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Acadia Healthcare Reports Third Quarter 2021 Results

Same Facility Revenue Grows 7.9%

Acadia Healthcare Company, Inc. (NASDAQ: ACHC) today announced financial results for the third quarter ended September 30, 2021.

Third Quarter 2021 Results

The Company reported revenue of $587.6 million for the third quarter of 2021, compared with $548.0 million for the third quarter of 2020. Adjusted EBITDA was $141.9 million for the third quarter of 2021, compared with $116.0 million for the same period last year. Results for the third quarter of 2020 included a reversal of the $18.1 million in other income that had been recorded in the second quarter of 2020 related to the Provider Relief Fund established by the Coronavirus Aid, Relief, and Economic Security (“CARES”) Act. Net income attributable to Acadia stockholders for the third quarter of 2021 was $66.1 million, or $0.73 per diluted share, compared to net income of $37.0 million, or $0.42 per diluted share, for the third quarter of 2020. Adjusted income from continuing operations attributable to Acadia stockholders was $0.72 per diluted share for the third quarter of 2021. Adjustments to income include transaction-related expenses, debt extinguishment costs, loss on impairment and the income tax effect of adjustments to income. A reconciliation of all non-GAAP financial results in this press release begins on page 9.

For the third quarter of 2021, Acadia’s same facility revenue increased 7.9% compared with the third quarter of 2020, including an increase in revenue per patient day of 5.6% and an increase in patient days of 2.2%. Same facility adjusted EBITDA margin was 29.0%.

Debbie Osteen, Chief Executive Officer of Acadia Healthcare Company, remarked, “We continue to see favorable momentum in our business as demand for our behavioral health services remains strong, especially within our acute and specialty service lines. Our teams faced some challenges during the third quarter related to Hurricane Ida and the surge of the Delta variant of COVID-19. We are extremely proud of them and applaud their dedication and caring for our patients under extraordinary conditions. Above all, the safety of our patients is our top priority, and we remain focused on providing consistent care for those seeking treatment for mental health and substance use issues.

“Our financial results for the third quarter were adversely affected by disruptions from Hurricane Ida in Louisiana, including temporary evacuation of one facility. The hurricane had a negative 0.3% impact on our revenue growth rate and a $0.01 impact on Adjusted EPS. In addition, our facilities in certain markets managed through an elevated level of COVID-19 cases during the third quarter. Despite these challenges, we continued to manage our operations safely and efficiently while maintaining our same high standards of patient care.”

Strategic Investments for Long-Term Growth

“We have made significant progress this year in executing on key strategic initiatives across our service lines as we have continued to make the right investments to support sustained, long-term growth. During the third quarter, we added 104 beds to our operations, bringing our total to 282 bed additions to existing facilities this year. We believe facility expansions offer the highest return on investment for Acadia, and we expect to meet our goal of adding approximately 300 beds to existing facilities by the end of the year.

“We also opened two new comprehensive treatment centers (CTCs) in the third quarter, located in Tennessee and Florida. CTCs are designed to address the growing and critical need for addiction treatment, especially for patients dealing with opioid use disorder. Through the end of the third quarter, we have opened five CTCs and expect to open six additional CTCs in underserved markets by the end of 2021.

“Forming strategic partnerships with leading healthcare systems across the country has been another important pathway for growth for Acadia. With the growing recognition and acceptance of behavioral health services driving demand, established providers are looking for ways to leverage their market presence and provide more treatment options in the communities they serve. We are proud of our 13 partnerships across the country, and we are excited about the opportunities to expand our reach into more communities. During the third quarter, we broke ground on new facilities with two of our JV partners – Geisinger and Lutheran Health Network of Indiana.

“Our success to date in 2021 confirms the strength of our operating model and our ability to execute our strategy. Looking ahead, we will continue to expand our network and serve more patients through our four distinct pathways for growth – bed expansions, wholly owned de novo facilities, strategic joint ventures and acquisitions,” added Osteen.

Cash and Liquidity

Acadia’s balance sheet remains strong with ample liquidity and capital to support its growth strategy. As of September 30, 2021, the Company had $196.3 million in cash and cash equivalents. During the third quarter, the Company repaid $25 million on its senior secured revolving credit facility, reducing the outstanding balance to $100 million as of September 30, 2021. The Company had $500 million available under its $600 million revolving credit facility as of September 30, 2021, and its net leverage ratio was approximately 2.2x.

