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Press release content from Business Wire. The AP news staff was not involved in its creation.

Acadia Healthcare Reports Fourth Quarter 2019 Results

February 27, 2020 GMT

FRANKLIN, Tenn.--(BUSINESS WIRE)--Feb 27, 2020--

Acadia Healthcare Company, Inc. (NASDAQ: ACHC) today announced financial results for the fourth quarter and year ended December 31, 2019, that were in line with the Company’s previously issued guidance. Revenue was $780.2 million for the fourth quarter, up 4.9% from $743.5 million for the fourth quarter of 2018. Net loss attributable to Acadia stockholders for the fourth quarter of 2019 was $11.3 million, or $0.13 per diluted share, compared with a net loss of $331.6 million, or $3.80 per diluted share, for the fourth quarter of 2018.

For the fourth quarter, Acadia’s total same facility revenue increased 4.5% compared with the fourth quarter of 2018, including a 0.4% increase in patient days and a 4.1% increase in revenue per patient day. Total same facility EBITDA margin increased 20 basis points to 22.0%. U.S. same facility revenue increased 5.5%, including a 2.4% increase in patient days and a 3.0% increase in revenue per patient day. U.S. same facility EBITDA margin increased 30 basis points to 25.0%. For the U.K. operations, same facility revenue was up 2.7% for the fourth quarter of 2019 from the fourth quarter last year, reflecting a 4.7% increase in revenue per patient day offset by a 2.0% decrease in patient days. U.K. same facility EBITDA margin declined 40 basis points to 16.1%. Acadia’s consolidated adjusted EBITDA for the fourth quarter of 2019 was $144.4 million, compared with $133.9 million for the fourth quarter of 2018.

Results for the fourth quarter of 2019 include transaction-related expenses of $11.8 million, an impairment charge of $54.4 million, which relates to a non-cash impairment of property and equipment at certain closed facilities, and the income tax effect of adjustments to income of $9.9 million based on a tax rate of 18.1%. Adjusted income attributable to Acadia stockholders per diluted share was $0.51 for the fourth quarter of 2019.

A reconciliation of all non-GAAP financial results in this press release appears beginning on page 8.

Debbie Osteen, Chief Executive Officer of Acadia Healthcare Company, remarked, “Results for this quarter were in line with our expectations. Our U.S. facilities showed improvement across key metrics, as we continued to address and resolve certain facility issues that affected our results in the third quarter. Our U.K. facilities continue to see stability in their operating trends.

“During the fourth quarter, we added 171 beds to Acadia’s operations, including 150 beds in our U.S. operations and 21 beds in the U.K. For the full year, we added 585 beds to existing and new facilities, including 519 beds in the U.S. Moving forward to 2020, we expect to add approximately 600 beds in the U.S. We are excited about the opportunities ahead for Acadia to extend our market reach and advance our position as a leading operator of behavioral healthcare facilities.

“We launched a formal process regarding the sale of our U.K. business in January 2020, following the U.K. elections and preliminary discussions with prospective buyers at the end of last year. Consistent with market practice for U.K. transactions of this nature, and in conjunction with our advisors, we solicited and now have received initial, non-binding offers to acquire our U.K. business from multiple bidders. We are currently in the second phase of the sale process, during which interested bidders will receive proposed transaction documents and complete their confirmatory due diligence. We will continue to work with our financial and legal advisors and will update the market when and as we determine it is appropriate,” added Osteen.

Acadia today established its financial guidance for the full year 2020, as follows:

  • Revenue in a range of $3.28 billion to $3.34 billion;
  • Adjusted EBITDA in a range of $610 million to $630 million;
  • Adjusted earnings per diluted share in a range of $2.20 to $2.40;
  • Stock compensation expense of approximately $22 million;
  • Depreciation & amortization expense in a range of $175 million to $180 million;
  • Interest expense in a range of $172 million to $177 million;
  • Total weighted average shares outstanding (diluted) of approximately 88.1 million;
  • Operating cash flows in a range of $375 million to $410 million;
  • Total capital expenditures in a range of $330 million to $350 million, including approximately $90 million for maintenance capital expenditures;
  • An exchange rate of $1.30 per British Pound Sterling; and
  • A tax rate of approximately 17%.

