1.51

 

  Weighted-average shares outstanding: Basic

 

91,628

 

 

91,044

 

 

91,495

 

 

90,691

 

Diluted

 

92,043

 

 

91,546

 

 

92,051

 

 

91,640

 

Acadia Healthcare Company, Inc. Condensed Consolidated Balance Sheets (Unaudited)  

June 30,

 

December 31,

2024

 

2023

(In thousands)   ASSETS Current assets: Cash and cash equivalents

$

77,167

$

100,073

Accounts receivable, net

 

389,374

 

361,451

Other current assets

 

178,673

 

134,476

Total current assets

 

645,214

 

596,000

Property and equipment, net

 

2,497,856

 

2,266,610

Goodwill

 

2,261,395

 

2,225,962

Intangible assets, net

 

73,348

 

73,278

Deferred tax assets

 

2,741

 

6,658

Operating lease right-of-use assets

 

123,273

 

117,780

Other assets

 

74,225

 

72,553

Total assets

$

5,678,052

$

5,358,841

    LIABILITIES AND EQUITY Current liabilities: Current portion of long-term debt

$

66,574

$

29,219

Accounts payable

 

159,520

 

156,132

Accrued salaries and benefits

 

134,503

 

141,901

Current portion of operating lease liabilities

 

27,010

 

26,268

Other accrued liabilities

 

158,915

 

532,261

Total current liabilities

 

546,522

 

885,781

Long-term debt

 

1,774,556

 

1,342,548

Deferred tax liabilities

 

37,031

 

1,931

Operating lease liabilities

 

104,706

 

100,808

Other liabilities

 

150,641

 

140,113

Total liabilities

 

2,613,456

 

2,471,181

Redeemable noncontrolling interests

 

111,878

 

105,686

Equity: Common stock

 

917

 

913

Additional paid-in capital

 

2,665,215

 

2,649,340

Retained earnings

 

286,586

 

131,721

Total equity

 

2,952,718

 

2,781,974

Total liabilities and equity

$

5,678,052

$

5,358,841

Acadia Healthcare Company, Inc. Condensed Consolidated Statements of Cash Flows (Unaudited)  

Six Months Ended

June 30,

 

2024

 

 

2023

 

(In thousands) Operating activities: Net income

$

159,587

 

$

140,107

 

Adjustments to reconcile net income to net cash (used in) provided by operating activities: Depreciation and amortization

 

72,413

 

 

63,581

 

Amortization of debt issuance costs

 

2,034

 

 

1,651

 

Equity-based compensation expense

 

17,547

 

 

14,977

 

Deferred income taxes

 

39,017

 

 

347

 

Loss on impairment

 

1,000

 

 

8,694

 

Other

 

(3,942

)

 

1,086

 

Change in operating assets and liabilities, net of effect of acquisitions: Accounts receivable, net

 

(26,114

)

 

(23,397

)

Other current assets

 

(14,182

)

 

(8,743

)

Other assets

 

842

 

 

(322

)

Accounts payable and other accrued liabilities

 

(399,619

)

 

21,518

 

Accrued salaries and benefits

 

(8,525

)

 

(13,889

)

Other liabilities

 

9,805

 

 

2,568

 

Net cash (used in) provided by operating activities

 

(150,137

)

 

208,178

 

  Investing activities: Cash paid for acquisitions, net of cash acquired

 

(50,722

)

 

—

 

Cash paid for capital expenditures

 

(296,652

)

 

(157,359

)

Proceeds from sale of property and equipment

 

10,209

 

 

621

 

Other

 

(2,933

)

 

(940

)

Net cash used in investing activities

 

(340,098

)

 

(157,678

)

  Financing activities: Borrowings on long-term debt

 

350,000

 

 

—

 

Borrowings on revolving credit facility

 

160,000

 

 

40,000

 

Principal payments on revolving credit facility

 

(15,000

)

 

(20,000

)

Principal payments on long-term debt

 

(25,605

)

 

(10,625

)

Payment of debt issuance costs

 

(1,518

)

 

—

 

Repurchase of shares for payroll tax withholding, net of proceeds from stock option exercises

 

(1,668

)

 

(45,904

)

Contributions from noncontrolling partners in joint ventures

 

2,970

 

 

2,516

 

Distributions to noncontrolling partners in joint ventures

 

(1,500

)

 

(1,983

)

Other

 

(350

)

 

20

 

Net cash provided by (used in) financing activities

 

467,329

 

 

(35,976

)

  Net (decrease) increase in cash and cash equivalents

 

(22,906

)

 

14,524

 

Cash and cash equivalents at beginning of the period

 

100,073

 

 

97,649

 

Cash and cash equivalents at end of the period

$

77,167

 

$

112,173

 

 

 

Effect of acquisitions: Assets acquired, excluding cash

$

55,678

 

$

—

 

Liabilities assumed

 

(3,456

)

 

—

 

Contingent consideration issued in connection with an acquisition

 

(1,500

)

 

—

 

Cash paid for acquisitions, net of cash acquired

$

50,722

 

$

—

 

Operating Statistics (Unaudited, Revenue in thousands)  

Three Months Ended

June 30,

 

Six Months Ended

June 30,

 

2024

 

 

 

2023

 

 

% Change

 

 

2024

 

 

 

2023

 

 

% Change

Same Facility Results (1) Revenue

$

776,145

 

$

716,653

 

