Acadia Healthcare Reports First Quarter Adjusted EPS of $0.21

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,

2013

2012

(in thousands, except per share amounts)

Revenue before provision for doubtful accounts

$

165,705

$

91,268

Provision for doubtful accounts

(4,492

)

(1,705

)

Revenue

161,213

89,563

Salaries, wages and benefits (including equity-based compensation expense of

$601 and $578, respectively)

94,351

55,143

Professional fees

9,014

4,173

Supplies

8,598

4,445

Rents and leases

2,327

2,242

Other operating expenses

16,983

8,981

Depreciation and amortization

3,622

1,610

Interest expense, net

8,762

7,282

Debt extinguishment costs

9,350

-

Transaction-related expenses

1,474

695

Total expenses

154,481

84,571

Income from continuing operations before income taxes

6,732

4,992

Provision for income taxes

2,678

1,665

Income from continuing operations

4,054

3,327

(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:

Basic

49,911

32,120

Diluted

50,250

32,333

Acadia Healthcare Company, Inc.

Consolidated Balance Sheets

(Unaudited)

March 31, 2013

December 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

78,780

63,870

Deferred tax assets

12,573

11,380

Other current assets

21,164

16,332

Total current assets

212,292

140,981

Property and equipment, net

268,531

236,942

Goodwill

565,586

557,402

Intangible assets, net

16,247

15,988

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 payable

20,116

19,081

Accrued salaries and benefits

23,647

28,749

Other accrued liabilities

17,452

16,341

Total current liabilities

70,770

71,851

Long-term debt

560,098

465,638

Deferred tax liabilities - noncurrent

3,822

998

Other liabilities

13,628

12,376

Total liabilities

648,318

550,863

Equity:

Common stock

500

499

Additional paid-in capital

456,798

456,228

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,

2013

2012

(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 amortization

3,622

1,610

Amortization of debt issuance costs

540

587

Equity-based compensation expense

601

578

Deferred income tax expense

2,455

1,546

Loss (income) from discontinued operations, net of taxes

316

(352

)

Debt extinguishment costs

9,350

-

Other

15

19

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 activities

434

5,417

Net cash used in discontinued operating activities

(267

)

(482

)

Net cash provided by operating activities

167

4,935

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 debt

150,000

25,000

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 exercises

133

58

Excess tax benefit from equity awards

635

-

Net cash provided by financing activities

85,481

29,010

Net increase (decrease) in cash and cash equivalents

50,376

(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)