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Acadia Healthcare Reports Fourth Quarter 2020 Results

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Company Provides Full Year and First Quarter 2021 Guidance

Expects to Complete Debt Refinancing in March 2021

Acadia Healthcare Company, Inc. (NASDAQ: ACHC) today announced financial results for the fourth quarter and year ended December 31, 2020.

On January 19, 2021, the Company closed on the sale of Acadia’s business operations in the United Kingdom, operating under the name of The Priory Group, to Waterland Private Equity. The U.K. business and its results have been presented as discontinued operations for all periods in this release. Supplemental information for discontinued operations has been included on pages 11 and 12.

Fourth Quarter 2020 Results

The Company reported revenue from continuing operations of $541.3 million for the fourth quarter of 2020, compared with $501.2 million for the fourth quarter of 2019. Net loss attributable to Acadia stockholders for the fourth quarter of 2020 was $783.7 million, or $8.78 per diluted share, compared with a net loss of $11.3 million, or $0.13 per diluted share, for the fourth quarter of 2019. The results for the fourth quarter of 2020 include a loss from discontinued operations of $828.7 million, net of income taxes, primarily related to the loss on sale of the U.K. business of $867.3 million.

Including discontinued operations, combined revenue for the fourth quarter of 2020 was $843.3 million and combined adjusted EBITDA was $207.5 million. Adjusted income attributable to Acadia stockholders per diluted share was $1.13 for the fourth quarter of 2020, which includes discontinued operations. Adjustments to income include transaction-related expenses, debt extinguishment costs, loss on impairment, loss on sale and the income tax effect of adjustments to income. Financial results for continuing operations combined with discontinued operations are presented, along with a reconciliation of all non-GAAP financial results in this press release, beginning on page 9.

Results for the fourth quarter of 2020 include other income of $32.8 million related to the Provider Relief Fund ("PRF") established by the Coronavirus Aid, Relief, and Economic Security ("CARES") Act. The Company’s recognition of this income was based on revised guidance in the Consolidated Appropriations Act, 2021 enacted in December 2020. The Company’s lost revenues and additional expenses incurred in the year ended December 31, 2020 as a result of the COVID-19 pandemic exceeded the grant income recognized in 2020.

For the fourth quarter, Acadia’s U.S. same facility revenue increased 7.6% compared with the fourth quarter of 2019, including a 3.6% increase in patient days and a 3.8% increase in revenue per patient day.

Debbie Osteen, Chief Executive Officer of Acadia Healthcare Company, remarked, "We are very pleased with our financial and operating results for the fourth quarter of 2020, capping off an extraordinary and challenging year for Acadia. As the global COVID-19 pandemic continues to affect communities across the nation, we are mindful of our critical role as a leading provider of behavioral healthcare services. The ongoing uncertainties and economic and societal concerns have resulted in continued strong demand for our services, especially for those already struggling with behavioral health and addiction issues. As always, our primary mission is to support our patients and the communities that we serve, and we commend Acadia’s employees and clinicians for their dedication and heroic efforts to provide the highest quality care in a safe and accessible manner, especially during these challenging times. We are fortunate to have an experienced team across our operations and a proven operating model that supports our ability to execute our strategy in a dynamic environment.

"At the end of 2020, we reached an agreement to sell our U.K. operations to Waterland Private Equity, which closed in January. This transaction is a significant milestone for Acadia, and we believe the sale will maximize long-term value for our stockholders. We are excited about the opportunities in the U.S. to extend our market reach and enhance our service offerings. Our U.S. operations showed very favorable results with improvement across all key metrics for the fourth quarter of 2020, driven by solid volumes and strong cost management.

"During the fourth quarter of 2020, we added 34 beds to our existing U.S. operations, and, for the full year, we added 240 beds to existing facilities and 220 beds through the opening of two joint venture facilities, as well as the opening of six comprehensive treatment centers ("CTC") in the U.S. In December, we opened Ascension St. Thomas Behavioral Health Hospital, a new 76-bed facility, through our joint venture with Ascension St. Thomas in Nashville, Tennessee. Also, in December, we announced a joint venture partnership with Henry Ford Health System for a 192-bed inpatient facility, which will serve the Detroit metro area when it opens in late 2022. We continue to execute on part of our strategy by partnering with health systems and hospitals across the country.