Acadia also established its financial guidance for the first quarter of 2020, as follows:

  • Revenue in a range of $795 million to $805 million;
  • Adjusted EBITDA in a range of $133 million to $137 million; and
  • Adjusted earnings per diluted share in a range of $0.37 to $0.42.

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

Osteen concluded, “We expect to see continued improvement and high single-digit revenue growth and EBITDA margin improvement in the second half of 2020 for our U.S. facilities. Our first quarter guidance reflects the ongoing progress we continue to realize regarding the implementation of our facility improvement plans, operational improvement initiatives and numerous growth initiatives. With respect to our operational improvement initiatives, we believe we will achieve approximately $20 million in annualized cost savings by the end of 2020, which is in line with our original announcement in May of last year. We are pleased with our progress to date and look forward to realizing the incremental benefits of our strategy while we continue to support our patients with the highest quality of care. In the U.K., we anticipate our revenue growth will be driven by re-tooled beds coming back online and improved occupancy trends.

EBITDA is defined as net (loss) income adjusted for net income attributable to noncontrolling interests, provision for (benefit from) income taxes, net interest expense and depreciation and amortization. Adjusted EBITDA is defined as EBITDA adjusted for equity-based compensation expense, transaction-related expenses, debt extinguishment costs, legal settlements expense and loss on impairment. Adjusted income is defined as net (loss) income adjusted for transaction-related expenses, tax reform impact, debt extinguishment costs, legal settlements expense, loss on impairment and income tax effect of adjustments to income.

Acadia will hold a conference call to discuss its fourth quarter financial results at 9:00 a.m. Eastern Time on Friday, February 28, 2020. 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 March 14, 2020.

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) potential difficulties operating our business in light of political and economic instability in the U.K. and globally relating to the U.K.’s departure from the European Union; (ii) the impact of fluctuations in foreign exchange rates, including the devaluation of the British Pound Sterling (GBP) relative to the U.S. Dollar (USD); (iii) Acadia’s efforts to sell its U.K. operations may not result in any definitive transaction or enhance stockholder value; (iv) 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; (v) Acadia’s ability to add beds, expand services, enhance marketing programs and improve efficiencies at its facilities; (vi) potential reductions in payments received by Acadia from government and fourth-party payors; (vii) the occurrence of patient incidents, governmental investigations and adverse regulatory actions, which could adversely affect the price of our common stock and result in substantial payments and incremental regulatory burdens; (viii) 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 (ix) 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.

About Acadia

Acadia is a provider of behavioral healthcare services. At December 31, 2019, Acadia operated a network of 585 behavioral healthcare facilities with approximately 18,200 beds in 40 states, the United Kingdom and Puerto Rico. Acadia provides behavioral health and addiction services to its patients in a variety of settings, including inpatient psychiatric hospitals, specialty treatment facilities, residential treatment centers and outpatient clinics.

 
Acadia Healthcare Company, Inc.
Condensed Consolidated Statements of Operations
(Unaudited)
  
 

Three Months Ended December 31,

 

Year Ended December 31,

 

2019

 

2018

 

2019

 

2018

 (In thousands, except per share amounts)
  
Revenue 

$

780,232

 

$

743,547

 

$

3,107,462

 

$

3,012,442

 

  
Salaries, wages and benefits (including equity-based compensation expense of $2,985, $2,728, $17,307 and $22,001, respectively) 

 

428,781

 

 

413,162

 

 

1,717,180

 

 

1,659,348

 

Professional fees 

 

63,395

 

 

60,437

 

 

240,983

 

 

227,425

 

Supplies 

 

31,400

 

 

30,356

 

 

123,061

 

 