During the third quarter, the Company continued its repayment of amounts received pursuant to the Medicare Accelerated and Advanced Payment Program under the CARES Act. In the third quarter of 2021, the Company repaid $10 million of the $45 million of advance payments received in 2020 under the Medicare Accelerated and Advanced Payment Program and will continue to repay the remaining balance on a monthly basis through September 2022. Also in the third quarter of 2021, the Company repaid half of the approximately $39 million of 2020 payroll tax deferrals with the remaining portion to be paid in 2022.

Financial Guidance

Acadia today narrowed its financial guidance for 2021, within previously announced ranges, as follows:

  • Revenue in a range of $2.295 billion to $2.315 billion;
  • Adjusted EBITDA in a range of $537 million to $547 million;
  • Adjusted earnings per diluted share in a range of $2.51 to $2.59, which reflects a revised estimate of stock compensation expense for the fourth quarter of 2021 in a range of $11 million to $13 million;
  • Operating cash flows in a range of $290 million to $325 million; and
  • Total capital expenditures in a range of $210 million to $230 million, which includes approximately $45 million for maintenance capital expenditures.

The Company’s guidance does not include the impact of any future acquisitions or transaction-related expenses.

Looking Ahead

“We are excited about the opportunities ahead for Acadia, as we focus on our primary objective to expand our market reach and support more patients with safe and quality care. We are especially pleased to see the growing acceptance and additional funding support for mental health and substance abuse issues. We have a unique opportunity to capitalize on these promising trends and meet the critical and growing demand for behavioral health services. Importantly, we have the capital structure to support our strategic growth initiatives and further enhance our position as the leading pure-play behavioral healthcare provider,” concluded Osteen.

Acadia will hold a conference call to discuss its third quarter financial results at 9:00 a.m. Eastern Time on Friday, October 29, 2021. 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, 2021, Acadia operated a network of 230 behavioral healthcare facilities with approximately 10,200 beds in 40 states and Puerto Rico. With more than 20,000 employees serving approximately 70,000 patients daily, Acadia is the largest stand-alone behavioral health 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) the impact of the COVID-19 pandemic, 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; and difficulty in collecting patient accounts receivable due to increases in the unemployment rate and the number of underinsured and uninsured patients; (ii) the impact of vaccine and other pandemic-related mandates imposed by local, state and federal authorities; (iii) potential difficulties in successfully integrating the operations of acquired facilities or realizing the expected benefits and synergies of our acquisitions, joint ventures and de novo transactions; (iv) Acadia’s ability to add beds, expand services, enhance marketing programs and improve efficiencies at its facilities; (v) potential reductions in payments received by Acadia from government and third-party payors; (vi) 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; (vii) 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 (viii) potential operating difficulties, labor costs, client preferences, changes in competition 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,

 

 

 

2021

 

 

 

2020

 

 

 

2021

 

 

 

2020

 

 

 

(In thousands, except per share amounts)

 
Revenue

$

587,559

 

$

547,961

 

$

1,720,914

 

$

1,548,653

 

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

$8,923, $5,471, $24,988 and $16,258, respectively)

 

309,118

 

 

290,619

 

 

922,684

 

 

852,864

 

Professional fees

 

35,602

 

 

29,372

 

 

101,915

 

 

91,009

 

Supplies

 

23,743

 

 

21,773

 

 

67,698

 

 

65,028

 

Rents and leases

 

9,658

 

 

9,365

 

 

28,690

 

 

27,975

 

Other operating expenses

 

76,502

 

 

68,213

 

 

222,263

 

 

202,540

 

Other income

 

-

 

 

18,070

 

 

-

 

 

-

 

Depreciation and amortization

 

27,805

 

 

24,132

 

 

78,349

 

 

70,298

 

Interest expense, net

 

15,706

 

 

37,315

 

 

61,420

 

 

118,398

 

Debt extinguishment costs

 

-

 

 

-

 

 

24,650

 

 

3,271

 

Loss on impairment

 

1,079

 

 

-

 

 

24,293

 

 

-

 

Transaction-related expenses

 

3,035

 

 

3,024

 

 

9,320

 

 

9,558

 

Total expenses

 

502,248

 

 

501,883

 

 

1,541,282

 

 

1,440,941

 

Income from continuing operations before income taxes

 

85,311

 

 

46,078

 

 

179,632

 

 

107,712

 

Provision for income taxes

 

17,411

 

 

9,191

 

 

42,948

 

 

24,174

 

Income from continuing operations

 

67,900

 

 

36,887

 

 

136,684

 

 

83,538

 

Income (loss) from discontinued operations, net of taxes

 

-

 

 

674

 

 

(12,641

)

 

29,804

 

Net income

 

67,900

 

 

37,561

 

 

124,043

 

 

113,342

 

Net income attributable to noncontrolling interests

 

(1,774

)

 

(563

)

 

(3,686

)

 

(1,802

)

Net income attributable to Acadia Healthcare Company, Inc.