Debt Refinancing, Cash and Liquidity

As of December 31, 2020, the Company had $378.7 million in cash and cash equivalents, which excludes cash held by the U.K. operations. The Company voluntarily paid down $105 million of Term Loan B facility under its amended and restated credit agreement in January 2021 prior to completion of the U.K transaction. From the sale of the U.K. operations, the Company received $1,525 million of gross proceeds before deducting the settlement of foreign currency hedging liabilities of $85 million, cash retained by the buyer of approximately $75 million and transaction costs of $16 million. The Company initially used the sale proceeds of approximately $1,425 million (or $1,350 million, net of cash retained by the buyer) to repay all of its outstanding Term Loan A facility of $312 million and Term Loan B of $768 million and added $345 million of cash to the balance sheet.

On January 29, 2021, the Company sent conditional notices of full redemption for $650 million of 5.265% Senior Notes due 2023 and $390 million of 6.500% Senior Notes due 2024 to the holders of such notes. The redemption of this $1,040 million of additional debt, along with breakage costs of $6 million and estimated transaction costs of $9 million, is expected to be completed in early March and to be funded with cash from the balance sheet of $430 million and proceeds from a new senior secured credit facility of $625 million. The Company expects to enter a new term loan and revolver as part of a five-year senior secured credit facility.

Upon completion of these transactions, Acadia’s debt structure is expected to include $1,025 million of a new term loan and revolving credit facility, $450 million of 5.500% Senior Notes due 2028, and $475 million of 5.000% Senior Notes due 2029, and the Company’s net leverage ratio is expected to be below 3.0x.

"As intended, we used the proceeds from the U.K. transaction to pay down our outstanding debt," added Osteen. "We are pleased to refinance our other outstanding debt and improve our leverage profile. In addition, we continue to realize the cost savings from the steps we have taken in 2019 and 2020 related to our expense and cash management strategies. As a result, Acadia’s balance sheet is very strong with ample liquidity and capital to invest in and grow our business."

Financial Guidance

Acadia today established financial guidance for 2021, as follows:

  • Revenue in a range of $2.23 billion to $2.28 billion;

  • Adjusted EBITDA in a range of $490 million to $520 million;

  • Adjusted earnings per diluted share in a range of $2.20 to $2.45;

  • Interest expense of approximately $80 to $85 million of which $11 million of annualized interest expense is expected to be eliminated after the first quarter;

  • A tax rate of approximately 26.5%;

  • Depreciation and amortization expense in a range of $105 million to $110 million;

  • Stock compensation expense of approximately $28 million;

  • Operating cash flows in a range of $250 million to $285 million, which includes repayment in 2021 of $53 million of the $84 million of total Medicare Accelerated and Advanced Payment Program and employer payroll tax deferrals from the CARES Act; and

  • Total capital expenditures in a range of $285 million to $325 million, including approximately $45 million for maintenance capital expenditures.

Acadia also established financial guidance for the first quarter of 2021, as follows:

  • Revenue in a range of $540 million to $550 million;

  • Adjusted EBITDA in a range of $110 million to $115 million; and

  • Adjusted earnings per diluted share in a range of $0.40 to $0.45.

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

Looking Ahead

Osteen added, "Looking ahead to 2021, we expect to add approximately 300 beds to existing facilities and 170 beds through the opening of one wholly owned facility and one joint venture facility. Additionally, due to the strong demand for treatment of patients with opioid use disorder, we expect to open 11 CTCs in 2021. Our strategic investments and strong pipeline of bed expansions, de novo facilities and joint ventures will provide additional growth opportunities for Acadia to reach more patients in new and existing markets.

"With our singular strategic focus on our U.S. operations and a strong financial position to support our growth initiatives, Acadia is well-positioned to meet the expected demand for mental health and addiction treatment. Across our operations, we will strive to deliver the highest quality of patient care, extend our market reach, and advance our market leadership as a behavioral healthcare facilities operator."