119,314

 

Rents and leases 

 

21,369

 

 

19,892

 

 

82,229

 

 

80,282

 

Other operating expenses 

 

93,916

 

 

88,521

 

 

375,433

 

 

354,498

 

Depreciation and amortization 

 

41,767

 

 

39,472

 

 

164,044

 

 

158,832

 

Interest expense, net 

 

43,710

 

 

47,704

 

 

187,094

 

 

185,410

 

Debt extinguishment costs 

 

-

 

 

875

 

 

-

 

 

1,815

 

Legal settlements expense 

 

-

 

 

22,076

 

 

-

 

 

22,076

 

Loss on impairment 

 

54,386

 

 

337,889

 

 

54,386

 

 

337,889

 

Transaction-related expenses 

 

11,756

 

 

24,499

 

 

27,064

 

 

34,507

 

Total expenses 

 

790,480

 

 

1,084,883

 

 

2,971,474

 

 

3,181,396

 

(Loss) income before income taxes 

 

(10,248

)

 

(341,336

)

 

135,988

 

 

(168,954

)

Provision for (benefit from) income taxes 

 

65

 

 

(9,807

)

 

25,866

 

 

6,532

 

Net (loss) income 

 

(10,313

)

 

(331,529

)

 

110,122

 

 

(175,486

)

Net income attributable to noncontrolling interests 

 

(941

)

 

(108

)

 

(1,199

)

 

(264

)

Net (loss) income attributable to Acadia Healthcare Company, Inc. 

$

(11,254

)

$

(331,637

)

$

108,923

 

$

(175,750

)

  
Earnings per share attributable to Acadia Healthcare Company, Inc. stockholders: 
Basic 

$

(0.13

)

$

(3.80

)

$

1.24

 

$

(2.01

)

Diluted 

$

(0.13

)

$

(3.80

)

$

1.24

 

$

(2.01

)

  
Weighted-average shares outstanding: 
Basic 

 

87,674

 

 

87,382

 

 

87,612

 

 

87,288

 

Diluted 

 

87,674

 

 

87,382

 

 

87,816

 

 

87,288

 

Acadia Healthcare Company, Inc.
Condensed Consolidated Balance Sheets
(Unaudited)
 

December 31,

2019

2018

(In thousands)
 
ASSETS
Current assets:
Cash and cash equivalents

$

124,192

 

$

50,510

 

Accounts receivable, net

 

339,775

 

 

318,087

 

Other current assets

 

78,244

 

 

81,820

 

Total current assets

 

542,211

 

 

450,417

 

Property and equipment, net

 

3,224,034

 

 

3,107,766

 

Goodwill

 

2,449,131

 

 

2,396,412

 

Intangible assets, net

 

90,357

 

 

88,990

 

Deferred tax assets

 

3,339

 

 

3,468

 

Derivative instrument assets

 

-

 

 

60,524

 

Operating lease right-of-use assets

 

501,837

 

 

-

 

Other assets

 

68,233

 

 

64,927

 

Total assets

$

6,879,142

 

$

6,172,504

 

 
 
LIABILITIES AND EQUITY
Current liabilities:
Current portion of long-term debt

$

43,679

 

$

34,112

 

Accounts payable

 

127,045

 

 

117,740

 

Accrued salaries and benefits

 

122,552

 

 

113,299

 

Current portion of operating lease liabilities

 

29,140

 

 

-

 

Other accrued liabilities

 

141,160

 

 

151,226

 

Total current liabilities

 

463,576

 

 

416,377

 

Long-term debt

 

3,105,420

 

 

3,159,375

 

Deferred tax liabilities

 

71,860

 

 

80,372

 

Operating lease liabilities

 

502,252

 

 

-

 

Derivative instrument liabilities

 

68,915

 

 

-

 

Other liabilities

 

128,587

 

 

154,267

 

Total liabilities

 

4,340,610

 

 

3,810,391

 

Redeemable noncontrolling interests

 

