Full Press Release Details
Healthcare Reports Third Quarter Financial Results Consistent with
Previously Announced Preliminary Financial Results
Financial Guidance for 2016
to Close U.K. Divestiture Transaction in the Fourth Quarter
FRANKLIN, Tenn.--(BUSINESS WIRE)--November 1, 2016--Acadia Healthcare
Company, Inc. (NASDAQ: ACHC) today announced financial results for the
third quarter and nine months ended September 30, 2016. Revenue for the
quarter was $734.7 million, an increase of 53.1% from $479.7 million for
the third quarter of 2015. Loss from continuing operations attributable
to Acadia stockholders was $117.8 million, or $1.36 per diluted share,
compared with income from continuing operations of $29.5 million, or
$0.42 per diluted share, for the third quarter of 2015. Results for the
third quarter of 2016 include a loss on the planned U.K. divestiture of
approximately $174.7 million, which includes an allocation of the
goodwill related to the U.K. operations to the facilities held for sale
of $106.9 million, estimated transaction-related expenses of $25.6
million, and a loss on the sale of properties of $42.2 million. Adjusted
income from continuing operations attributable to Acadia stockholders
grew 13.7% to $49.9 million for the third quarter of 2016 from $43.9
million for the third quarter of 2015, and adjusted EPS was $0.58, a
6.5% decrease from $0.62. Weighted average diluted shares outstanding
increased 22.0% for the third quarter of 2016 from the third quarter of
2015, primarily due to the issuance of common stock in January and
February 2016 related to the acquisition of Priory Group. A
reconciliation of all non-GAAP financial results in this release appears
beginning on page 8.
For the first nine months of 2016, revenue was $2.1 billion, up 62.3%
from $1.3 billion for the first nine months of 2015. Loss from
continuing operations attributable to Acadia stockholders for the first
nine months of 2016 was $35.7 million, or $0.42 per diluted share,
compared with income from continuing operations of $78.0 million, or
$1.15 per diluted share, for the same period in 2015. Adjusted income
from continuing operations attributable to Acadia stockholders was
$158.9 million for the first nine months of 2016, an increase of 43.9%
from $110.5 million for the comparable period in 2015, and adjusted EPS
increased 13.4% to $1.86 from $1.64. Weighted average diluted shares
outstanding increased 26.8% for the first nine months of 2016 from the
first nine months of 2015.
"Acadia's revenue grew in excess of 50% for the third quarter of 2016,
the ninth consecutive quarter of such growth versus the comparable prior
year quarter," commented Joey Jacobs, Chairman and Chief Executive
Officer of Acadia. "For the latest quarter, this growth was, again,
primarily due to the increase in our inpatient beds during the last 12
months. We had approximately 17,900 beds at September 30, 2016,
including approximately 7,100 added through the acquisition of the
Priory Group in the first quarter of 2016, compared with approximately
9,600 a year earlier. For the nine months ended September 30, 2016, we
added approximately 7,300 beds through acquisitions, 548 beds to
existing facilities and 140 beds through the opening of two de novo
facilities. During the third quarter, we added 173 beds to existing
facilities in the U.S. and U.K. As previously announced on October 18,
2016, we signed a definitive agreement to sell 21 existing behavioral
health facilities and one de novo behavioral health facility with
approximately 1,000 beds in the U.K., subject to approval of the
Competition and Markets Authority (CMA)."
The Company's third quarter revenue growth also reflected a consolidated
6.2% increase in same facility revenue, compared with the third quarter
last year, which was less than anticipated. Same facility revenue in the
U.K. increased 5.1% compared with an increase of 8.5% for the third
quarter last year. Acadia believes this lower growth rate was primarily
the result of the disruption to U.K. operations related to the July 14,
2016, announcement by the CMA regarding the Priory acquisition and
subsequent events that led to the Company's definitive agreement to sell
facilities in the U.K. to address the CMA's competitive concerns.
In the U.S., same facility revenue growth was 6.5% for the third quarter
of 2016, compared to 5.9% for the same period last year. While the
growth rate improved from last year, it is lower than we anticipated.
Additionally, the third quarter results were also affected by a slower
than expected ramping at several de novo acute inpatient facilities
opened in 2015 and 2016.
Acadia had $27.8 million in cash and cash equivalents at the end of the
third quarter of 2016, and net cash provided by continuing operations
increased 49.8% to $79.4 million for the quarter and 84.7% to $265.2
million for the first nine months of 2016, compared with the same
periods in 2015. At the end of the third quarter, the Company had
significant availability under its $300 million revolving credit
Based on Acadia's results for the third quarter and outlook for the
fourth quarter, including the impact of the exchange rate and the
planned U.K. divestiture transaction, the Company today revised its
guidance for 2016 adjusted earnings per diluted share to a range of
$2.41 to $2.42. Adjusted earnings per diluted share for the fourth
quarter is projected to be in a range of $0.55 to $0.56 and assumes an
exchange rate of $1.22 per British Pound Sterling. The fourth quarter
guidance was negatively impacted by approximately $0.03 to reflect the
lower exchange rate and $0.02 for the net impact of the divestiture
transaction, which is expected to close on November 30, 2016. Acadia's
guidance also assumes a tax rate of 22%. 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 third quarter
financial results at 9:00 a.m. Eastern Time on Wednesday, November 2,
2016. 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 November 18, 2016.
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