$

66,126

 

$

36,998

 

$

120,357

 

$

111,540

 

 
Basic earnings per share attributable to Acadia Healthcare Company, Inc.

stockholders:
Income from continuing operations attributable to Acadia Healthcare

Company, Inc.

$

0.74

 

$

0.41

 

$

1.50

 

$

0.93

 

Income (loss) from discontinued operations

$

-

 

$

0.01

 

$

(0.14

)

$

0.34

 

Net income attributable to Acadia Healthcare Company, Inc.

$

0.74

 

$

0.42

 

$

1.36

 

$

1.27

 

 
Diluted earnings per share attributable to Acadia Healthcare Company, Inc.

stockholders:
Income from continuing operations attributable to Acadia Healthcare

Company, Inc.

$

0.73

 

$

0.41

 

$

1.47

 

$

0.92

 

Income (loss) from discontinued operations

$

-

 

$

0.01

 

$

(0.14

)

$

0.34

 

Net income attributable to Acadia Healthcare Company, Inc.

$

0.73

 

$

0.42

 

$

1.33

 

$

1.26

 

 
Weighted-average shares outstanding:
Basic

 

88,962

 

 

87,911

 

 

88,684

 

 

87,849

 

Diluted

 

90,889

 

 

88,856

 

 

90,604

 

 

88,449

 

 

Acadia Healthcare Company, Inc.

Condensed Consolidated Balance Sheets

(Unaudited)

 

 

 

 

 

 

 

September 30,

 

December 31,

 

 

 

2021

 

 

 

2020

 

 

 

(In thousands)

 

ASSETS

 
Current assets:
Cash and cash equivalents

$

196,313

 

$

378,697

 

Accounts receivable, net

 

282,161

 

 

273,551

 

Other current assets

 

88,685

 

 

61,332

 

Current assets held for sale

 

-

 

 

1,809,815

 

Total current assets

 

567,159

 

 

2,523,395

 

Property and equipment, net

 

1,665,025

 

 

1,622,896

 

Goodwill

 

2,103,503

 

 

2,105,264

 

Intangible assets, net

 

69,366

 

 

68,535

 

Deferred tax assets

 

3,112

 

 

3,209

 

Operating lease right-of-use assets

 

103,162

 

 

96,937

 

Other assets

 

83,400

 

 

79,126

 

Total assets

$

4,594,727

 

$

6,499,362

 

 
 

LIABILITIES AND EQUITY

 
Current liabilities:
Current portion of long-term debt

$

15,938

 

$

153,478

 

Accounts payable

 

85,924

 

 

87,815

 

Accrued salaries and benefits

 

124,164

 

 

124,912

 

Current portion of operating lease liabilities

 

20,062

 

 

18,916

 

Other accrued liabilities

 

157,204

 

 

178,453

 

Derivative instrument liabilities

 

-

 

 

84,584

 

Current liabilities held for sale

 

-

 

 

660,027

 

Total current liabilities

 

403,292

 

 

1,308,185

 

Long-term debt

 

1,413,407

 

 

2,968,948

 

Deferred tax liabilities

 

73,673

 

 

50,017

 

Operating lease liabilities

 

89,952

 

 

84,029

 

Other liabilities

 

117,883

 

 

133,412

 

Total liabilities

 

2,098,207

 

 

4,544,591

 

Redeemable noncontrolling interests

 

62,074

 

 

55,315

 

Equity:
Common stock

 

890

 

 

880

 

Additional paid-in capital

 

2,623,585

 

 

2,580,327

 

Accumulated other comprehensive loss

 

-

 

 

(371,365

)

Accumulated deficit

 

(190,029

)

 

(310,386

)

Total equity

 

2,434,446

 

 

1,899,456

 

Total liabilities and equity

$

4,594,727

 

$

6,499,362

 

 

Acadia Healthcare Company, Inc.