33,151

 

 

28,806

 

Equity:
Common stock

 

877

 

 

874

 

Additional paid-in capital

 

2,557,642

 

 

2,541,987

 

Accumulated other comprehensive loss

 

(414,884

)

 

(462,377

)

Retained earnings

 

361,746

 

 

252,823

 

Total equity

 

2,505,381

 

 

2,333,307

 

Total liabilities and equity

$

6,879,142

 

$

6,172,504

 

Acadia Healthcare Company, Inc.
Condensed Consolidated Statements of Cash Flows
(Unaudited)
  
 

Year Ended December 31,

 

2019

2018

 (In thousands)
Operating activities: 
Net income (loss) 

$

110,122

 

$

(175,486

)

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

 

164,044

 

 

158,832

 

Amortization of debt issuance costs 

 

11,987

 

 

10,456

 

Equity-based compensation expense 

 

17,307

 

 

22,001

 

Deferred income taxes 

 

1,780

 

 

(9,714

)

Debt extinguishment costs 

 

-

 

 

1,815

 

Legal settlements expense 

 

-

 

 

22,076

 

Loss on impairment 

 

54,386

 

 

337,889

 

Other 

 

4,035

 

 

12,371

 

Change in operating assets and liabilities: 
Accounts receivable, net 

 

(19,060

)

 

(16,821

)

Other current assets 

 

(1,344

)

 

13,864

 

Other assets 

 

(73

)

 

2,762

 

Accounts payable and other accrued liabilities 

 

(21,354

)

 

26,054

 

Accrued salaries and benefits 

 

7,820

 

 

15,748

 

Other liabilities 

 

3,254

 

 

(5,219

)

Net cash provided by continuing operating activities 

 

332,904

 

 

416,628

 

Net cash used in discontinued operating activities 

 

-

 

 

(2,548

)

Net cash provided by operating activities 

 

332,904

 

 

414,080

 

  
Investing activities: 
Cash paid for acquisitions, net of cash acquired 

 

(45,677

)

 

-

 

Cash paid for capital expenditures 

 

(284,682

)

 

(341,462

)

Cash paid for real estate acquisitions 

 

(7,618

)

 

(18,383

)

Settlement of foreign currency derivatives 

 

105,008

 

 

-

 

Proceeds from sale of property and equipment 

 

18,076

 

 

8,248

 

Other 

 

13,752

 

 

(9,367

)

Net cash used in investing activities 

 

(201,141

)

 

(360,964

)

  
Financing activities: 
Borrowings on revolving credit facility 

 

76,573

 

 

-

 

Principal payments on revolving credit facility 

 

(76,573

)

 

-

 

Principal payments on long-term debt 

 

(52,984

)

 

(39,738

)

Repayment of long-term debt 

 

-

 

 

(21,920

)

Common stock withheld for minimum statutory taxes, net 

 

(1,649

)

 

(3,407

)

Distributions to noncontrolling interests 

 

(154

)

 

-

 

Other 

 

(6,840

)

 

(2,265

)

Net cash used in financing activities 

 

(61,627

)

 

(67,330

)

  
Effect of exchange rate changes on cash 

 

3,546

 

 

(2,566

)

  
Net increase (decrease) in cash and cash equivalents 

 

73,682

 

 

(16,780

)

Cash and cash equivalents at beginning of the period 

 

50,510

 

 

67,290

 

Cash and cash equivalents at end of the period 

$

124,192

 

$

50,510

 

  
Effect of acquisitions: 
Assets acquired, excluding cash 

$

49,715

 

$

-

 

Liabilities assumed 

 

(4,038

)

 

-

 

Cash paid for acquisitions, net of cash acquired 

$

45,677

 

$

-

 

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

Three Months Ended December 31,

 

Year Ended December 31,

2019

 

2018

 

% Change

 

2019

 

2018

 

% Change

Same Facility Results (a,c)
Revenue

$

742,391

 

$

710,304

 

