Acadia Healthcare Reports First Quarter Adjusted EPS of $0.21

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Acadia Healthcare Reports First Quarter Adjusted EPS of $0.21

Revenue Totals $161 Million, with 8.8% Growth in Same Facility Revenue

Completes Previously Announced Acquisition of Two Facilities in Puerto Rico and Florida


Increases 2013 Earnings Guidance to Range of $1.00 to $1.03 from Prior Range of $0.96 to $1.00

FRANKLIN, Tenn.--(BUSINESS WIRE)-- Acadia Healthcare Company, Inc. (NAS: ACHC) today announced financial results for the first quarter ended March 31, 2013. Revenue increased 80.0% for the first quarter to $161.2 million from $89.6 million for the first quarter of 2012. Income from continuing operations was $4.1 million, or $0.08 per diluted share, for the first quarter of 2013 compared with $3.3 million, or $0.10 per diluted share, for the first quarter of 2012. Adjusted income from continuing operations increased 178.9% to $10.6 million for the first quarter of 2013 from $3.8 million for the first quarter of 2012. The adjusted results for the first quarter of 2013 exclude debt extinguishment costs of $9.4 million and transaction-related expenses of $1.5 million and, for the first quarter of 2012, exclude transaction-related expenses of $0.7 million. Adjusted income from continuing operations per diluted share increased 75.0% to $0.21 for the first quarter of 2013 from $0.12 for the first quarter of 2012, which reflected a 55.4% increase in weighted average shares outstanding for the comparable quarters, primarily due to Acadia's public equity offerings in May 2012 and December 2012. A reconciliation of all GAAP and non-GAAP financial results in this release is on pages 7 and 8.

Joey Jacobs, Chairman and Chief Executive Officer of Acadia, commented, "Acadia's strong revenue and margin performance continued in the first quarter of 2013. Our revenue growth reflected an increase of over 1,200 beds in the 12 months preceding the end of the quarter, primarily through the acquisition of 12 facilities and the addition of approximately 200 beds to existing facilities. The addition of new beds in our same-facility base contributed to an 8.8% increase in patient days for the quarter, which drove an 8.8% increase in same facility revenue. Our growth continued to generate increased same facility operating leverage, in addition to the positive impact of our increased productivity, as reflected in the same facility EBITDA margin increase of 390 basis points to 25.0% for the first quarter of 2013 from 21.1% for the first quarter last year. Adjusted consolidated EBITDA more than doubled compared to the prior year period for the third consecutive quarter, to $30.5 million, or 18.9% of consolidated revenue, from $15.2 million for the first quarter of 2012.

"At the end of the first quarter, the Company had cash and cash equivalents of $99.8 million and approximately $100 million of availability under our revolving credit facility. Our ratio of total net debt to trailing 12 months adjusted EBITDA at the end of the quarter was 3.8. We remain confident of our ability to fund our growth strategies for 2013."

Acadia also today announced that it has completed the previously announced acquisition of two acute inpatient psychiatric facilities in San Juan, Puerto Rico and Tampa, Florida. The San Juan facility, which produced 2012 revenues of approximately $25 million, is licensed for 108 beds and has a certificate of need to build 100 additional beds. The Tampa facility, with 75 beds, is under construction with a scheduled opening in the third quarter of 2013.

Based on the Company's performance for the first quarter and the completion of this acquisition, Acadia increased its guidance for 2013 adjusted earnings per diluted share to a range of $1.00 to $1.03 from the prior range of $0.96 to $1.00. This updated guidance also incorporates the impact of the Company's recent debt issuance, as well as the estimated impact of sequestration on the Company's Medicare reimbursement for the balance of 2013. The Company's guidance does not include the impact of any future acquisitions.

Acadia will hold a conference call to discuss its second quarter financial results at 9:00 a.m. Eastern Time on Thursday, May 2, 2013. A live webcast of the conference call will be available at www.acadiahealthcare.com in the "Investors" section of the website or at www.earnings.com. The webcast of the conference call will be available through May 16, 2013.

Risk Factors

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.

