8-K
Acadia Healthcare Company, Inc. (ACHC)
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
______________________________
FORM 8-K
CURRENT REPORT PURSUANT
TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of report (Date of earliest event reported): November 2, 2023
______________________________
Acadia Healthcare Company, Inc.
(Exact Name of Registrant as Specified in Its Charter)
| Delaware | 001-35331 | 45-2492228 |
|---|---|---|
| (State or Other Jurisdiction of Incorporation) | (Commission File Number) | (IRS Employer Identification No.) |
| 6100 Tower Circle,<br> Suite 1000<br><br> <br>Franklin, Tennessee<br><br> <br>(Address of Principal Executive Offices) | 37067<br><br> <br>(Zip Code) | |
| --- | --- |
(615) 861-6000
(Registrant’s Telephone Number, including Area Code)
Not Applicable
(Former Name or Former Address, if Changed Since Last Report)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (See General Instruction A.2. below):
☐ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
☐ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
☐ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
☐ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
Securities registered pursuant to Section 12(b) of the Act:
| Title of each class | Trading Symbol | Name of each exchange on which registered |
|---|---|---|
| Common Stock, $0.01 par value | ACHC | NASDAQ Global Select Market |
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
| Emerging growth company ☐ | |
|---|---|
| If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with<br> any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. | ☐ |
| --- | --- |
| Item 2.02 | Results of Operations and Financial Condition. |
|---|
On November 2, 2023, Acadia Healthcare Company, Inc. (“Acadia”) issued a press release announcing, among other things, Acadia’s operating and financial results for the third quarter ended September 30, 2023. The press release is furnished herewith as Exhibit 99 hereto and is incorporated herein by reference.
| Item 9.01 | Financial Statements and Exhibits. |
|---|---|
| (d) | Exhibits. |
| 99 | Press Release of<br> Acadia Healthcare Company, Inc., dated November 2, 2023. |
| 104 | Cover Page Interactive Data File (embedded within the Inline XBRL document) |
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
| ACADIA HEALTHCARE COMPANY, INC. | |||
|---|---|---|---|
| Date: November 2, 2023 | By: | /s/ Heather Dixon | |
| Heather Dixon | |||
| Chief Financial Officer | |||
| Exhibit 99 | |||
| --- |
Acadia Healthcare Reports Third Quarter 2023 Results and Updates Guidance Ranges to Reflect Continued Strong Business Growth and Momentum
Same Facility Revenue Increases 13%
FRANKLIN, Tenn.--(BUSINESS WIRE)--November 2, 2023--Acadia Healthcare Company, Inc. (“Acadia”) (NASDAQ: ACHC) today announced financial results for the third quarter ended September 30, 2023.
Third Quarter Highlights
- Revenue totaled $750.3 million, an increase of 12.5% over the third quarter of 2022
- Same facility revenue increased 13.0% compared with the third quarter of 2022, including an increase in revenue per patient day of 6.6% and an increase in patient days of 6.0%
- Net loss attributable to Acadia totaled $217.7 million, or $2.39 per diluted share, including the impact of legal settlements expense of $394.2 million, less expected tax benefits
- Adjusted income attributable to Acadia was $83.9 million, or $0.91 per diluted share, excluding $0.04 of income from the Provider Relief Fund (“PRF”) established under the Coronavirus Aid, Relief, and Economic Security (“CARES”) Act
- Adjusted EBITDA was $175.9 million, an increase of 13.4% over the third quarter of 2022, excluding income from the PRF
- Continued progress on the execution of the Company’s growth strategy through opening two new hospitals with joint venture partners and two comprehensive treatment centers (“CTCs”)
A reconciliation of all non-GAAP financial measures in this press release begins on page 9.
Third Quarter Results
Chris Hunter, Chief Executive Officer of Acadia, remarked, “Our results for the third quarter reflect our continued execution on our growth strategy as well as strong operational execution across all four of our business lines. Our dedicated employees and clinicians are addressing the nation’s critical need for safe, high-quality treatment for mental health and substance use issues.