Condensed Consolidated Statements of Cash Flows

(Unaudited)

 

 

 

 

 

 

 

Nine Months Ended September 30,

 

 

 

2021

 

 

 

2020

 

 

 

(In thousands)

Operating activities:
Net income

$

124,043

 

$

113,342

 

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

 

78,349

 

 

70,298

 

Amortization of debt issuance costs

 

3,265

 

 

9,696

 

Equity-based compensation expense

 

24,988

 

 

16,258

 

Deferred income taxes

 

8,995

 

 

45,105

 

Loss (income) from discontinued operations, net of taxes

 

12,641

 

 

(29,804

)

Debt extinguishment costs

 

24,650

 

 

3,271

 

Loss on impairment

 

24,293

 

 

-

 

Other

 

881

 

 

1,024

 

Change in operating assets and liabilities:
Accounts receivable, net

 

(8,610

)

 

7,364

 

Other current assets

 

(2,758

)

 

(4,942

)

Other assets

 

(15,846

)

 

(880

)

Accounts payable and other accrued liabilities

 

6,358

 

 

19,854

 

Accrued salaries and benefits

 

18,820

 

 

14,150

 

Other liabilities

 

(11,633

)

 

(2,256

)

Government relief funds

 

(12,058

)

 

103,908

 

Net cash provided by continuing operating activities

 

276,378

 

 

366,388

 

Net cash provided by discontinued operating activities

 

253

 

 

105,852

 

Net cash provided by operating activities

 

276,631

 

 

472,240

 

 
Investing activities:
Cash paid for capital expenditures

 

(156,624

)

 

(168,804

)

Proceeds from U.K. Sale

 

1,511,020

 

 

-

 

Settlement of foreign currency derivatives

 

(84,795

)

 

-

 

Proceeds from sale of property and equipment

 

1,792

 

 

72

 

Cash paid for purchase of finance lease

 

(31,401

)

 

-

 

Other

 

4,906

 

 

(10,734

)

Net cash provided by (used in) continuing investing activities

 

1,244,898

 

 

(179,466

)

Net cash used in discontinued investing activities

 

-

 

 

(30,188

)

Net cash provided by (used in) investing activities

 

1,244,898

 

 

(209,654

)

 
Financing activities:
Borrowings on long-term debt

 

425,000

 

 

450,000

 

Borrowings on revolving credit facility

 

430,000

 

 

100,000

 

Principal payments on revolving credit facility

 

(330,000

)

 

(100,000

)

Principal payments on long-term debt

 

(5,313

)

 

(31,863

)

Repayment of long-term debt

 

(2,227,935

)

 

(450,000

)

Payment of debt issuance costs

 

(7,964

)

 

(11,220

)

Common stock withheld for minimum statutory taxes, net

 

16,072

 

 

(1,311

)

Distributions to noncontrolling interests

 

(926

)

 

(653

)

Other

 

(6,914

)

 

(1,291

)

Net cash used in continuing financing activities

 

(1,707,980

)

 

(46,338

)

Net cash used in discontinued financing activities

 

-

 

 

(2,226

)

Net cash used in financing activities

 

(1,707,980

)

 

(48,564

)

 
Effect of exchange rate changes on cash

 

4,067

 

 

488

 

 
Net (decrease) increase in cash and cash equivalents, including cash classified within

current assets held for sale

 

(182,384

)

 

214,510

 

Less: cash classified within current assets held for sale

 

-

 

 

(50,568

)

Net (decrease) increase in cash and cash equivalents

 

(182,384

)

 

163,942

 

Cash and cash equivalents at beginning of the period

 

378,697

 

 

124,192

 

Cash and cash equivalents at end of the period

$

196,313

 

$

288,134

 

 

Acadia Healthcare Company, Inc.