About Acadia

Acadia is a provider of inpatient behavioral healthcare services. Acadia operates a network of 46 behavioral healthcare facilities with approximately 3,700 licensed beds in 21 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.
Consolidated Statements of Operations
(Unaudited)
 
Three Months Ended March 31,
20132012
(in thousands, except per share amounts)
 
Revenue before provision for doubtful accounts$165,705$91,268
Provision for doubtful accounts (4,492) (1,705)
Revenue161,21389,563
 
Salaries, wages and benefits (including equity-based compensation expense of

$601 and $578, respectively)

94,35155,143
Professional fees9,0144,173
Supplies8,5984,445
Rents and leases2,3272,242
Other operating expenses16,9838,981
Depreciation and amortization3,6221,610
Interest expense, net8,7627,282
Debt extinguishment costs9,350-
Transaction-related expenses 1,474  695 
Total expenses 154,481  84,571 
Income from continuing operations before income taxes6,7324,992
Provision for income taxes 2,678  1,665 
Income from continuing operations4,0543,327
(Loss) income from discontinued operations, net of income taxes (316) 352 
Net income$3,738 $3,679 
 
Basic earnings per share:
Income from continuing operations$0.08$0.10
(Loss) income from discontinued operations (0.01) 0.01 
Net income$0.07 $0.11 
 
Diluted earnings per share:
Income from continuing operations$0.08$0.10
(Loss) income from discontinued operations (0.01) 0.01 
Net income$0.07 $0.11 
 
Weighted-average shares outstanding:
Basic49,91132,120
Diluted50,25032,333
 

  
Acadia Healthcare Company, Inc.
Consolidated Balance Sheets
(Unaudited)
 
 
March 31, 2013December 31, 2012
(In thousands)
 
ASSETS
Current assets:
Cash and cash equivalents$99,775$49,399

Accounts receivable, net of allowance for doubtful accounts of $10,998 and $7,484, respectively

78,78063,870
Deferred tax assets12,57311,380
Other current assets 21,164  16,332 
Total current assets212,292140,981
Property and equipment, net268,531236,942
Goodwill565,586557,402
Intangible assets, net16,24715,988
Other assets 22,521  32,100 
Total assets$1,085,177 $983,413 
 
 
LIABILITIES AND EQUITY
Current liabilities:
Current portion of long-term debt$9,555$7,680
Accounts payable20,11619,081
Accrued salaries and benefits23,64728,749
Other accrued liabilities 17,452  16,341 
Total current liabilities70,77071,851
Long-term debt560,098465,638
Deferred tax liabilities - noncurrent3,822998
Other liabilities 13,628  12,376 
Total liabilities648,318550,863
Equity:
Common stock500499
Additional paid-in capital456,798456,228
Accumulated deficit (20,439) (24,177)
Total equity 436,859  432,550 
Total liabilities and equity$1,085,177 $983,413 
 

  
Acadia Healthcare Company, Inc.
Consolidated Statements of Cash Flows
(Unaudited)
 
Three Months Ended March 31,
20132012
(In thousands)
 
Operating activities:
Net income$3,738$3,679

Adjustments to reconcile net income to net cash provided by continuing operating activities:

Depreciation and amortization3,6221,610
Amortization of debt issuance costs540587
Equity-based compensation expense601578
Deferred income tax expense2,4551,546
Loss (income) from discontinued operations, net of taxes316(352)
Debt extinguishment costs9,350-
Other1519
Change in operating assets and liabilities, net of effect of acquisitions:
Accounts receivable(9,522)(4,686)
Other current assets(1,072)(714)
Other assets(850)(50)
Accounts payable and other accrued liabilities(997)3,484
Accrued salaries and benefits(7,491)(1,244)
Other liabilities (271) 960 
Net cash provided by continuing operating activities4345,417
Net cash used in discontinued operating activities (267) (482)
Net cash provided by operating activities1674,935
 
Investing activities:
Cash paid for acquisitions, net of cash acquired(22,375)(90,400)
Cash paid for capital expenditures(12,764)(3,911)
Other (133) 88 
Net cash used in investing activities(35,272)(94,223)
 
Financing activities:
Borrowings on long-term debt150,00025,000
Net increase in revolving credit facility-7,000
Principal payments on long-term debt(1,875)(2,000)
Repayment of long-term debt(52,500)-
Payment of debt issuance costs(4,153)(1,048)
Payment of premium on note redemption(6,759)-
Proceeds from stock option exercises13358
Excess tax benefit from equity awards 635  - 
Net cash provided by financing activities 85,481  29,010 
 
Net increase (decrease) in cash and cash equivalents50,376(60,278)
Cash and cash equivalents at beginning of the period 49,399  61,118 
Cash and cash equivalents at end of the period$99,775 $840 
 
Effect of acquisitions:
Assets acquired, excluding cash$43,330$93,131
Liabilities assumed(9,271)(2,731)
Prior year deposits paid for acquisitions (11,684) - 
Cash paid for acquisitions, net of cash acquired$22,375 $90,400 
 

 
Acadia Healthcare Company, Inc.
Operating Statistics
(Unaudited)
(Revenue in thousands)
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