Full Press Release Details
Healthcare Reports 33.3% Growth in First Quarter Adjusted EPS to $0.28
on 24.9% Increase in Revenue
2014 Adjusted Earnings Guidance in Range of $1.26 to $1.29 per Diluted
FRANKLIN, Tenn.--(BUSINESS WIRE)--April 29, 2014--Acadia Healthcare
Company, Inc. (NASDAQ: ACHC) today announced financial results for the
first quarter ended March 31, 2014. Revenue increased 24.9% for the
quarter to $201.4 million from $161.2 million for the first quarter of
2013. Income from continuing operations was $13.0 million, or $0.26 per
diluted share, for the first quarter of 2014 compared with $4.1 million,
or $0.08 per diluted share, for the first quarter of 2013. Adjusted
income from continuing operations rose 32.5% to $14.0 million for the
first quarter of 2014 from $10.6 million for the first quarter of 2013,
while adjusted income from continuing operations per diluted share
increased 33.3% to $0.28 from $0.21 for the comparable prior-year
quarter. The adjusted results exclude transaction-related expenses of
$1.6 million and $1.5 million for the first quarter of 2014 and 2013,
respectively, and debt extinguishment costs of $9.4 million for the
first quarter of 2013. A reconciliation of all GAAP and non-GAAP
financial results in this release is on pages 7 and 8.
"Acadia produced strong operating and financial results for the first
quarter of 2014 compared with the first quarter last year," remarked
Joey Jacobs, Chairman and Chief Executive Officer of Acadia. "Our
revenue growth primarily reflected the addition of 784 licensed beds to
the Company's operations in the 12 months ended March 31, 2014. Nearly
500 of these beds came to Acadia through the acquisition of six
inpatient facilities during this 12-month period, including the
acquisition of a 68-bed acute inpatient psychiatric facility in
Riverside, California, in January 2014. The remainder of the bed
additions reflected organic bed expansion primarily at existing
facilities, including 122 beds added in the first quarter of 2014, as
well as through the opening of two de novo facilities.
"The Company's same facility revenue increased 9.9% for the first
quarter of 2014 compared with the same quarter in 2013, largely due to
the new beds added to the same facility base, complemented by our
initiatives to generate additional revenues in each facility.
Contributing to same facility revenue growth, our patient days increased
7.4% for the first quarter and revenue per patient day increased 2.3%.
Our strong same facility revenue growth produced significant operating
leverage for the quarter, which, combined with increased operating
efficiencies, drove a 290 basis point expansion in our same facility
EBITDA margin to 26.0% for the first quarter this year from 23.1% for
the first quarter last year. Our adjusted consolidated EBITDA increased
28.6% for the first quarter of 2014 to $39.3 million, or 19.5% of
revenue, from $30.5 million, or 18.9% of revenue, for the first quarter
"We remain well positioned to finance our 2014 growth strategies. At the
end of the first quarter, our availability under our revolving credit
facility was approximately $206 million, and our ratio of total net debt
to trailing 12 months adjusted EBITDA was 4.2. We also expect to
continue to generate significant net cash from continuing operations for
2014, and our net cash flow from continuing operations for the first
quarter was $7.3 million."
Acadia today affirmed its guidance for 2014 adjusted earnings per
diluted share in a range of $1.26 to $1.29. The Company's guidance does
not include the impact of any future acquisitions or transaction-related
Acadia will hold a conference call to discuss its first quarter
financial results at 9:00 a.m. Eastern Time on Wednesday, April 30,
2014. 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 through May 13, 2014.
This news 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 news 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) Acadia's
ability to complete acquisitions and successfully integrate the
operations of the acquired facilities; (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 the government and third-party payors; (iv) the
risk that Acadia may not generate sufficient cash from operations to
service its debt and meet its working capital and capital expenditure
requirements; and (v) potential operating difficulties, client
preferences, changes in competition and general economic or industry
conditions that may prevent Acadia from realizing the expected benefits
of its business strategy. These factors and others are more fully
described in Acadia's periodic reports and other filings with the SEC.