Operating Statistics

(Unaudited, Revenue in thousands)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Three Months Ended September 30,

 

Nine Months Ended September 30,

 

 

 

 

2021

 

 

 

2020

 

 

% Change

 

 

2021

 

 

 

2020

 

 

% Change

U.S. Same Facility Results (1)
Revenue

$

586,420

 

$

543,402

 

7.9

%

$

1,708,389

 

$

1,539,923

 

10.9

%

Patient Days

 

699,344

 

 

684,326

 

2.2

%

 

2,075,197

 

 

1,979,267

 

4.8

%

Admissions

 

45,070

 

 

44,781

 

0.6

%

 

135,377

 

 

129,234

 

4.8

%

Average Length of Stay (2)

 

15.5

 

 

15.3

 

1.5

%

 

15.3

 

 

15.3

 

0.1

%

Revenue per Patient Day

$

839

 

$

794

 

5.6

%

$

823

 

$

778

 

5.8

%

Adjusted EBITDA margin

 

29.0

%

 

25.4

%

360 bps

 

28.3

%

 

25.5

%

280 bps
 
U.S. Facility Results
Revenue

$

587,559

 

$

547,961

 

7.2

%

$

1,720,914

 

$

1,548,653

 

11.1

%

Patient Days

 

701,352

 

 

689,402

 

1.7

%

 

2,088,477

 

 

1,995,922

 

4.6

%

Admissions

 

45,246

 

 

44,877

 

0.8

%

 

136,384

 

 

129,638

 

5.2

%

Average Length of Stay (2)

 

15.5

 

 

15.4

 

0.9

%

 

15.3

 

 

15.4

 

-0.5

%

Revenue per Patient Day

$

838

 

$

795

 

5.4

%

$

824

 

$

776

 

6.2

%

Adjusted EBITDA margin

 

28.3

%

 

25.3

%

300 bps

 

27.7

%

 

25.4

%

230 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.

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,

 

 

 

2021

 

 

 

2020

 

 

 

2021

 

 

 

2020

 

 

 

(in thousands)

 
Net income attributable to Acadia Healthcare Company, Inc.

$

66,126

 

$

36,998

 

$

120,357

 

$

111,540

 

Net income attributable to noncontrolling interests

 

1,774

 

 

563

 

 

3,686

 

 

1,802

 

(Income) loss from discontinued operations, net of taxes

 

-

 

 

(674

)

 

12,641

 

 

(29,804

)

Provision for income taxes

 

17,411

 

 

9,191

 

 

42,948

 

 

24,174

 

Interest expense, net

 

15,706

 

 

37,315

 

 

61,420

 

 

118,398

 

Depreciation and amortization

 

27,805

 

 

24,132

 

 

78,349

 

 

70,298

 

EBITDA

 

128,822

 

 

107,525

 

 

319,401

 

 

296,408

 

 
Adjustments:
Equity-based compensation expense (a)

 

8,923

 

 

5,471

 

 

24,988

 

 

16,258

 

Transaction-related expenses (b)

 

3,035

 

 

3,024

 

 

9,320

 

 

9,558

 

Debt extinguishment costs (c)

 

-

 

 

-

 

 

24,650

 

 

3,271

 

Loss on impairment (d)

 

1,079

 

 

-

 

 

24,293

 

 

-

 

Adjusted EBITDA

$

141,859

 

$

116,020

 

$

402,652

 

$

325,495

 

 
Adjusted EBITDA margin

 

24.1

%

 

21.2

%

 

23.4

%

 

21.0

%

 
See footnotes on page 12.
 
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, 2021
Nine Months Ended

September 30, 2021
(in thousands, except per share amounts)
 
Net income attributable to Acadia Healthcare Company, Inc.

$

66,126

 

$

120,357

 

Loss from discontinued operations, net of taxes

 

-

 

 

12,641

 

 
Adjustments to income:
Transaction-related expenses (b)

 

3,035

 

 

9,320

 

Debt extinguishment costs (c)

 

-

 

 

24,650

 

Loss on impairment (d)

 

1,079

 

 

24,293

 

Provision for income taxes

 

17,411

 

 

42,948

 

Adjusted income from continuing operations before income taxes attributable to

Acadia Healthcare Company, Inc.

 

87,651

 

 

234,209

 

Income tax effect of adjustments to income (e)

 

22,508

 

 

62,709

 

Adjusted income from continuing operations attributable to Acadia Healthcare Company, Inc.

$

65,143

 

$

171,500

 

 
Weighted-average shares outstanding - diluted

 

90,889

 

 

90,604

 

 
Adjusted income from continuing operations attributable to Acadia Healthcare Company, Inc.

per diluted share

$

0.72

 

$

1.89

 

 
 
Three Months Ended

September 30, 2020
Nine Months Ended

September 30, 2020
(in thousands, except per share amounts)
Net income attributable to Acadia Healthcare Company, Inc.

