Acadia Healthcare (ACHC) Q2 Earnings Beat on Higher Admissions
Acadia Healthcare Company, Inc. ACHC reported second-quarter 2023 adjusted earnings of 92 cents per share, which beat the Zacks Consensus Estimate by 10.8%. The bottom line improved 9.5% year over year.
Total revenues amounted to $731.3 million, which advanced 12.2% year over year in the quarter under review. The top line outpaced the consensus mark by 3.4%.
The quarterly results benefited on the back of improved patient volumes stemming from sustained demand for ACHC's behavioral healthcare services and extension of its service lines into new states. However, the upside has been partly offset by an elevated expense level.
Acadia Healthcare Company, Inc. Price, Consensus and EPS Surprise
Acadia Healthcare Company, Inc. price-consensus-eps-surprise-chart | Acadia Healthcare Company, Inc. Quote
Q2 Operations
Total U.S. same-facility revenues rose 11.4% year over year to $721.3 million in the second quarter, higher than our estimate of $666.5 million. The growth came on the back of 6.1% improvement in revenue per patient day and 4.9% growth in patient days. Our estimate indicated revenue per patient day to advance 4.7% year over year in the quarter under review. Admissions increased 4.3% year over year, while our estimate suggested the metric to improve 4.9% year over year. Average length of stay inched up 0.6% year over year.
In the overall U.S. facility, patient days grew 5.1% year over year in the second quarter. Revenue per patient day improved 6.8% year over year, while our estimate indicated the metric to rise 7% year over year. Admissions increased 6.3% year over year in the quarter under review. However, the average length of stay dipped 1.2% year over year.
Adjusted EBITDA of $174.5 million advanced 10.9% year over year and came higher than our estimate of $156.2 million. The adjusted EBITDA margin deteriorated 20 basis points year over year to 23.9% in the quarter under review but beat our estimate of 22.3%.
Total expenses escalated 17.1% year over year to $634.9 million due to increased salaries, wages and benefits, professional fees, other operating expenses, interest expenses and transaction-related expenses.
Acadia Healthcare added 98 beds to its existing operations in the second quarter.
Financial Update (as of Jun 30, 2023)
Acadia Healthcare exited the second quarter with cash and cash equivalents of $112.2 million, which climbed 14.9% from the 2022-end level. It had a leftover capacity of $505 million under its $600 million revolving credit facility at the second-quarter end.
Total assets of $5,150.2 million increased 3.3% from the figure at 2022 end.
Long-term debt amounted to $1,372.4 million, which inched up 0.6% from the figure as of Dec 31, 2022. The current portion of the long-term debt was $23.9 million.
Total equity rose 3.8% from the 2022-end level to $2,921 million. The net leverage ratio stood at around 2X at the second-quarter end.
In the first half of 2023, ACHC generated cash flows from operations of $208.2 million, which declined 7.9% from the prior-year comparable period.
2023 Guidance
On the basis of the results observed in the first half of 2023, management has increased its outlook for the year with respect to certain metrics.
Revenues are presently forecasted to be between $2.86 billion and $2.90 billion, up from the prior view of $2.82-$2.88 billion. The midpoint of the revised guidance implies a rise of 10.3% from the 2022 reported figure.
Adjusted EBITDA is anticipated to be within $655-$685 million, higher than the previous outlook of $635-$675 million. The midpoint of the updated view indicates an improvement of 12.9% from the 2022 figure.
Adjusted earnings per share is estimated to lie between $3.25 and $3.50, up from the prior outlook of $3.10-$3.40. The midpoint of the revised guidance suggests 12.1% growth from the 2022 figure.
Interest expenses are forecasted to remain in the band of $82-$85 million, compared with the earlier view of $80-$85 million.
Acadia Healthcare is on track to add 300 beds to its existing facilities this year. It also remains on track to inaugurate six comprehensive treatments centers in 2023.
Meanwhile, management reiterated its 2023 view for some other metrics. Depreciation and amortization expenses are anticipated to be between $125 million and $135 million in 2023. Tax rate is expected to be within 25-26%, while stock compensation expenses are predicted to be between $30-$35 million.
Operating cash flows are expected to be between $450 million and $500 million. Capital expenditures for expansion initiatives are estimated to stay between $350 million and $400 million, while the same for maintenance is projected to be $40-$50 million. IT capital expenditures are expected to stay in the $35-$45 million band.
Zacks Rank
Acadia Healthcare currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Other Medical Sector Releases
Of the Medical sector players that have reported second-quarter 2023 results so far, the bottom-line results of Molina Healthcare, Inc. MOH, Boston Scientific Corporation BSX and Edwards Lifesciences Corporation EW beat the Zacks Consensus Estimate.
Molina Healthcare reported second-quarter 2023 adjusted earnings per share (EPS) of $5.65, which beat the Zacks Consensus Estimate by 11.9%. The bottom line improved 24.2% year over year. Total revenues of $8,327 million improved 3.4% year over year in the quarter under review. Also, the top line beat the consensus mark by 0.5%. Premium revenues of MOH were $8,042 million in the second quarter, which rose 3.1% year over year. As of Jun 30, 2023, total membership increased 1.1% year over year to roughly 5.2 million members.
Boston Scientific posted adjusted EPS of 53 cents for the second quarter of 2023, up 20.5% from the year-ago figure. The figure also exceeded the Zacks Consensus Estimate by 8.2%. BSX's second-quarter revenues of $3.59 billion improved 11% year over year on a reported basis and 12% on an operational basis (at a constant exchange rate or CER). The top line exceeded the consensus estimate by 2.6%. There was a 13.8% rise in gross profit to $2.54 billion. In the second quarter, revenues rose 9.1% in the United States on a reported basis (same operationally). Revenues were up 9.6% in the Europe, Middle East and Africa region and up 18% in the Asia Pacific zone.
Edwards Lifesciences delivered adjusted EPS of 66 cents in second-quarter 2023, beating the Zacks Consensus Estimate by 1.5%. The figure also increased 4.8% year over year. Second-quarter net sales of EW were $1.53 billion, up 11.4% year over year on a reported basis. The metric topped the consensus estimate by 1.7%. In the second quarter, global sales in the Transcatheter Aortic Valve Replacement product group amounted to $991.6 million, up 9.3% year over year. The gross profit came in at $1.19 billion, up 7.5%. The gross margin contracted 281 basis points to 77.6%.
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