“We produced strong financial results with impressive top line growth and favorable volume trends compared with the third quarter of 2022. We are pleased that the overall labor market is stabilizing with our base wage inflation continuing to decline. We expect the strategic technology investments we have made will further enhance our performance, drive efficiencies, and support strong clinical outcomes. Demand for our services is continuing to rise, and we are confident that we have a solid foundation and the right strategy in place to capitalize on this demand and deliver significant, sustainable value creation.”
Strategic Investments for Long-Term Growth
During the third quarter of 2023, the Company continued to make progress in meeting its strategic growth objectives with the following accomplishments across its five defined growth pathways:
Facility Expansions – Added a total of 204 beds to existing facilities through the first nine months of the year, on track to meet the Company’s goal to add 300 beds by the end of 2023.
De Novo Facilities – Opened two CTCs offering medication-assisted treatment for patients dealing with opioid use disorder, bringing Acadia’s total to four CTCs opened this year. The Company expects to meet its objective of adding a total of six CTCs in 2023. Additionally, the Company remains on track to open two de novo acute inpatient hospitals by the end of the year – the renovated 101-bed adult hospital and outpatient facility are part of the Montrose Behavioral Health Hospital in Chicago, Illinois, as well as an 80-bed inpatient hospital, Coachella Valley Behavioral Health, in Indio, California.
Joint Ventures – Opened two new behavioral health hospitals with joint venture partners, Bronson Healthcare in Michigan, and Geisinger in Pennsylvania, early in the third quarter. These facilities have made favorable progress to date as they continue to ramp up admissions. The Company also broke ground and commenced construction in early November on the previously announced behavioral health hospital with joint venture partner ECU Health, eastern North Carolina’s premier health system. Acadia has 20 joint venture partnerships for 21 hospitals, with 11 hospitals already in operation and 10 additional hospitals expected to open over the next few years.
Acquisitions – Announced a definitive agreement to acquire Turning Point Centers, a 76-bed specialty provider of substance use disorder and primary mental health treatment services that supports the Salt Lake City, Utah, metropolitan market. The transaction is expected to close by the end of the year.
Extend Continuum of Care – Expanded treatment options by adding three outpatient programs during the third quarter, bringing Acadia’s total to 26 outpatient programs added during the nine months ended September 30, 2023. These programs include Partial Hospitalization Programs (PHP), Intensive Outpatient Programs (IOP) or virtual services.
Cash and Liquidity
Acadia has a strong financial position with sufficient capital to make strategic investments in its business. As of September 30, 2023, the Company had $99.6 million in cash and cash equivalents and $520 million available under its $600 million revolving credit facility with a net leverage ratio of approximately 2.0x.
Litigation Resolution
As described in the Form 8-K the Company filed on October 30, 2023, Acadia entered into settlement agreements with the respective plaintiffs across the three cases related to the previously disclosed litigation in New Mexico. Under the terms of these settlement agreements, which are subject to approval by the New Mexico State District Court, and which fully resolve each of the cases and include no admission or finding of liability by Acadia or Desert Hills, the Company will pay an aggregate amount of $400 million in exchange for the release and discharge of all related claims. The Company currently intends to pay the funds from a combination of insurance, cash on hand and existing credit lines.
Looking Ahead
Hunter concluded, “The World Health Organization recently recognized the importance of mental health as a universal human right. This theme is fundamental to Acadia’s mission, and our focus of ensuring access to industry-leading, high-quality care for all those in need of our services. As the nation’s largest stand-alone behavioral health provider, we are committed to applying our recognized scale and expertise to help set the standards for care that address the escalating demand for behavioral health and substance use treatment. We continue to look for opportunities and innovation that support patients across the continuum of care and help to expand the scope of those we serve. Our results to date demonstrate our ability to execute our strategy with favorable results, and we believe 2024 will be another year of impressive growth and progress for Acadia. We are proud of the work we are doing and are committed to providing safe, quality care for the patients, families and communities we serve and creating long-term value for our stockholders.”