Conference Call

Acadia will hold a conference call to discuss its fourth quarter financial results at 10:00 a.m. Eastern Time on Friday, February 26, 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 through March 12, 2021.

About Acadia

Acadia is a leading provider of behavioral healthcare services across the United States. Acadia operates a network of 227 behavioral healthcare facilities with approximately 9,900 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 risk that Acadia does not complete its debt refinancing transactions on terms and conditions acceptable to Acadia; (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 December 31,

Year Ended December 31,

2020

2019

2020

2019

(In thousands, except per share amounts)

Revenue

$

541,276

$

501,225

$

2,089,929

$

2,008,381

Salaries, wages and benefits (including equity-based compensation

expense of $6,246, $2,985, $22,504 and $17,307, respectively)

301,658

273,406

1,154,522

1,107,357

Professional fees

29,480

30,062

120,489

118,451

Supplies

22,213

21,768

87,241

85,534

Rents and leases

9,387

8,777

37,362

35,486

Other operating expenses

59,732

65,851

262,272

259,536

Other income

(32,819

)

-

(32,819

)

-

Depreciation and amortization

24,958

22,667

95,256

87,923

Interest expense, net

39,707

44,641

158,105

187,325

Debt extinguishment costs

3,962

-

7,233

-

Loss on impairment

4,751

27,217

4,751

27,217

Transaction-related expenses

2,162

9,035

11,720

21,157

Total expenses

465,191

503,424

1,906,132

1,929,986

Income (loss) from continuing operations before income taxes

76,085

(2,199

)

183,797

78,395

Provision for income taxes

29,929

9,993

40,606

25,085

Income (loss) from continuing operations

46,156

(12,192

)

143,191

53,310

(Loss) income from discontinued operations, net of taxes

(828,697

)

1,879

(812,390

)

56,812

Net (loss) income

(782,541

)

(10,313

)

(669,199

)

110,122

Net income attributable to noncontrolling interests

(1,131

)

(941

)

(2,933

)

(1,199

)

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

$

(783,672

)

$

(11,254

)

$

(672,132

)

$

108,923

Basic earnings (loss) per share attributable to Acadia Healthcare

Company, Inc. stockholders:

Income (loss) from continuing operations attributable to

Acadia Healthcare Company, Inc.

$

0.51

$

(0.15

)

$

1.60

$

0.59

(Loss) income from discontinued operations

$

(9.42

)

$

0.02

$

(9.25

)

$

0.65

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

$

(8.91

)

$

(0.13

)

$

(7.65

)

$

1.24

Diluted earnings (loss) per share attributable to Acadia Healthcare

Company, Inc. stockholders:

Income (loss) from continuing operations attributable to

Acadia Healthcare Company, Inc.

$

0.50

$

(0.15

)

$

1.58

$

0.59

(Loss) income from discontinued operations

$

(9.28

)

$

0.02

$

(9.17

)

$

0.65

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

$

(8.78

)

$

(0.13

)

$

(7.59

)

$

1.24

Weighted-average shares outstanding:

Basic

87,952

87,674

87,875

87,612

Diluted

89,233

87,674

88,595

87,816

Acadia Healthcare Company, Inc.

Condensed Consolidated Balance Sheets

(Unaudited)

December 31,

2020

2019

(In thousands)

ASSETS

Current assets:

Cash and cash equivalents

$

378,697

$

99,535

Accounts receivable, net

273,551

288,863

Other current assets

61,332

64,967

Current assets held for sale

1,809,815

88,846

Total current assets

2,523,395

542,211

Property and equipment, net

1,622,896

1,499,587

Goodwill

2,105,264

2,085,104

Intangible assets, net

68,535

68,826

Deferred tax assets

3,209

3,339

Operating lease right-of-use assets

96,937

97,795

Other assets

79,126

55,106

Noncurrent assets held for sale

-

2,527,174

Total assets

$

6,499,362

$

6,879,142

LIABILITIES AND EQUITY

Current liabilities:

Current portion of long-term debt

$

153,478

$

43,679

Accounts payable

87,815

90,257

Accrued salaries and benefits

124,912

93,595

Current portion of operating lease liabilities

18,916

18,119

Other accrued liabilities

178,453

69,234

Derivative instrument liabilities

84,584

-

Current liabilities held for sale

...