Acadia is a provider of inpatient behavioral healthcare services. Acadia
operates a network of 52 behavioral healthcare facilities with more than
4,300 licensed beds in 24 states and Puerto Rico. Acadia provides
psychiatric and chemical dependency services to its patients in a
variety of settings, including inpatient psychiatric hospitals,
residential treatment centers, outpatient clinics and therapeutic
school-based programs.
| Acadia Healthcare Company, Inc. | ||||||||
| Condensed Consolidated Statements of Operations | ||||||||
| (Unaudited) | ||||||||
| Three Months Ended March 31, | ||||||||
| 2014 | 2013 | |||||||
| (in thousands, except per share amounts) | ||||||||
| Revenue before provision for doubtful accounts | $ | 206,119 | $ | 165,705 | ||||
| Provision for doubtful accounts | (4,701 | ) | (4,492 | ) | ||||
| Revenue | 201,418 | 161,213 | ||||||
| Salaries, wages and benefits (including equity-based compensation expense of $1,764 and $601, respectively) | 117,575 | 94,351 | ||||||
| Professional fees | 10,382 | 9,014 | ||||||
| Supplies | 10,064 | 8,598 | ||||||
| Rents and leases | 2,769 | 2,327 | ||||||
| Other operating expenses | 23,110 | 16,983 | ||||||
| Depreciation and amortization | 5,436 | 3,622 | ||||||
| Interest expense, net | 9,707 | 8,762 | ||||||
| Debt extinguishment costs | - | 9,350 | ||||||
| Transaction-related expenses | 1,579 | 1,474 | ||||||
| Total expenses | 180,622 | 154,481 | ||||||
| Income from continuing operations before income taxes | 20,796 | 6,732 | ||||||
| Provision for income taxes | 7,775 | 2,678 | ||||||
| Income from continuing operations | 13,021 | 4,054 | ||||||
| Income (loss) from discontinued operations, net of income taxes | 37 | (316 | ) | |||||
| Net income | $ | 13,058 | $ | 3,738 | ||||
| Basic earnings per share: | ||||||||
| Income from continuing operations | $ | 0.26 | $ | 0.08 | ||||
| Income (loss) from discontinued operations | - | (0.01 | ) | |||||
| Net income | $ | 0.26 | $ | 0.07 | ||||
| Diluted earnings per share: | ||||||||
| Income from continuing operations | $ | 0.26 | $ | 0.08 | ||||
| Income (loss) from discontinued operations | - | (0.01 | ) | |||||
| Net income | $ | 0.26 | $ | 0.07 | ||||
| Weighted-average shares outstanding: | ||||||||
| Basic | 50,120 | 49,911 | ||||||
| Diluted | 50,486 | 50,250 |
| Acadia Healthcare Company, Inc. | ||||||
| Condensed Consolidated Balance Sheets | ||||||
| (Unaudited) | ||||||
| March 31, | December 31, | |||||
| 2014 | 2013 | |||||
| (In thousands) | ||||||
| ASSETS | ||||||
| Current assets: | ||||||
| Cash and cash equivalents | $ | 7,243 | $ | 4,569 | ||
| Accounts receivable, net of allowance for doubtful accounts of $17,689 and $18,345, respectively | 104,585 | 95,885 | ||||
| Deferred tax assets | 17,029 | 15,703 | ||||
| Other current assets | 28,180 | 28,969 | ||||
| Total current assets | 157,037 | 145,126 | ||||
| Property and equipment, net | 403,366 | 370,109 | ||||
| Goodwill | 665,421 | 661,549 | ||||
| Intangible assets, net | 20,730 | 20,568 | ||||
| Deferred tax assets - noncurrent | 4,325 | - | ||||
| Other assets | 32,066 | 27,307 | ||||
| Total assets | $ | 1,282,945 | $ | 1,224,659 | ||
| LIABILITIES AND EQUITY | ||||||
| Current liabilities: | ||||||
| Current portion of long-term debt | $ | 9,570 | $ | 15,195 | ||
| Accounts payable | 28,405 | 36,026 | ||||
| Accrued salaries and benefits | 32,257 | 37,721 | ||||
| Other accrued liabilities | 27,673 | 25,748 | ||||
| Total current liabilities | 97,905 | 114,690 | ||||
| Long-term debt | 653,626 | 601,941 | ||||
| Deferred tax liabilities - noncurrent | 15,399 | 7,971 | ||||
| Other liabilities | 19,865 | 19,347 | ||||
| Total liabilities | 786,795 | 743,949 | ||||
| Equity: | ||||||
| Common stock | 502 | 501 | ||||
| Additional paid-in capital | 464,188 | 461,807 | ||||
| Retained earnings | 31,460 | 18,402 | ||||
| Total equity | 496,150 | 480,710 | ||||
| Total liabilities and equity | $ | 1,282,945 | $ | 1,224,659 |
| Acadia Healthcare Company, Inc. | ||||||||