Financial Guidance
Acadia today adjusted its previously announced financial guidance for 2023 for the following:
| 2023 Guidance Range | |
|---|---|
| Revenue | $2.90 to $2.92 billion |
| Adjusted EBITDA, excluding income from the PRF | $665 to $675 million |
| Adjusted earnings per diluted share, excluding income from the PRF | $3.33 to $3.43 |
| Expansion capital expenditures | $300 to $350 million |
The Company affirmed the previously announced financial guidance for the following:
| Interest expense | $82 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 |
| 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, legal settlements expense or recognition of additional income from the CARES Act.
Conference Call
Acadia will hold a conference call to discuss its third quarter financial results at 8:00 a.m. Central Time/9:00 a.m. Eastern Time on Friday, November 3, 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 September 30, 2023, Acadia operated a network of 253 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) | |||||||||||
| Nine Months Ended<br><br> <br>September 30, | |||||||||||
| 2023 | 2022 | 2023 | 2022 | ||||||||
| Revenue | 750,334 | $ | 666,732 | $ | 2,185,938 | $ | 1,935,104 | ||||
| Salaries, wages and benefits (including equity-based compensation expense of 8,163, 7,240, 23,140 and 21,745, respectively) | 394,150 | 352,582 | 1,171,960 | 1,027,732 | |||||||
| Professional fees | 45,540 | 40,367 | 130,468 | 117,718 | |||||||
| Supplies | 27,147 | 25,570 | 79,312 | 74,291 | |||||||
| Rents and leases | 11,731 | 11,339 | 34,880 | 33,780 | |||||||
| Other operating expenses | 104,048 | 88,993 | 290,798 | 255,355 | |||||||
| Income from provider relief fund | (4,442 | ) | (7,656 | ) | (4,442 | ) | (16,206 | ) | |||
| Depreciation and amortization | 33,388 | 29,573 | 96,969 | 87,627 | |||||||
| Interest expense, net | 20,742 | 18,003 | 61,651 | 50,355 | |||||||
| Legal settlements expense | 394,181 | — | 394,181 | — | |||||||
| Loss on impairment | — | — | 8,694 | — | |||||||
| Transaction-related expenses | 11,247 | 10,859 | 26,792 | 18,381 | |||||||
| Total expenses | 1,037,732 | 569,630 | 2,291,263 | 1,649,033 | |||||||
| (Loss) income before income taxes | (287,398 | ) | 97,102 | (105,325 | ) | 286,071 | |||||
| (Benefit from) provision for income taxes | (71,873 | ) | 24,056 | (29,907 | ) | 69,183 | |||||
| Net (loss) income | (215,525 | ) | 73,046 | (75,418 | ) | 216,888 | |||||
| Net income attributable to noncontrolling interests | (2,185 | ) | (1,947 | ) | (3,978 | ) | (4,873 | ) | |||
| Net (loss) income attributable to Acadia Healthcare Company, Inc. | (217,710 | ) | $ | 71,099 | $ | (79,396 | ) | $ | 212,015 | ||
| (Loss) earnings per share attributable to Acadia Healthcare Company, Inc. stockholders: | |||||||||||
| Basic | (2.39 | ) | $ | 0.79 | $ | (0.87 | ) | $ | 2.37 | ||
| Diluted | (2.39 | ) | $ | 0.78 | $ | (0.87 | ) | $ | 2.31 | ||
| Weighted-average shares outstanding: | |||||||||||
| Basic | 91,168 | 89,833 | 90,852 | 89,607 | |||||||
| Diluted | 91,168 | 91,723 | 90,852 | 91,668 |
All values are in US Dollars.
