Acadia Healthcare Reports Strong Third Quarter 2024 Results

About this update from Acadia Healthcare Company, Inc.

Provides Updated Guidance for 2024 FRANKLIN, Tenn. --(BUSINESS WIRE)-- Acadia Healthcare Company, Inc. (NASDAQ: ACHC) today announced financial results for the third quarter and nine months ended September 30, 2024 . Third Quarter Highlights Revenue totaled $815.6 million , an increase of 8.7% over the third quarter of 2023 Same facility revenue increased 8.6% compared with the third quarter of 2023, including an increase in revenue per patient day of 3.6% and an increase in patient days of 4.7% Net income attributable to Acadia totaled $68.1 million , or $0.74 per diluted share Adjusted income attributable to Acadia totaled $84.1 million , or $0.91 per diluted share Adjusted EBITDA totaled $194.3 million , an increase of 10.5% over the third quarter of 2023, excluding provider relief funds Same facility adjusted EBITDA margin increased 100 bps to 29.7% over the third quarter of 2023 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. Third Quarter Results Chris Hunter , Chief Executive Officer of Acadia Healthcare Company , remarked, “Our financial results for the third quarter of 2024 reflect continued execution of our growth strategy. We have the scale and expertise to support patients across the continuum of care. We are proud of the important work we are doing and are committed to providing safe, quality care for the patients, families and communities we serve while creating long-term value for our stockholders.” Strategic Investments for Long-Term Growth During the third quarter of 2024, the Company continued to make progress in meeting its strategic growth objectives. This includes the addition of 15 beds to existing facilities and the addition of five new CTCs during the quarter. With these additions, Acadia now operates 164 CTCs across 32 states treating over 72,000 patients daily and remains on track to open up to 14 new CTCs for the full year. In the first nine months of the year, the Company opened 79 new beds at existing facilities. For the full year, the Company expects to open over 400 new beds at existing facilities, including over 300 beds expected in the fourth quarter. In the first nine months of the year, the Company also opened two new facilities, totaling 120 beds. The Company remains on pace to complete construction on several additional new wholly owned and joint venture facilities, totaling nearly 700 new beds in the fourth quarter, including joint venture hospitals in partnership with Henry Ford Health in Detroit, Michigan , and Intermountain Health in Denver, Colorado , as well as a new de novo facility in Madison, Wisconsin , which was completed in October. The number of new beds available to serve patients by the end of the fourth quarter is subject to the timing of anticipated state-issued licenses. 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 Maintaining a strong financial position to support growth investments and disciplined capital allocation are top priorities for Acadia. As of September 30, 2024 , the Company had $82.1 million in cash and cash equivalents and $321.5 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 third quarter(2). 2024 Guidance Range Revenue(1) $3.150 to $3.165 billion Adjusted EBITDA(1) $725 to $735 million Adjusted earnings per diluted share(1) $3.35 to $3.45 Interest expense $110 to $120 million Tax rate 24.5% to 25.5% Depreciation and amortization expense $145 to $155 million Stock compensation expense $40 to $45 million Operating cash flows $525 to $550 million Expansion capital expenditures $550 to $595 million Maintenance and IT capital expenditures $95 to $105 million Total bed additions, excluding acquisitions(3) 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 was received in the first quarter of 2024 and the remainder in the third quarter of 2024. (2) Prior full-year guidance assumed approximately $17 million of revenue and approximately $1 million of EBITDA contribution in the second half of the year from facilities that were closed during the third quarter. (3) Company anticipates completing construction on approximately 1,200 beds, of which approximately 1,000 are expected to be licensed and available to serve patients by year end, with the remaining beds expected to receive licensure in the first quarter. The exact number of beds available to serve patients at year end will depend on timing of anticipated required licenses. 