8.3

%

$

1,532,401

 

$

1,409,073

 

8.8

%

Patient Days

 

773,499

 

 

754,099

 

2.6

%

 

1,531,489

 

 

1,495,810

 

2.4

%

Admissions

 

49,091

 

 

48,727

 

0.7

%

 

97,249

 

 

97,733

 

-0.5

%

Average Length of Stay (2)

 

15.8

 

 

15.5

 

1.8

%

 

15.7

 

 

15.3

 

2.9

%

Revenue per Patient Day

$

1,003

 

$

950

 

5.6

%

$

1,001

 

$

942

 

6.2

%

Adjusted EBITDA margin

 

29.5

%

 

29.5

%

0 bps

 

29.1

%

 

28.5

%

60 bps   Facility Results Revenue

$

796,040

 

$

731,337

 

8.8

%

$

1,564,091

 

$

1,435,604

 

9.0

%

Patient Days

 

791,673

 

 

771,955

 

2.6

%

 

1,560,351

 

 

1,526,813

 

2.2

%

Admissions

 

50,511

 

 

50,029

 

1.0

%

 

99,569

 

 

99,935

 

-0.4

%

Average Length of Stay (2)

 

15.7

 

 

15.4

 

1.6

%

 

15.7

 

 

15.3

 

2.6

%

Revenue per Patient Day

$

1,006

 

$

947

 

6.1

%

$

1,002

 

$

940

 

6.6

%

Adjusted EBITDA margin

 

28.1

%

 

28.6

%

-50 bps

 

27.8

%

 

27.6

%

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

June 30,

 

Six Months Ended

June 30,

 

2024

 

 

 

2023

 

 

 

2024

 

 

 

2023

 

(in thousands)   Net income attributable to Acadia Healthcare Company, Inc.

$

78,482

 

$

72,299

 

$

154,865

 

$

138,314

 

Net income attributable to noncontrolling interests

 

2,335

 

 

1,250

 

 

4,722

 

 

1,793

 

Provision for income taxes

 

25,643

 

 

22,881

 

 

45,717

 

 

41,966

 

Interest expense, net

 

29,159

 

 

20,910

 

 

56,373

 

 

40,909

 

Depreciation and amortization

 

36,066

 

 

32,012

 

 

72,413

 

 

63,581

 

EBITDA

 

171,685

 

 

149,352

 

 

334,090

 

 

286,563

 

  Adjustments: Equity-based compensation expense (a)

 

8,869

 

 

7,348

 

 

17,547

 

 

14,977

 

Transaction, legal and other costs (b)

 

6,091

 

 

9,074

 

 

8,938

 

 

15,545

 

Loss on impairment (c)

 

1,000

 

 

8,694

 

 

1,000

 

 

8,694

 

Adjusted EBITDA

$

187,645

 

$

174,468

 

$

361,575

 

$

325,779

 

  Adjusted EBITDA margin

 

23.6

%

 

23.9

%

 

23.1

%

 

22.7

%

    See footnotes on page 10. Reconciliation of Net Income Attributable to Acadia Healthcare Company, Inc. to Adjusted Income Attributable to Acadia Healthcare Company, Inc. (Unaudited)  

Three Months Ended

June 30,

Six Months Ended

June 30,

 

2024

 

2023

 

2024

 

2023

(in thousands, except per share amounts)   Net income attributable to Acadia Healthcare Company, Inc.

$

78,482

$

72,299

$

154,865

$

138,314

  Adjustments to income: Transaction, legal and other costs (b)

 

6,091

 

9,074

 

8,938

 

15,545

Loss on impairment (c)

 

1,000

 

8,694

 

1,000

 

8,694

Provision for income taxes

 

25,643

 

22,881

 

45,717

 

41,966

Adjusted income before income taxes attributable to Acadia Healthcare Company, Inc.

 

111,216

 

112,948

 

210,520

 

204,519

Income tax effect of adjustments to income (d)

 

27,643

 

28,271

 

49,654

 

51,191

Adjusted income attributable to Acadia Healthcare Company, Inc.

$

83,573

$

84,677

$

160,866

$

153,328

  Weighted-average shares outstanding - diluted

 

92,043

 

91,546

 

92,051

 

91,640

  Adjusted income attributable to Acadia Healthcare Company, Inc. per diluted share

$

0.91

$

0.92

$

1.75

$

1.67

    See footnotes on page 10. 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, transaction, legal and other costs and loss on impairment.   • 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, legal and other costs, loss on impairment 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.   • Net leverage ratio: Long-term debt (excluding $10.5 million of unamortized debt issuance costs, discount and premium) less cash and cash equivalents divided by Adjusted EBITDA for the trailing twelve months.   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, legal and other costs incurred by Acadia primarily related to legal, management transition, termination, restructuring, acquisition and other similar costs.   (c) During the three months ended June 30, 2024 and 2023, we recorded non-cash impairment charges totaling $1.0 million and $8.7 million, respectively, related to the closure of certain facilities.   (d) Represents the income tax effect of adjustments to income based on tax rates of 24.9% and 25.0% for the three months ended June 30, 2024 and 2023, respectively, and 23.6% and 25.0% for the six months ended June 30, 2024 and 2023, respectively.  

 

View source version on businesswire.com: https://www.businesswire.com/news/home/20240731606752/en/

Investor Contact: Patrick Feeley Senior Vice President, Investor Relations (615) 861-6000