| Acadia Healthcare Company, Inc. | ||||
|---|---|---|---|---|
| Condensed Consolidated Balance Sheets | ||||
| (Unaudited) | ||||
| September 30, | December 31, | |||
| 2023 | 2022 | |||
| (In thousands) | ||||
| ASSETS | ||||
| Current assets: | ||||
| Cash and cash equivalents | $ | 99,591 | $ | 97,649 |
| Accounts receivable, net | 362,666 | 322,439 | ||
| Other current assets | 241,218 | 86,037 | ||
| Total current assets | 703,475 | 506,125 | ||
| Property and equipment, net | 2,145,599 | 1,952,045 | ||
| Goodwill | 2,225,962 | 2,222,805 | ||
| Intangible assets, net | 73,811 | 76,041 | ||
| Deferred tax assets | 2,850 | 2,950 | ||
| Operating lease right-of-use assets | 122,090 | 135,238 | ||
| Other assets | 72,431 | 92,697 | ||
| Total assets | $ | 5,346,218 | $ | 4,987,901 |
| LIABILITIES AND EQUITY | ||||
| Current liabilities: | ||||
| Current portion of long-term debt | $ | 26,563 | $ | 21,250 |
| Accounts payable | 149,874 | 104,723 | ||
| Accrued salaries and benefits | 122,264 | 125,298 | ||
| Current portion of operating lease liabilities | 26,242 | 26,463 | ||
| Other accrued liabilities | 539,947 | 110,592 | ||
| Total current liabilities | 864,890 | 388,326 | ||
| Long-term debt | 1,349,954 | 1,364,541 | ||
| Deferred tax liabilities | 70,450 | 92,588 | ||
| Operating lease liabilities | 104,873 | 116,429 | ||
| Other liabilities | 145,907 | 125,033 | ||
| Total liabilities | 2,536,074 | 2,086,917 | ||
| Redeemable noncontrolling interests | 97,582 | 88,257 | ||
| Equity: | ||||
| Common stock | 912 | 899 | ||
| Additional paid-in capital | 2,637,658 | 2,658,440 | ||
| Retained earnings | 73,992 | 153,388 | ||
| Total equity | 2,712,562 | 2,812,727 | ||
| Total liabilities and equity | $ | 5,346,218 | $ | 4,987,901 |
| Acadia Healthcare Company, Inc. | ||||||
|---|---|---|---|---|---|---|
| Condensed Consolidated Statements of Cash Flows | ||||||
| (Unaudited) | ||||||
| Nine Months Ended September 30, | ||||||
| 2023 | 2022 | |||||
| (In thousands) | ||||||
| Operating activities: | ||||||
| Net (loss) income | $ | (75,418 | ) | $ | 216,888 | |
| Adjustments to reconcile net (loss) income to net cash provided by operating activities: | ||||||
| Depreciation and amortization | 96,969 | 87,627 | ||||
| Amortization of debt issuance costs | 2,485 | 2,440 | ||||
| Equity-based compensation expense | 23,140 | 21,745 | ||||
| Deferred income taxes | (21,655 | ) | 20,176 | |||
| Legal settlements expense | 394,181 | — | ||||
| Loss on impairment | 8,694 | — | ||||
| Other | 1,423 | 2,422 | ||||
| Change in operating assets and liabilities, net of effect of acquisitions: | ||||||
| Accounts receivable, net | (40,227 | ) | (35,538 | ) | ||
| Other current assets | (77,165 | ) | (28,692 | ) | ||
| Other assets | 309 | 3,373 | ||||
| Accounts payable and other accrued liabilities | 23,057 | 7,729 | ||||
| Accrued salaries and benefits | (3,038 | ) | (8,831 | ) | ||
| Other liabilities | 17,723 | 10,303 | ||||
| Government relief funds | (4,442 | ) | (32,617 | ) | ||
| Net cash provided by operating activities | 346,036 | 267,025 | ||||
| Investing activities: | ||||||
| Cash paid for acquisitions, net of cash acquired | (349 | ) | — | |||
| Cash paid for capital expenditures | (285,410 | ) | (208,792 | ) | ||
| Proceeds from sale of property and equipment | 633 | 1,784 | ||||
| Other | (1,925 | ) | (6,802 | ) | ||
| Net cash used in investing activities | (287,051 | ) | (213,810 | ) | ||
| Financing activities: | ||||||
| Borrowings on revolving credit facility | 40,000 | — | ||||
| Principal payments on revolving credit facility | (35,000 | ) | (85,000 | ) | ||