| Condensed Consolidated Statements of Cash Flows | ||||||||
| (Unaudited) | ||||||||
| Three Months Ended March 31, | ||||||||
| 2014 | 2013 | |||||||
| (In thousands) | ||||||||
| Operating activities: | ||||||||
| Net income | $ | 13,058 | $ | 3,738 | ||||
| Adjustments to reconcile net income to net cash provided by continuing operating activities: | ||||||||
| Depreciation and amortization | 5,436 | 3,622 | ||||||
| Amortization of debt issuance costs | 644 | 540 | ||||||
| Equity-based compensation expense | 1,764 | 601 | ||||||
| Deferred income tax expense | 2,231 | 2,455 | ||||||
| (Income) loss from discontinued operations, net of taxes | (37 | ) | 316 | |||||
| Debt extinguishment costs | - | 9,350 | ||||||
| Other | 13 | 15 | ||||||
| Change in operating assets and liabilities, net of effect of acquisitions: | ||||||||
| Accounts receivable, net | (8,694 | ) | (9,522 | ) | ||||
| Other current assets | 952 | (1,072 | ) | |||||
| Other assets | (1,576 | ) | (850 | ) | ||||
| Accounts payable and other accrued liabilities | (1,839 | ) | (997 | ) | ||||
| Accrued salaries and benefits | (5,407 | ) | (6,717 | ) | ||||
| Other liabilities | 770 | (271 | ) | |||||
| Net cash provided by continuing operating activities | 7,315 | 1,208 | ||||||
| Net cash provided by (used in) discontinued operating activities | 31 | (267 | ) | |||||
| Net cash provided by operating activities | 7,346 | 941 | ||||||
| Investing activities: | ||||||||
| Cash paid for acquisitions, net of cash acquired | (10,000 | ) | (22,375 | ) | ||||
| Cash paid for capital expenditures | (21,649 | ) | (12,764 | ) | ||||
| Cash paid for real estate acquisitions | (16,097 | ) | - | |||||
| Other | (178 | ) | (133 | ) | ||||
| Net cash used in investing activities | (47,924 | ) | (35,272 | ) | ||||
| Financing activities: | ||||||||
| Borrowings on long-term debt | 7,500 | 150,000 | ||||||
| Borrowings on revolving credit facility | 40,500 | - | ||||||
| Principal payments on long-term debt | (1,875 | ) | (1,875 | ) | ||||
| Repayment of long-term debt | - | (52,500 | ) | |||||
| Payment of debt issuance costs | (3,491 | ) | (4,153 | ) | ||||
| Payment of premium on note redemption | - | (6,759 | ) | |||||
| Common stock withheld for minimum statutory taxes, net | (2,112 | ) | (641 | ) | ||||
| Excess tax benefit from equity awards | 2,730 | 635 | ||||||
| Net cash provided by financing activities | 43,252 | 84,707 | ||||||
| Net increase in cash and cash equivalents | 2,674 | 50,376 | ||||||
| Cash and cash equivalents at beginning of the period | 4,569 | 49,399 | ||||||
| Cash and cash equivalents at end of the period | $ | 7,243 | $ | 99,775 | ||||
| Effect of acquisitions: | ||||||||
| Assets acquired, excluding cash | $ | 10,500 | $ | 43,330 | ||||
| Liabilities assumed | - | (9,271 | ) | |||||
| Prior year deposits paid for acquisitions | (500 | ) | (11,684 | ) | ||||
| Cash paid for acquisitions, net of cash acquired | $ | 10,000 | $ | 22,375 |
| Acadia Healthcare Company, Inc. | |||||||||||
| Operating Statistics | |||||||||||
| (Unaudited) | |||||||||||
| (Revenue in thousands) | |||||||||||
| Three Months Ended March 31, | |||||||||||
| 2014 | 2013 | % Change | |||||||||
| Same Facility Results | |||||||||||
| Revenue | $ | 176,411 | $ | 160,554 | 9.9 | % | |||||
| Patient Days | 264,622 | 246,276 | 7.4 | % | |||||||
| Admissions | 14,096 | 12,869 | 9.5 | % | |||||||
| Average Length of Stay (a) | 18.8 | 19.1 | -1.9 | % | |||||||
| Revenue per Patient Day | $ | 667 | $ | 652 | 2.3 | % | |||||
| EBITDA margin | 26.0 | % | 23.1 | % | 290 bps | ||||||
| Total Facility Results | |||||||||||
| Revenue | $ | 200,564 | $ | 160,554 | 24.9 | % | |||||
| Patient Days | 297,057 | 246,276 | 20.6 | % | |||||||
| Admissions | 17,918 | 12,869 | 39.2 | % | |||||||
| Average Length of Stay (a) | 16.6 | 19.1 | -13.4 | % | |||||||
| Revenue per Patient Day | $ | 675 | $ | 652 | 3.6 | % | |||||
| EBITDA margin | 23.7 | % | 23.1 | % | 60 bps | ||||||
| (a) Average length of stay is defined as patient days divided by admissions. |