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 third quarter financial results at 8:00 a.m. Central Time / 9:00 a.m. Eastern Time on Thursday, October 31, 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 September 30, 2024 , Acadia operated a network of 260 behavioral healthcare facilities with approximately 11,300 beds in 38 states and Puerto Rico . With approximately 23,500 employees serving more than 80,000 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 September 30 , Nine Months Ended September 30 , 2024 2023 2024 2023 (In thousands, except per share amounts) Revenue $ 815,634 $ 750,334 $ 2,379,725 $ 2,185,938 Salaries, wages and benefits (including equity-based compensation expense of $9,467 , $8,163 , $27,014 and $23,140 , respectively) 428,147 394,150 1,265,427 1,171,960 Professional fees 48,498 45,540 142,236 130,468 Supplies 29,623 27,147 84,153 79,312 Rents and leases 12,389 11,731 36,141 34,880 Other operating expenses 112,137 104,048 322,900 290,798 Income from provider relief fund — (4,442 ) — (4,442 ) Depreciation and amortization 37,641 33,388 110,054 96,969 Interest expense, net 29,924 20,742 86,297 61,651 Legal settlements expense — 394,181 — 394,181 Loss on impairment 10,459 — 11,459 8,694 Transaction, legal and other costs 8,249 11,247 17,187 26,792 Total expenses 717,067 1,037,732 2,075,854 2,291,263 Income (loss) before income taxes 98,567 (287,398 ) 303,871 (105,325 ) Provision for (benefit from) income taxes 27,199 (71,873 ) 72,916 (29,907 ) Net income (loss) 71,368 (215,525 ) 230,955 (75,418 ) Net income attributable to noncontrolling interests (3,236 ) (2,185 ) (7,958 ) (3,978 ) Net income (loss) attributable to Acadia Healthcare Company, Inc. $ 68,132 $ (217,710 ) $ 222,997 $ (79,396 ) Earnings (loss) per share attributable to Acadia Healthcare Company, Inc. stockholders: Basic $ 0.74 $ (2.39 ) $ 2.44 $ (0.87 ) Diluted $ 0.74 $ (2.39 ) $ 2.42 $ (0.87 ) Weighted-average shares outstanding: Basic 91,720 91,168 91,571 90,852 Diluted 92,188 91,168 92,119 90,852 Acadia Healthcare Company, Inc. Condensed Consolidated Balance Sheets (Unaudited) September 30 , December 31 , 2024 2023 (In thousands) ASSETS Current assets: Cash and cash equivalents $ 82,145 $ 100,073 Accounts receivable, net 383,945 361,451 Other current assets 185,972 134,476 Total current assets 652,062 596,000 Property and equipment, net 2,679,807 2,266,610 Goodwill 2,264,851 2,225,962 Intangible assets, net 73,139 73,278 Deferred tax assets 2,706 6,658 Operating lease right-of-use assets 122,771 117,780 Other assets 75,121 72,553 Total assets $ 5,870,457 $ 5,358,841 LIABILITIES AND EQUITY Current liabilities: Current portion of long-term debt $ 71,694 $ 29,219 Accounts payable 201,379 156,132 Accrued salaries and benefits 141,470 141,901 Current portion of operating lease liabilities 27,175 26,268 Other accrued liabilities 167,782 532,261 Total current liabilities 609,500 885,781 Long-term debt 1,804,825 1,342,548 Deferred tax liabilities 54,112 1,931 Operating lease liabilities 105,437 100,808 Other liabilities 150,544 140,113 Total liabilities 2,724,418 2,471,181 Redeemable noncontrolling interests 114,521 105,686 Equity: Common stock 918 913 Additional paid-in capital 2,675,882 2,649,340 Retained earnings 354,718 131,721 Total equity 3,031,518 2,781,974 Total liabilities and equity $ 5,870,457 $ 5,358,841 Acadia Healthcare Company, Inc. Condensed Consolidated Statements of Cash Flows (Unaudited) Nine Months Ended September 30 , 2024 2023 (In thousands) Operating activities: Net income (loss) $ 230,955 $ (75,418 ) Adjustments to reconcile net income (loss) to net cash provided by operating activities: Depreciation and amortization 110,054 96,969 Amortization of debt issuance costs 3,061 2,485 Equity-based compensation expense 27,014 23,140 Deferred income taxes 56,133 (21,655 ) Legal settlements expense — 394,181 Loss on impairment 11,459 8,694 Other (3,988 ) 1,423 Change in operating assets and liabilities, net of effect of acquisitions: Accounts receivable, net (20,936 ) (40,227 ) Other current assets (3,334 ) (77,165 ) Other assets 676 309 Accounts payable and other accrued liabilities (404,942 ) 23,057 Accrued salaries and benefits (1,841 ) (3,038 ) Other liabilities 8,681 17,723 Government relief funds — (4,442 ) Net cash provided by operating activities 12,992 346,036 Investing activities: Cash paid for acquisitions, net of cash acquired (53,550 ) (349 ) Cash paid for capital expenditures (486,891 ) (285,410 ) Proceeds from sale of property and equipment 10,227 633 Other (2,935 ) (1,925 ) Net cash used in investing activities (533,149 ) (287,051 ) Financing activities: Borrowings on long-term debt 350,000 — Borrowings on revolving credit facility 210,000 40,000 Principal payments on revolving credit facility (15,000 ) (35,000 ) Principal payments on long-term debt (40,968 ) (15,938 ) Payment of debt issuance costs (1,518 ) — Repurchase of shares for payroll tax withholding, net of proceeds from stock option exercises (824 ) (45,193 ) Contributions from noncontrolling partners in joint ventures 3,500 2,538 Distributions to noncontrolling partners in joint ventures (2,972 ) (3,480 ) Other 11 30 Net cash provided by (used in) financing activities 502,229 (57,043 ) Net (decrease) increase in cash and cash equivalents (17,928 ) 1,942 Cash and cash equivalents at beginning of the period 100,073 97,649 Cash and cash equivalents at end of the period $ 82,145 $ 99,591 $ - $ - Effect of acquisitions: Assets acquired, excluding cash $ 59,235 $ 6,766 Liabilities assumed (4,185 ) (128 ) Contingent consideration issued in connection with an acquisition (1,500 ) — Redeemable noncontrolling interest resulting from an acquisition — (6,289 ) Cash paid for acquisitions, net of cash acquired $ 53,550 $ 349 Acadia Healthcare Company, Inc. Operating Statistics (Unaudited, Revenue in thousands) Three Months Ended September 30 , Nine Months Ended September 30 , 2024 2023 % Change 2024 2023 % Change Same Facility Results (1) Revenue $ 802,555 $ 739,335 8.6 % $ 2,334,956 $ 2,148,408 8.7 % Patient Days 800,880 764,703 4.7 % 2,332,369 2,260,513 3.2 % Admissions 50,368 49,397 2.0 % 147,617 147,130 0.3 % Average Length of Stay (2) 15.9 15.5 2.7 % 15.8 15.4 2.8 % Revenue per Patient Day $ 1,002 $ 967 3.6 % $ 1,001 $ 950 5.3 % Adjusted EBITDA margin (3) 29.7 % 29.3 % 40 bps 29.3 % 28.8 % 50 bps Adjusted EBITDA margin excluding income from provider relief fund 29.7 % 28.7 % 100 bps 29.3 % 28.6 % 70 bps Facility Results Revenue $ 815,634 $ 750,334 8.7 % $ 2,379,725 $ 2,185,938 8.9 % Patient Days 815,126 779,296 4.6 % 2,375,477 2,306,109 3.0 % Admissions 51,513 50,302 2.4 % 151,082 150,237 0.6 % Average Length of Stay (2) 15.8 15.5 2.1 % 15.7 15.3 2.4 % Revenue per Patient Day $ 1,001 $ 963 3.9 % $ 1,002 $ 948 5.7 % Adjusted EBITDA margin (3) 28.2 % 28.7 % -50 bps 27.9 % 28.0 % -10 bps Adjusted EBITDA margin excluding income from provider relief fund 28.2 % 28.1 % 10 bps 27.9 % 27.8 % 10 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. (3) For each of the three and nine months ended September 30, 2023 , includes income from provider relief fund of $4.4 million . Acadia Healthcare Company, Inc. Reconciliation of Net Income Attributable to Acadia Healthcare Company, Inc. to Adjusted EBITDA (Unaudited) Three Months Ended September 30 , Nine Months Ended September 30 , 2024 2023 2024 2023 (in thousands) Net income (loss) attributable to Acadia Healthcare Company, Inc. $ 68,132 $ (217,710 ) $ 222,997 $ (79,396 ) Net income attributable to noncontrolling interests 3,236 2,185 7,958 3,978 Provision for (benefit from) income taxes 27,199 (71,873 ) 72,916 (29,907 ) Interest expense, net 29,924 20,742 86,297 61,651 Depreciation and amortization 37,641 33,388 110,054 96,969 EBITDA 166,132 (233,268 ) 500,222 53,295 Adjustments: Equity-based compensation expense (a) 9,467 8,163 27,014 23,140 Transaction, legal and other costs (b) 8,249 11,247 17,187 26,792 Legal settlements expense (c) — 394,181 — 394,181 Loss on impairment (d) 10,459 — 11,459 8,694 Adjusted EBITDA $ 194,307 $ 180,323 $ 555,882 $ 506,102 Adjusted EBITDA margin 23.8 % 24.0 % 23.4 % 23.2 % Income from provider relief fund — (4,442 ) — (4,442 ) Adjusted EBITDA excluding income from provider relief fund $ 194,307 $ 175,881 $ 555,882 $ 501,660 Adjusted EBITDA margin excluding income from provider relief fund 23.8 % 23.4 % 23.4 % 22.9 % See footnotes on page 10. 