| Principal payments on long-term debt | (15,938 | ) | (13,281 | ) | ||
| Repurchase of shares for payroll tax withholding, net of proceeds from stock option exercises | (45,193 | ) | (7,541 | ) | ||
| Contributions from noncontrolling partners in joint ventures | 2,538 | 13,178 | ||||
| Distributions to noncontrolling partners in joint ventures | (3,480 | ) | (1,004 | ) | ||
| Other | 30 | 39 | ||||
| Net cash used in financing activities | (57,043 | ) | (93,609 | ) | ||
| Net increase (decrease) in cash and cash equivalents | 1,942 | (40,394 | ) | |||
| Cash and cash equivalents at beginning of the period | 97,649 | 133,813 | ||||
| Cash and cash equivalents at end of the period | $ | 99,591 | $ | 93,419 | ||
| Effect of acquisitions: | ||||||
| Assets acquired, excluding cash | $ | 6,766 | $ | — | ||
| Liabilities assumed | (128 | ) | — | |||
| Redeemable noncontrolling interest resulting from an acquisition | (6,289 | ) | — | |||
| Cash paid for acquisitions, net of cash acquired | $ | 349 | $ | — |
| Acadia Healthcare Company, Inc. | ||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Operating Statistics | ||||||||||||||||
| (Unaudited, Revenue in thousands) | ||||||||||||||||
| Three Months Ended<br><br> <br>September 30, | Nine Months Ended<br><br> <br>September 30, | |||||||||||||||
| 2023 | 2022 | %<br><br> <br>Change | 2023 | 2022 | %<br><br> <br>Change | |||||||||||
| Same Facility Results ^(1)^ | ||||||||||||||||
| Revenue | $ | 744,868 | $ | 659,336 | 13.0 | % | $ | 2,161,096 | $ | 1,920,229 | 12.5 | % | ||||
| Patient Days | 774,996 | 731,282 | 6.0 | % | 2,285,467 | 2,160,232 | 5.8 | % | ||||||||
| Admissions | 49,658 | 47,260 | 5.1 | % | 147,734 | 139,430 | 6.0 | % | ||||||||
| Average Length of Stay ^(2)^ | 15.6 | 15.5 | 0.9 | % | 15.5 | 15.5 | -0.1 | % | ||||||||
| Revenue per Patient Day | $ | 961 | $ | 902 | 6.6 | % | $ | 946 | $ | 889 | 6.4 | % | ||||
| Adjusted EBITDA margin^(3)^ | 29.8 | % | 29.6 | % | 20 bps | 29.1 | % | 28.8 | % | 30 bps | ||||||
| Adjusted EBITDA margin excluding income from provider relief fund | 29.2 | % | 28.4 | % | 80 bps | 28.9 | % | 28.0 | % | 90 bps | ||||||
| Facility Results | ||||||||||||||||
| Revenue | $ | 750,334 | $ | 666,732 | 12.5 | % | $ | 2,185,938 | $ | 1,935,104 | 13.0 | % | ||||
| Patient Days | 779,296 | 738,702 | 5.5 | % | 2,306,109 | 2,179,805 | 5.8 | % | ||||||||
| Admissions | 50,302 | 47,692 | 5.5 | % | 150,237 | 139,930 | 7.4 | % | ||||||||
| Average Length of Stay^(2)^ | 15.5 | 15.5 | 0.0 | % | 15.3 | 15.6 | -1.5 | % | ||||||||
| Revenue per Patient Day | $ | 963 | $ | 903 | 6.7 | % | $ | 948 | $ | 888 | 6.8 | % | ||||
| Adjusted EBITDA margin^(3)^ | 28.7 | % | 28.7 | % | 0 bps | 28.0 | % | 28.3 | % | -30 bps | ||||||
| Adjusted EBITDA margin excluding income from provider relief fund | 28.1 | % | 27.5 | % | 60 bps | 27.8 | % | 27.4 | % | 40 bps | ||||||
| ^(1)^ Same facility results for the periods presented include facilities we have operated for more than one year and exclude certain<br> closed services. | ||||||||||||||||
| --- | ||||||||||||||||
| ^(2)^Average length of stay is defined as patient days divided by admissions. | ||||||||||||||||
| ^(3)^For each of the three and nine months ended September 30, 2023, includes income from provider relief fund of $4.4 million. For<br> the three and nine months ended September 30, 2022, includes income from provider relief fund of $7.7 million and $16.2 million, respectively. |
| Acadia Healthcare Company, Inc. | ||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Reconciliation of Net (Loss) Income Attributable to Acadia Healthcare Company, Inc. to Adjusted EBITDA | ||||||||||||