| Acadia Healthcare Company, Inc. | |||||||
| Reconciliation of Net Income to Adjusted EBITDA | |||||||
| (Unaudited) | |||||||
| Three Months Ended March 31, | |||||||
| 2014 | 2013 | ||||||
| (in thousands) | |||||||
| Net income | $ | 13,058 | $ | 3,738 | |||
| (Income) loss from discontinued operations | (37 | ) | 316 | ||||
| Provision for income taxes | 7,775 | 2,678 | |||||
| Interest expense, net | 9,707 | 8,762 | |||||
| Depreciation and amortization | 5,436 | 3,622 | |||||
| EBITDA | 35,939 | 19,116 | |||||
| Adjustments: | |||||||
| Equity-based compensation expense (a) | 1,764 | 601 | |||||
| Debt extinguishment costs (b) | - | 9,350 | |||||
| Transaction-related expenses (c) | 1,579 | 1,474 | |||||
| Adjusted EBITDA | $ | 39,282 | $ | 30,541 | |||
| See footnotes on page 9. |
| Acadia Healthcare Company, Inc. | ||||||||
| Reconciliation of Adjusted Income from Continuing Operations to Income from | ||||||||
| Continuing Operations | ||||||||
| (Unaudited) | ||||||||
| Three Months Ended March 31, | ||||||||
| 2014 | 2013 | |||||||
| (in thousands, except per share amounts) | ||||||||
| Income from continuing operations | $ | 13,021 | $ | 4,054 | ||||
| Provision for income taxes | 7,775 | 2,678 | ||||||
| Income from continuing operations before income taxes | 20,796 | 6,732 | ||||||
| Adjustments to income from continuing operations: | ||||||||
| Debt extinguishment costs (b) | - | 9,350 | ||||||
| Transaction-related expenses (c) | 1,579 | 1,474 | ||||||
| Income tax provision reflecting tax effect of adjustments to income from continuing operations (d) | (8,366 | ) | (6,984 | ) | ||||
| Adjusted income from continuing operations | $ | 14,009 | $ | 10,572 | ||||
| Weighted-average shares outstanding - diluted | 50,486 | 50,250 | ||||||
| Adjusted income from continuing operations per diluted share | $ | 0.28 | $ | 0.21 | ||||
| See footnotes on page 9. |
| Footnotes | |
| We have included certain financial measures in this press release, including EBITDA, Adjusted EBITDA and Adjusted income from continuing operations, which are "non-GAAP financial measures" as defined under the rules and regulations promulgated by the SEC. We define EBITDA as net income adjusted for loss (income) from discontinued operations, net interest expense, income tax provision and depreciation and amortization. We define Adjusted EBITDA as EBITDA adjusted for equity-based compensation expense, transaction-related expenses and debt extinguishment costs. | |
| EBITDA, Adjusted EBITDA and Adjusted income from continuing operations 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"). EBITDA, Adjusted EBITDA and Adjusted income from continuing operations 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 EBITDA, Adjusted EBITDA and Adjusted income from continuing operations may not be comparable to similarly titled measures of other companies. We have included information concerning EBITDA, Adjusted EBITDA and Adjusted income from continuing operations 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 EBITDA, Adjusted EBITDA and Adjusted income from continuing operations when reporting their results. Our presentation of EBITDA, Adjusted EBITDA and Adjusted income from continuing operations should not be construed as an inference that our future results will be unaffected by unusual or nonrecurring items. | |
| (a) Represents the equity-based compensation expense of Acadia. | |
| (b) Represents debt extinguishment costs related to the repayment of $52.5 million of the Company's 12.875% Senior Notes due 2018 on March 12, 2013, including a prepayment premium of $6.8 million and the write-off of $2.6 million of deferred financing costs. | |
| (c) Represents transaction-related expenses incurred by Acadia related to acquisitions. | |
| (d) Represents the income tax provision adjusted to reflect the tax effect of the adjustments to income from continuing operations based on effective tax rates. |
Acadia Healthcare Company, Inc.
Brent Turner, 615-861-6000