4.5%

$

2,957,051

 

$

2,813,676

 

5.1%

Patient Days

 

1,133,208

 

 

1,128,348

 

0.4%

 

4,547,523

 

 

4,480,163

 

1.5%

Admissions

 

42,977

 

 

42,372

 

1.4%

 

176,120

 

 

169,835

 

3.7%

Average Length of Stay (b)

 

26.4

 

 

26.6

 

-1.0%

 

25.8

 

 

26.4

 

-2.1%

Revenue per Patient Day

$

655

 

$

630

 

4.1%

$

650

 

$

628

 

3.5%

EBITDA margin

 

22.0

%

 

21.8

%

20 bps

 

23.1

%

 

23.9

%

-80 bps
 
U.S. Same Facility Results (a)
Revenue

$

488,112

 

$

462,601

 

5.5%

$

1,955,730

 

$

1,849,058

 

5.8%

Patient Days

 

635,929

 

 

620,977

 

2.4%

 

2,546,768

 

 

2,467,725

 

3.2%

Admissions

 

40,712

 

 

40,101

 

1.5%

 

166,774

 

 

160,310

 

4.0%

Average Length of Stay (b)

 

15.6

 

 

15.5

 

0.9%

 

15.3

 

 

15.4

 

-0.8%

Revenue per Patient Day

$

768

 

$

745

 

3.0%

$

768

 

$

749

 

2.5%

EBITDA margin

 

25.0

%

 

24.7

%

30 bps

 

26.3

%

 

26.6

%

-30 bps
 
U.K. Same Facility Results (a,c)
Revenue

$

254,279

 

$

247,703

 

2.7%

$

1,001,321

 

$

964,618

 

3.8%

Patient Days

 

497,279

 

 

507,371

 

-2.0%

 

2,000,755

 

 

2,012,438

 

-0.6%

Admissions

 

2,265

 

 

2,271

 

-0.3%

 

9,346

 

 

9,525

 

-1.9%

Average Length of Stay (b)

 

219.5

 

 

223.4

 

-1.7%

 

214.1

 

 

211.3

 

1.3%

Revenue per Patient Day

$

511

 

$

488

 

4.7%

$

500

 

$

479

 

4.4%

EBITDA margin

 

16.1

%

 

16.5

%

-40 bps

 

16.7

%

 

18.9

%

-220 bps
 
 
U.S. Facility Results
Revenue

$

501,225

 

$

472,194

 

6.1%

$

2,008,381

 

$

1,904,695

 

5.4%

Patient Days

 

652,415

 

 

639,687

 

2.0%

 

2,613,164

 

 

2,538,737

 

2.9%

Admissions

 

42,222

 

 

40,322

 

4.7%

 

172,320

 

 

161,387

 

6.8%

Average Length of Stay (b)

 

15.5

 

 

15.9

 

-2.6%

 

15.2

 

 

15.7

 

-3.6%

Revenue per Patient Day

$

768

 

$

738

 

4.1%

$

769

 

$

750

 

2.4%

EBITDA margin

 

24.3

%

 

23.8

%

50 bps

 

25.1

%

 

25.6

%

-50 bps
 
U.K. Facility Results (c)
Revenue

$

279,007

 

$

271,630

 

2.7%

$

1,099,081

 

$

1,059,733

 

3.7%

Patient Days

 

664,709

 

 

678,162

 

-2.0%

 

2,673,715

 

 

2,702,551

 

-1.1%

Admissions

 

2,626

 

 

2,550

 

3.0%

 

10,786

 

 

10,776

 

0.1%

Average Length of Stay (b)

 

253.1

 

 

265.9

 

-4.8%

 

247.9

 

 

250.8

 

-1.2%

Revenue per Patient Day

$

420

 

$

401

 

4.8%

$

411

 

$

392

 

4.8%

EBITDA margin

 

14.4

%

 

14.6

%

-20 bps

 

15.2

%

 