| (Unaudited) | ||||||||||||
| Three Months Ended<br><br> <br>September 30, | Nine Months Ended<br><br> <br>September 30, | |||||||||||
| 2023 | 2022 | 2023 | 2022 | |||||||||
| (in thousands) | ||||||||||||
| Net (loss) income attributable to Acadia Healthcare Company, Inc. | $ | (217,710 | ) | $ | 71,099 | $ | (79,396 | ) | $ | 212,015 | ||
| Net income attributable to noncontrolling interests | 2,185 | 1,947 | 3,978 | 4,873 | ||||||||
| (Benefit from) provision for income taxes | (71,873 | ) | 24,056 | (29,907 | ) | 69,183 | ||||||
| Interest expense, net | 20,742 | 18,003 | 61,651 | 50,355 | ||||||||
| Depreciation and amortization | 33,388 | 29,573 | 96,969 | 87,627 | ||||||||
| EBITDA | (233,268 | ) | 144,678 | 53,295 | 424,053 | |||||||
| Adjustments: | ||||||||||||
| Equity-based compensation expense (a) | 8,163 | 7,240 | 23,140 | 21,745 | ||||||||
| Transaction-related expenses (b) | 11,247 | 10,859 | 26,792 | 18,381 | ||||||||
| Legal settlements expense (c) | 394,181 | — | 394,181 | — | ||||||||
| Loss on impairment (d) | — | — | 8,694 | — | ||||||||
| Adjusted EBITDA | $ | 180,323 | $ | 162,777 | $ | 506,102 | $ | 464,179 | ||||
| Adjusted EBITDA margin | 24.0 | % | 24.4 | % | 23.2 | % | 24.0 | % | ||||
| Adjusted EBITDA excluding income from provider relief fund | $ | 175,881 | $ | 155,121 | $ | 501,660 | $ | 447,973 | ||||
| Adjusted EBITDA margin excluding income from provider relief fund | 23.4 | % | 23.3 | % | 22.9 | % | 23.1 | % | ||||
| See footnotes on page 11. |
| Acadia Healthcare Company, Inc. | ||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Reconciliation of Net (Loss) Income Attributable to Acadia Healthcare Company, Inc. to | ||||||||||||
| Adjusted Income Attributable to Acadia Healthcare Company, Inc. | ||||||||||||
| (Unaudited) | ||||||||||||
| Three Months Ended<br><br> <br>September 30, | Nine Months Ended<br><br> <br>September 30, | |||||||||||
| 2023 | 2022 | 2023 | 2022 | |||||||||
| (in thousands, except per share amounts) | ||||||||||||
| Net (loss) income attributable to Acadia Healthcare Company, Inc. | $ | (217,710 | ) | $ | 71,099 | $ | (79,396 | ) | $ | 212,015 | ||
| Adjustments to income: | ||||||||||||
| Transaction-related expenses (b) | 11,247 | 10,859 | 26,792 | 18,381 | ||||||||
| Legal settlements expense (c) | 394,181 | — | 394,181 | — | ||||||||
| Loss on impairment (d) | — | — | 8,694 | — | ||||||||
| (Benefit from) provision for income taxes | (71,873 | ) | 24,056 | (29,907 | ) | 69,183 | ||||||
| Adjusted income before income taxes attributable to Acadia Healthcare Company, Inc. | 115,845 | 106,014 | 320,364 | 299,579 | ||||||||
| Income tax effect of adjustments to income (e) | 28,756 | 27,148 | 79,947 | 76,662 | ||||||||
| Adjusted income attributable to Acadia Healthcare Company, Inc. | 87,089 | 78,866 | 240,417 | 222,917 | ||||||||
| Income from provider relief fund, net of taxes | (3,237 | ) | (5,579 | ) | (3,237 | ) | (11,809 | ) | ||||
| Adjusted income attributable to Acadia Healthcare Company, Inc. excluding income from provider relief fund | $ | 83,852 | $ | 73,287 | $ | 237,180 | $ | 211,108 | ||||
| Weighted-average shares outstanding - diluted (f) | 91,655 | 91,723 | 91,684 | 91,668 | ||||||||
| Adjusted income attributable to Acadia Healthcare Company, Inc. per diluted share | $ | 0.95 | $ | 0.86 | $ | 2.62 | $ | 2.43 | ||||
| Income from provider relief fund, net of taxes, per diluted share | (0.04 | ) | (0.06 | ) | (0.04 | ) | (0.13 | ) | ||||