$

36,998

 

$

111,540

 

Income from discontinued operations, net of taxes

 

(674

)

 

(29,804

)

 
Adjustments to income:
Transaction-related expenses (b)

 

3,024

 

 

9,558

 

Debt extinguishment costs (c)

 

-

 

 

3,271

 

Provision for income taxes

 

9,191

 

 

24,174

 

Adjusted income from continuing operations before income taxes attributable to

Acadia Healthcare Company, Inc.

 

48,539

 

 

118,739

 

Adjusted income from discontinued operations before income taxes

 

24,367

 

 

54,775

 

Adjusted income before income taxes attributable to Acadia Healthcare Company, Inc.

 

72,906

 

 

173,514

 

Income tax effect of adjustments to income (e)

 

12,562

 

 

28,372

 

Adjusted income attributable to Acadia Healthcare Company, Inc.

$

60,344

 

$

145,142

 

 
Weighted-average shares outstanding - diluted

 

88,856

 

 

88,449

 

 
Adjusted income attributable to Acadia Healthcare Company, Inc. per diluted share (3)

$

0.68

 

$

1.64

 

(3) For the three and nine months ended September 30, 2020, Adjusted income attributable to Acadia Healthcare Company, Inc. per diluted share includes Adjusted income from discontinued operations before income taxes and is not directly comparable to Adjusted income from continuing operations attributable to Acadia Healthcare Company, Inc. per diluted share for the three and nine months ended September 30, 2021. Interest expense, which has been significantly reduced following debt repayments in the first quarter of 2021, is recorded in income from continuing operations and not allocated to discontinued operations because such allocation would not be meaningful. Therefore, 2020 reflects consolidated results inclusive of discontinued operations, and 2021 reflects only continuing operations.

 

 

 

 

 

See footnotes on page 12.

 

 

Acadia Healthcare Company, Inc.

Discontinued Operations Supplemental Financial Information

(Unaudited)

 

 

 

 

 

 

 

 

 

 

Statements of Discontinued Operations

 

 

 

 

 

 

 

 

 

 

 

 

Three Months Ended September 30,

 

Nine Months Ended September 30,

 

 

 

 

2021

 

 

2020

 

 

 

2021

 

 

 

2020

 

 

 

 

(in thousands)

 

 
Revenue

$

-

$

285,343

 

$

62,520

 

$

817,772

 

 
Salaries, wages and benefits

 

-

 

159,840

 

 

35,937

 

 

465,514

 

Professional fees

 

-

 

31,987

 

 

6,815

 

 

92,264

 

Supplies

 

-

 

9,434

 

 

2,217

 

 

28,274

 

Rents and leases

 

-

 

11,817

 

 

2,509

 

 

34,858

 

Other operating expenses

 

-

 

28,880

 

 

6,682

 

 

85,682

 

Depreciation and amortization

 

-

 

18,780

 

 

-

 

 

55,739

 

Interest expense, net

 

-

 

238

 

 

10

 

 

666

 

Loss on sale

 

-

 

-

 

 

14,254

 

 

-

 

Loss on impairment

 

-

 

20,239

 

 

-

 

 

20,239

 

Transaction-related expenses

 

-

 

5,479

 

 

6,265

 

 

7,735

 

Total expenses

 

-

 

286,694

 

 

74,689

 

 

790,971

 

(Loss) income from discontinued operations before income taxes

 

-

 

(1,351

)

 

(12,169

)

 

26,801

 

(Benefit from) provision for income taxes

 

-

 

(2,025

)

 

472

 

 

(3,003

)

Income (loss) from discontinued operations, net of taxes

 

-

 

674

 

 

(12,641

)

 

29,804

 

 
 
 

Reconciliation of Income (Loss) from Discontinued Operations to

Adjusted Income from Discontinued Operations before Income Taxes

 

 

 

 

 

 

 

 

 

 

 

 

Three Months Ended September 30,

 

Nine Months Ended September 30,

 

 

 

 

2021

 

 

2020

 

 

 

2021

 

 

 

2020

 

 

 

 

(in thousands)

 

 
Income (loss) from discontinued operations, net of taxes

$

-

$

674

 

$

(12,641

)

$

29,804

 

 
Adjustments to income:
Transaction-related expenses (b)

 

-

 

5,479

 

 

6,265

 

 

7,735

 

Loss on sale (f)

 

-

 

-

 

 

14,254

 

 

-

 

Loss on impairment (g)

 

-

 

20,239

 

 

-

 

 

20,239

 

Provision for (benefit from) income taxes

 

-

 

(2,025

)

 

472

 

 

(3,003

)

Adjusted income from discontinued operations before income taxes

$

-

$

24,367

 

$

8,350

 

$

54,775

 

 
See footnotes on page 12.
 