16.7

%

-150 bps
 
Total Facility Results (c)
Revenue

$

780,232

 

$

743,824

 

4.9%

$

3,107,462

 

$

2,964,428

 

4.8%

Patient Days

 

1,317,124

 

 

1,317,849

 

-0.1%

 

5,286,879

 

 

5,241,288

 

0.9%

Admissions

 

44,848

 

 

42,872

 

4.6%

 

183,106

 

 

172,163

 

6.4%

Average Length of Stay (b)

 

29.4

 

 

30.7

 

-4.5%

 

28.9

 

 

30.4

 

-5.2%

Revenue per Patient Day

$

592

 

$

564

 

5.0%

$

588

 

$

566

 

3.9%

EBITDA margin

 

20.8

%

 

20.5

%

30 bps

 

21.6

%

 

22.5

%

-90 bps
 
(a) Results for the periods presented exclude the elderly care division of our U.K. operations and certain closed services.
(b) Average length of stay is defined as patient days divided by admissions.
(c) Revenue and revenue per patient day for the three months and year ended December 31, 2018 is adjusted to reflect the foreign currency exchange rate for the comparable periods of 2019 in order to eliminate the effect of changes in the exchange rate. The exchange rate used in the adjusted revenue and revenue per patient day amounts for the three months and year ended December 31, 2018 is 1.29 and 1.28, respectively.
 
Acadia Healthcare Company, Inc.
Reconciliation of Net Income Attributable to Acadia Healthcare Company, Inc. to Adjusted EBITDA
(Unaudited)
 

Three Months Ended December 31,

Year Ended December 31,

2019

2018

2019

2018

(in thousands)
 
Net (loss) income attributable to Acadia Healthcare Company, Inc. 

$

(11,254

)

$

(331,637

)

$

108,923

$

(175,750

)

Net income attributable to noncontrolling interests

 

941

 

 

108

 

 

1,199

 

264

 

Provision for (benefit from) income taxes

 

65

 

 

(9,807

)

 

25,866

 

6,532

 

Interest expense, net

 

43,710

 

 

47,704

 

 

187,094

 

185,410

 

Depreciation and amortization

 

41,767

 

 

39,472

 

 

164,044

 

158,832

 

EBITDA

 

75,229

 

 

(254,160

)

 

487,126

 

175,288

 

 
Adjustments:
Equity-based compensation expense (a)

 

2,985

 

 

2,728

 

 

17,307

 

22,001

 

Transaction-related expenses (b)

 

11,756

 

 

24,499

 

 

27,064

 

34,507

 

Debt extinguishment costs (c)

 

-

 

 

875

 

 

-

 

1,815

 

Legal settlements expense (d)

 

-

 

 

22,076

 

 

-

 

22,076

 

Loss on impairment (e)

 

54,386

 

 

337,889

 

 

54,386

 

337,889

 

Adjusted EBITDA

$

144,356

 

$

133,907

 

$

585,883

$

593,576

 

 
See footnotes on page 10.
Acadia Healthcare Company, Inc.
Reconciliation of Adjusted Income Attributable to Acadia Healthcare Company, Inc. to
Net Income Attributable to Acadia Healthcare Company, Inc.
(Unaudited)
 

Three Months Ended December 31,

Year Ended December 31,

2019

2018

2019

2018

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

$

(11,254

)

$

(331,637

)

$

108,923

 

$

(175,750

)

 
Adjustments to income:
Transaction-related expenses (b)

 

11,756

 

 

24,499

 

 

27,064

 

 

34,507

 

Tax reform impact (f)

 

-

 

 

-

 

 

-

 

 

(10,472

)

Debt extinguishment costs (c)

 

-

 

 

875

 

 

-

 

 

1,815

 

Legal settlements expense (d)

 

-

 

 

22,076

 

 

-

 

 

22,076

 

Loss on impairment (e)

 

54,386

 

 

337,889

 

 

54,386

 

 

337,889

 

Income tax effect of adjustments to income (g)

 

(9,860

)

 

(12,866

)

 

(11,244

)

 

(14,687

)

Adjusted income attributable to Acadia Healthcare Company, Inc.