| Adjusted income attributable to Acadia Healthcare Company, Inc., excluding income from provider relief fund, per diluted share | $ | 0.91 | $ | 0.80 | $ | 2.58 | $ | 2.30 | ||||
| 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<br> and regulations promulgated by the SEC. These non-GAAP financial measures include, and are defined, as follows: |
| • EBITDA: net (loss) income attributable to Acadia Healthcare Company, Inc. adjusted for net income attributable to<br> noncontrolling interests, (benefit from) provision for income taxes, net interest expense and depreciation and amortization. |
| • Adjusted EBITDA: EBITDA adjusted for equity-based compensation expense, loss on impairment, legal settlements expense and<br> transaction-related expenses. |
| • Adjusted EBITDA excluding income from provider relief fund: Adjusted EBITDA adjusted for income from provider relief fund. |
| • Adjusted EBITDA margin: Adjusted EBITDA divided by revenue. |
| • Adjusted EBITDA margin excluding income from provider relief fund: Adjusted EBITDA excluding income from provider relief fund<br> divided by revenue. |
| • Adjusted income before income taxes attributable to Acadia Healthcare Company, Inc.: net (loss) income attributable to Acadia<br> Healthcare Company, Inc. adjusted for transaction-related expenses, loss on impairment, legal settlements expense and (benefit from) provision for income taxes. |
| • Adjusted income attributable to Acadia Healthcare Company, Inc.: Adjusted income before income taxes attributable to Acadia<br> Healthcare Company, Inc. adjusted for the income tax effect of adjustments to income. |
| • Adjusted income attributable to Acadia Healthcare Company, Inc. excluding income from provider relief fund: Adjusted income<br> attributable to Acadia Healthcare Company, Inc. adjusted for income from provider relief fund. |
| The non-GAAP financial measures presented herein are supplemental measures of our performance and are not required by, or presented in accordance with, generally<br> 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<br> 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<br> 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<br> 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<br> 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<br> 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<br> 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<br> 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<br> similar costs. |
| (c) Represents legal settlements expense related to the Desert Hills litigation. |
| (d) During the second quarter of 2023, we recorded non-cash impairment charges totaling $8.7 million related to the closure of certain facilities. |
| (e) Represents the income tax effect of adjustments to income based on tax rates of 24.8% and 25.6% for the three months ended September 30, 2023 and 2022,<br> respectively, and 25.0% and 25.6% for the nine months ended September 30, 2023 and 2022, respectively. |
| (f) For the three and nine months ended September 30, 2023, approximately 0.5 million and 0.8 million, respectively, outstanding shares of restricted stock and<br> shares of common stock issuable upon exercise of outstanding stock option awards have been included in the calculation of weighted-average shares outstanding-diluted. These shares are excluded from the calculation of diluted earnings<br> per share in the condensed consolidated statement of operations because the net loss for the three and nine months ended September 30, 2023 causes such securities to be anti-dilutive. |
Contacts
Gretchen Hommrich
Vice President, Investor Relations
\(615\) 861-6000