660,027

148,692

Total current liabilities

1,308,185

463,576

Long-term debt

2,968,948

...

3,105,420

Deferred tax liabilities

50,017

22,820

Operating lease liabilities

84,029

85,643

Noncurrent derivative instrument liabilities

-

68,915

Other liabilities

133,412

107,152

Noncurrent liabilities held for sale

-

487,084

Total liabilities

4,544,591

4,340,610

Redeemable noncontrolling interests

55,315

33,151

Equity:

Common stock

880

877

Additional paid-in capital

2,580,327

2,557,642

Accumulated other comprehensive loss

(371,365

)

(414,884

)

(Accumulated deficit) retained earnings

(310,386

)

361,746

Total equity

1,899,456

2,505,381

Total liabilities and equity

$

6,499,362

$

6,879,142

Acadia Healthcare Company, Inc.

Condensed Consolidated Statements of Cash Flows

(Unaudited)

Year Ended December 31,

2020

2019

(In thousands)

Operating activities:

Net (loss) income

$

(669,199

)

$

110,122

Adjustments to reconcile net income (loss) to net cash provided by operating activities:

Depreciation and amortization

95,256

87,923

Amortization of debt issuance costs

12,636

11,987

Equity-based compensation expense

22,504

17,307

Deferred income taxes

53,108

1,089

Loss (income) from discontinued operations, net of taxes

812,390

(56,812

)

Debt extinguishment costs

7,233

-

Loss on impairment

4,751

27,217

Other

1,041

3,916

Change in operating assets and liabilities, net of effect of acquisitions:

Accounts receivable, net

15,340

(18,714

)

Other current assets

9,675

(501

)

Other assets

1,519

(2,372

)

Accounts payable and other accrued liabilities

77,993

(20,135

)

Accrued salaries and benefits

9,632

5,540

Other liabilities

48,965

16,862

Net cash provided by continuing operating activities

502,844

183,429

Net cash provided by discontinued operating activities

155,963

149,475

Net cash provided by operating activities

658,807

332,904

Investing activities:

Cash paid for acquisitions, net of cash acquired

-

(44,900

)

Cash paid for capital expenditures

(216,615

)

(225,061

)

Cash paid for real estate acquisitions

(8,349

)

(7,618

)

Proceeds from sale of property and equipment

92

11,765

Settlement of foreign currency derivatives

-

105,008

Other

(13,365

)

12,975

Net cash used in continuing investing activities

(238,237

)

(147,831

)

Net cash used in discontinued investing activities

(43,602

)

(53,310

)

Net cash used in investing activities

(281,839

)

(201,141

)

Financing activities:

Borrowings on long-term debt

925,000

-

Borrowings on revolving credit facility

100,000

76,573

Principal payments on revolving credit facility

(100,000

)

(76,573

)

Principal payments on long-term debt

(41,291

)

(52,984

)

Repayment of long-term debt

(909,785

)

-

Payment of debt issuance costs

(18,295

)

-

Common stock withheld for minimum statutory taxes, net

184

(1,648

)

Distributions to noncontrolling interests

(916

)

(154

)

Other

(3,146

)

(4,369

)

Net cash used in continuing financing activities

(48,249

)

(59,155

)

Net cash used in discontinued financing activities

(3,250

)

(2,472

)

Net cash used in financing activities

(51,499

)

(61,627

)

Effect of exchange rate changes on cash

4,087

3,546

Net increase in cash and cash equivalents, including cash classified within

current assets held for sale

329,556

73,682

Less: cash classified within current assets held for sale

(75,051

)

(24,657

)

Net increase in cash and cash equivalents

254,505

49,025

Cash and cash equivalents at beginning of the period

124,192

50,510

Cash and cash equivalents at end of the period

$

378,697

$

99,535

Effect of acquisitions:

Assets acquired, excluding cash

$

20,200

$

48,594

Liabilities assumed

(53

)

(3,694

)

Redeemable noncontrolling interest resulting from an acquisition

(20,147

)

-

Cash paid for acquisitions, net of cash acquired

$

-

$

44,900

Acadia Healthcare Company, Inc.