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 September 30 , Nine Months Ended September 30 , 2024 2023 2024 2023 (in thousands, except per share amounts) Net income (loss) attributable to Acadia Healthcare Company, Inc. $ 68,132 $ (217,710 ) $ 222,997 $ (79,396 ) Adjustments to income: Transaction, legal and other costs (b) 8,249 11,247 17,187 26,792 Legal settlements expense (c) — 394,181 — 394,181 Loss on impairment (d) 10,459 — 11,459 8,694 Provision for (benefit from) income taxes 27,199 (71,873 ) 72,916 (29,907 ) Adjusted income before income taxes attributable to Acadia Healthcare Company, Inc. 114,039 115,845 324,559 320,364 Income tax effect of adjustments to income (e) 29,960 28,756 79,614 79,947 Adjusted income attributable to Acadia Healthcare Company, Inc. 84,079 87,089 244,945 240,417 Income from provider relief fund, net of taxes — (3,237 ) — (3,237 ) Adjusted income attributable to Acadia Healthcare Company, Inc. excluding income from provider relief fund $ 84,079 $ 83,852 $ 244,945 $ 237,180 Weighted-average shares outstanding - diluted (f) 92,188 91,655 92,119 91,684 Adjusted income attributable to Acadia Healthcare Company, Inc. per diluted share $ 0.91 $ 0.95 $ 2.66 $ 2.62 Income from provider relief fund, net of taxes, per diluted share — (0.04 ) — (0.04 ) Adjusted income attributable to Acadia Healthcare Company, Inc. , excluding income from provider relief fund, per diluted share $ 0.91 $ 0.91 $ 2.66 $ 2.58 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 (loss) attributable to Acadia Healthcare Company, Inc. adjusted for net income attributable to noncontrolling interests, provision for (benefit from) income taxes, net interest expense and depreciation and amortization. • Adjusted EBITDA : EBITDA adjusted for equity-based compensation expense, transaction, legal and other costs, legal settlements expense and loss on impairment. • 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 divided by revenue. • Adjusted income before income taxes attributable to Acadia Healthcare Company, Inc. : net income (loss) attributable to Acadia Healthcare Company, Inc. adjusted for transaction, legal and other costs, legal settlements expense, loss on impairment and provision for (benefit from) 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. • Adjusted income attributable to Acadia Healthcare Company, Inc. excluding income from provider relief fund : Adjusted income attributable to Acadia Healthcare Company, Inc. adjusted for income from provider relief fund. • Net leverage ratio : Long-term debt (excluding $9.7 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, government investigations, management transition, termination, restructuring, acquisition and other similar costs. (c) Represents legal settlements expense related to the Desert Hills litigation. (d) Represents non-cash impairment charges related to the closure of certain facilities. (e) Represents the income tax effect of adjustments to income based on tax rates of 26.3% and 24.8% for the three months ended September 30, 2024 and 2023, respectively, and 24.5% and 25.0% for the nine months ended September 30, 2024 and 2023, respectively. (f) For the three and nine months ended September 30, 2023 , approximately 0.5 million and 0.8 million outstanding shares of restricted stock and shares of common stock issuable upon exercise of outstanding stock option awards, respectively, have been included in the calculation of weighted-average shares outstanding-diluted. These shares are excluded from the calculation of diluted earnings 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. View source version on businesswire.com : https://www.businesswire.com/news/home/20241030593005/en/ Investor Contact: Patrick Feeley Senior Vice President, Investor Relations (615) 861-6000 Source: Acadia Healthcare Company, Inc.

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