$

45,028

 

$

40,836

 

$

179,129

 

$

195,378

 

 
Weighted-average shares outstanding - diluted (h)

 

87,963

 

 

87,508

 

 

87,816

 

 

87,415

 

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

$

0.51

 

$

0.47

 

$

2.04

 

$

2.24

 

 
See footnotes on page 10.
 

Acadia Healthcare Company, Inc.
Footnotes

We have included certain financial measures in this press release, including EBITDA, Adjusted EBITDA, and Adjusted income, 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 (loss) attributable to noncontrolling interests, provision for (benefit from) 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, legal settlements expense and loss on impairment. We define Adjusted income as net income (loss) adjusted for transaction-related expenses, tax reform impact, debt extinguishment costs, legal settlements expense, loss on impairment and income tax effect of adjustments to income.

EBITDA, Adjusted EBITDA, and Adjusted income 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 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 may not be comparable to similarly titled measures of other companies. We have included information concerning EBITDA, Adjusted EBITDA, and Adjusted income 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 when reporting their results. Our presentation of EBITDA, Adjusted EBITDA, and Adjusted income should not be construed as an inference that our future results will be unaffected by unusual or nonrecurring items.

The Company is not able to provide a reconciliation of projected Adjusted EBITDA and adjusted earnings per diluted share, where provided, to expected results due to the unknown effect, timing and potential significance of transaction-related expenses and the tax effect of such expenses.

(a) Represents the equity-based compensation expense of Acadia.

(b) Represents transaction-related expenses incurred by Acadia primarily related to termination, restructuring, strategic review and other acquisition-related costs.

(c) Represents debt extinguishment costs recorded in connection with the repricing amendments to the Amended and Restated Credit Agreement in March 2018 and the repayment of the 9.0% and 9.5% Revenue Bonds in December 2018.

(d) Represents $19.0 million related to the Company’s billing for lab services in West Virginia and $3.1 million related to the resolution of the shareholder class action lawsuit in 2011 in connection with our merger with PHC.

(e) For the three months and year ended December 31, 2019, represents a non-cash long-lived asset impairment charge of $27.2 million related to two closed U.S. facilities and $27.2 million related to certain closed U.K. facilities. For the three months and year ended December 31, 2018, represents a non-cash goodwill impairment charge of $325.9 million and a non-cash long-lived asset impairment charge of $12.0 million related to certain U.K. facilities.

(f) Represents tax benefit related to the enactment of the Tax Cuts and Jobs Act.

(g) Represents the income tax effect of adjustments to income based on tax rates of 18.1% and 7.0% for the three months ended December 31, 2019 and 2018, respectively, and 17.2% and 14.0% for the year ended December 31, 2019 and 2018, respectively.

(h) For the three months ended December 31, 2019 and three months and year ended December 31, 2018, approximately 0.2 million, 0.1 million and 0.1 million, respectively, of the outstanding restricted stock and shares of common stock issuable upon exercise of outstanding stock option awards have been included in the calculation of weighted-average shares outstanding-diluted. These shares are excluded from the calculation of diluted earnings per share in the condensed consolidated statement of operations because the net loss for the respective periods cause such securities to be anti-dilutive.

View source version on businesswire.com:https://www.businesswire.com/news/home/20200227005895/en/

CONTACT: Gretchen Hommrich

Director, Investor Relations

(615) 861-6000

KEYWORD: UNITED STATES NORTH AMERICA TENNESSEE

INDUSTRY KEYWORD: HOSPITALS HEALTH MENTAL HEALTH

SOURCE: Acadia Healthcare Company, Inc.

Copyright Business Wire 2020.

PUB: 02/27/2020 04:05 PM/DISC: 02/27/2020 04:06 PM

http://www.businesswire.com/news/home/20200227005895/en