Acadia Healthcare Company, Inc.
Footnotes
 
We have included certain financial measures in this press release, including EBITDA, Adjusted EBITDA, Adjusted EBITDA margin, Adjusted income from continuing operations before income taxes attributable to Acadia Healthcare Company, Inc., Adjusted income from continuing operations attributable to Acadia Healthcare Company, Inc., Adjusted income from discontinued operations before income taxes and Adjusted income attributable to Acadia Healthcare Company, Inc., 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 net income attributable to noncontrolling interests, loss (income) from discontinued operations, net of taxes, provision for income taxes, net interest expense and depreciation and amortization. We define Adjusted EBITDA as EBITDA adjusted for equity-based compensation expense, transaction-related expenses, debt extinguishment costs and loss on impairment. We define Adjusted EBITDA margin as Adjusted EBITDA divided by revenue. We define Adjusted income from continuing operations before income taxes attributable to Acadia Healthcare Company, Inc. as net income adjusted for loss from discontinued operations, net of taxes, transaction-related expenses, debt extinguishment costs, loss on impairment and provision for income taxes. We define Adjusted income from continuing operations attributable to Acadia Healthcare Company, Inc. as net income attributable to Acadia Healthcare Company, Inc. adjusted for loss from discontinued operations, net of taxes, transaction-related expenses, debt extinguishment costs, loss on impairment, provision for income taxes and income tax effect of adjustments to income. We define Adjusted income from discontinued operations before income taxes as (loss) income from discontinued operations, net of taxes, adjusted for transaction-related expenses, loss on sale, loss on impairment and provision for (benefit from) income taxes.
 
We define Adjusted income attributable to Acadia Healthcare Company, Inc. as the sum of Adjusted income from continuing operations before income taxes attributable to Acadia Healthcare Company, Inc., Adjusted income from discontinued operations before income taxes and income tax effect of adjustments to income.
 
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.
 
(a) Represents the equity-based compensation expense of Acadia.
 
(b) Represents transaction-related expenses incurred by Acadia primarily related to termination, restructuring, strategic review, acquisition and other similar costs.
 
(c) Represents debt extinguishment costs recorded during the first quarter of 2021 in connection with the redemption of the 5.625% Senior Notes and 6.500% Senior Notes and the termination of the Prior Credit Facility and during the second quarter of 2020 in connection with the redemption of the 6.125% Senior Notes and 5.125% Senior Notes.
 
(d) The Company opened a 260-bed replacement hospital in Pennsylvania and recorded a non-cash property impairment charge of $23.2 million for the existing facility during the second quarter of 2021. Additionally, during the third quarter of 2021, the Company recorded a $1.1 million non-cash property impairment charge for one facility in Louisiana resulting from hurricane damage.
 
(e) Represents the income tax effect of adjustments to income based on tax rates of 25.7% and 17.2% for the three months ended September 30, 2021 and 2020, respectively, and 26.8% and 16.4% for the nine months ended September 30, 2021 and 2020, respectively. During the three and nine months ended September 30, 2021, the Company recorded a tax benefit of $0.2 million and $1.9 million, respectively, from ASU 2016-09 “Improvements to Employee Share-Based Payment Accounting”. During the three and nine months ended September 30, 2021, the Company recorded a tax benefit of $3.1 million related to the release of a valuation allowance placed on capital gains for certain facilities disposed of in prior periods. Both tax benefits were excluded from the adjusted tax provision for the three and nine months ended September 30, 2021.
 
(f) Represents the adjustments to the loss on sale recorded in connection with the sale of our U.K. operations in January 2021 to reflect an increase in the U.K. carrying value.
 
(g) For the three and nine months ended September 30, 2020, represents a non-cash lease impairment charge of $16.4 million and a non-cash long-lived asset impairment charge of $3.8 million related to the decision to close certain U.K. elderly care facilities.

 

Contacts

Gretchen Hommrich

Director, Investor Relations

(615) 861-6000

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