Operating Statistics

(Unaudited, Revenue in thousands)

Three Months Ended December 31,

Year Ended December 31,

2020

2019

% Change

2020

2019

% Change

U.S. Same Facility Results (a)

Revenue

$

538,023

$

500,241

7.6

%

$

2,076,332

$

1,997,825

3.9

%

Patient Days

669,126

645,882

3.6

%

2,649,430

2,584,470

2.5

%

Admissions

42,352

42,065

0.7

%

170,704

171,812

-0.6

%

Average Length of Stay (b)

15.8

15.4

2.9

%

15.5

15.0

3.2

%

Revenue per Patient Day

$

804

$

775

3.8

%

$

784

$

773

1.4

%

Adjusted EBITDA margin (c)

34.0

%

24.5

%

950 bps

27.9

%

25.4

%

250 bps

U.S. Facility Results

Revenue

$

541,276

$

501,225

8.0

%

$

2,089,929

$

2,008,381

4.1

%

Patient Days

671,840

652,415

3.0

%

2,667,762

2,613,164

2.1

%

Admissions

42,639

42,222

1.0

%

172,277

172,320

0.0

%

Average Length of Stay (b)

15.8

15.5

2.0

%

15.5

15.2

2.1

%

Revenue per Patient Day

$

806

$

768

4.9

%

$

783

$

769

1.9

%

Adjusted EBITDA margin (c)

33.5

%

24.3

%

920 bps

27.5

%

25.1

%

240 bps

(a) Same facility results for the periods presented include facilities we have operated for more than one year and exclude certain closed services.

(b) Average length of stay is defined as patient days divided by admissions.

(c) For the three months and year ended December 31, 2020, includes other income of $32.8 million.

Acadia Healthcare Company, Inc.

Reconciliation of Net (Loss) Income Attributable to Acadia Healthcare Company, Inc. to Adjusted EBITDA

(Unaudited)

Three Months Ended December 31,

Year Ended December 31,

2020

2019

2020

2019

(in thousands)

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

$

(783,672

)

$

(11,254

)

$

(672,132

)

$

108,923

Net income attributable to noncontrolling interests

1,131

941

2,933

1,199

Loss (income) from discontinued operations, net of taxes

828,697

(1,879

)

812,390

(56,812

)

Provision for income taxes

29,929

9,993

40,606

25,085

Interest expense, net

39,707

44,641

158,105

187,325

Depreciation and amortization

24,958

22,667

95,256

87,923

Continuing operations EBITDA

140,750

65,109

437,158

353,643

Adjustments:

Equity-based compensation expense (a)

6,246

2,985

22,504

17,307

Transaction-related expenses (b)

2,162

9,035

11,720

21,157

Debt extinguishment costs (c)

3,962

-

7,233

-

Loss on impairment (d)

4,751

27,217

4,751

27,217

Continuing operations adjusted EBITDA

$

157,871

$

104,346

$

483,366

$

419,324

Continuing operations adjusted EBITDA margin

29.2

%

20.8

%

23.1

%

20.9

%

Discontinued operations adjusted EBITDA

$

49,596

$

40,010

$

160,776

$

166,559

Discontinued operations adjusted EBITDA margin

16.4

%

14.3

%

14.4

%

15.2

%

Combined adjusted EBITDA

$

207,467

$

144,356

$

644,142

$

585,883

Combined adjusted EBITDA margin

24.6

%

18.5

%

20.1

%

18.9

%

See footnotes on page 13.

Acadia Healthcare Company, Inc.

Reconciliation of Adjusted Income Attributable to Acadia Healthcare Company, Inc. to

Net (Loss) Income Attributable to Acadia Healthcare Company, Inc.

(Unaudited)

Three Months Ended December 31,

Year Ended December 31,

2020

2019

2020

2019

(in thousands, except per share amounts)

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

$

(783,672

)

$

(11,254

)

$

(672,132

)

$

108,923

Loss (income) from discontinued operations, net of taxes

828,697

(1,879

)

812,390

(56,812

)

Adjustments to income:

Transaction-related expenses (b)

2,162

9,035

11,720

21,157

Debt extinguishment costs (c)

3,962

-

7,233

-

Loss on impairment (d)

4,751

27,217

4,751

27,217

Provision for income taxes

29,929

9,993

40,606

25,085

Adjusted income from continuing operations before income taxes

attributable to Acadia Healthcare Company, Inc.

85,829

33,112

204,568

125,570

Adjusted income from discontinued operations before income taxes

31,483

21,841

86,258

90,669

Adjusted income before income taxes attributable to

Acadia Healthcare Company, Inc.

117,312

54,953

290,826

216,239

Income tax effect of adjustments to income (e)

16,124

9,925

44,496

37,110

Adjusted income attributable to Acadia Healthcare Company, Inc.

$

101,188

$

45,028

$

246,330

$

179,129

Weighted-average shares outstanding - diluted (f)

89,233

87,963

88,595

87,816

Adjusted income attributable to Acadia Healthcare Company, Inc.

per diluted share

$

1.13

$

0.51

$

2.78

$

2.04

See footnotes on page 13.

Acadia Healthcare Company, Inc.

Discontinued Operations Supplemental Financial Information

(Unaudited)

Statements of Discontinued Operations

Three Months Ended December 31,

Year Ended December 31,

2020

2019

2020

2019

(in thousands)

Revenue

$

301,996

$

279,007

$

1,119,768

$

1,099,081

Salaries, wages and benefits

166,620

155,375

632,134

609,823

Professional fees

35,027

33,333

127,291

122,532

Supplies

10,011

9,632

38,285

37,527

Rents and leases

12,890

12,592

47,748

46,743

Other operating expenses

27,852

28,065

113,534

115,897

Depreciation and amortization

19,196

19,100

74,935

76,121

Interest expense, net

(1,083

)

(931

)

(417

)

(231

)

Loss on sale

867,324

-

867,324

-

Loss on impairment

-

27,169

20,239

27,169

Transaction-related expenses

984

2,721

8,719

5,907

Total expenses

1,138,821

287,056

1,929,792

1,041,488

(Loss) income from discontinued operations before income taxes

(836,825

)

(8,049

)

(810,024

)

57,593

(Benefit from) provision for income taxes

(8,128

)

(9,928

)

2,366

781

(Loss) income from discontinued operations

(828,697

)

1,879

(812,390

)

56,812

Reconciliation of Net (Loss) Income from Discontinued Operations to Discontinued Operations Adjusted EBITDA

Loss (income) from discontinued operations, net of taxes

$

(828,697

)

$

1,879

$

(812,390

)

$

56,812

Provision for income taxes

(8,128

)

(9,928

)

2,366

781

Interest expense, net

(1,083

)

(931

)

(417

)

(231

)

Depreciation and amortization

19,196

19,100

74,935

76,121

Discontinued operations EBITDA

(818,712

)

10,120

(735,506

)

133,483

Adjustments:

Transaction-related expenses (b)

984

2,721

8,719

5,907

Loss on impairment (d)

-

27,169

20,239

27,169

Loss on sale (g)

867,324

-

867,324

-

Discontinued operations adjusted EBITDA

$

49,596

$

40,010

$

160,776

$

166,559

Discontinued operations adjusted EBITDA margin

16.4

%

14.3

%

14.4

%

15.2

%

Reconciliation of Net (Loss) Income from Discontinued Operations to Adjusted Income from Discontinued Operations

Loss (income) from discontinued operations, net of taxes

$

(828,697

)

$

1,879

$

(812,390

)

$

56,812

Adjustments to income:

Transaction-related expenses (b)

984

2,721

8,719

5,907

Loss on impairment (d)

-

27,169

20,239

27,169

Loss on sale (g)

867,324

-

867,324

-

(Benefit from) provision for income taxes

(8,128

)

(9,928

)

2,366

781

Adjusted income from discontinued operations before income taxes

$

31,483

$

21,841

$

86,258

$

90,669

Acadia Healthcare Company, Inc.

Discontinued Operations Operating Statistics

(Unaudited, Revenue in thousands)

Three Months Ended December 31,

Year Ended December 31,

2020

2019

% Change

2020

2019

% Change

U.K. Same Facility Results (a,c)

Revenue

$

279,301

$

260,772

7.1

%

$

1,027,157

$

1,006,333

2.1

%

Patient Days

507,055

497,279

2.0

%

1,982,396

2,000,755

-0.9

%

Admissions

2,176

2,265

-3.9

%

8,696

9,346

-7.0

%

Average Length of Stay (b)

233.0

219.5

6.1

%

228.0

214.1

6.5

%

Revenue per Patient Day

$

551

$

524

5.0

%

$

518

$

503

3.0

%

Adjusted EBITDA margin

18.2

%

16.1

%

210 bps

16.3

%

16.7

%

-40 bps

U.K. Facility Results (c)

Revenue

$

301,996

$

286,134

5.5

%

$

1,119,768

$

1,104,599

1.4

%

Patient Days

638,444

664,709

-4.0

%

2,578,284

2,673,715

-3.6

%

Admissions

2,378

2,626

-9.4

%

9,872

10,786

-8.5

%

Average Length of Stay (b)

268.5

253.1

6.1

%

261.2

247.9

5.4

%

Revenue per Patient Day

$

473

$

430

9.9

%

$

434

$

413

5.1

%

Adjusted EBITDA margin

16.4

%

14.4

%

200 bps

14.4

%

15.2

%

-80 bps

(a) Same facility results for the periods presented include facilities we have operated for more than one year and exclude the elderly care division.

(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, 2019 is adjusted to reflect the foreign currency exchange rate for the comparable periods of 2020 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, 2019 is 1.32 and 1.28, respectively.

Acadia Healthcare Company, Inc.

Footnotes

We have included certain financial measures in this press release, including Continuing Operations EBITDA, Continuing Operations Adjusted EBITDA, Continuing Operations Adjusted EBITDA margin, Continuing Operations Adjusted income before income taxes, Discontinued Operations EBITDA, Discontinued Operations Adjusted EBITDA, Discontinued Operations Adjusted EBITDA margin, Adjusted income from discontinued operations before income taxes and Adjusted income, which are "non-GAAP financial measures" as defined under the rules and regulations promulgated by the SEC.

We define Continuing Operations EBITDA as net (loss) 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 Continuing Operations Adjusted EBITDA as Continuing Operations EBITDA adjusted for equity-based compensation expense, transaction-related expenses, debt extinguishment costs and loss on impairment. We define Continuing Operations Adjusted EBITDA margin as Continuing Operations Adjusted EBITDA divided by revenue. We define Continuing Operations Adjusted income before income taxes as net (loss) income adjusted for net income attributable to noncontrolling interests, loss (income) from discontinued operations, net of taxes, transaction-related expenses, debt extinguishment costs, loss on impairment and provision for income taxes.

We define Discontinued Operations EBITDA as loss (income) from discontinued operations, net of taxes, provision for income taxes, net interest expense and depreciation and amortization. We define Discontinued Operations Adjusted EBITDA as Discontinued Operations EBITDA adjusted for transaction-related expenses, loss on impairment and loss on sale. We define Discontinued Operations Adjusted EBITDA margin as Discontinued Operations Adjusted EBITDA divided by revenue from discontinued operations. 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 impairment, loss on sale and (benefit from) provision for income taxes.

We define Combined Adjusted EBITDA as the sum of Continuing Operations Adjusted EBITDA and Discontinued Operations Adjusted EBITDA. 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 Adjusted EBITDA is not a measurement determined in accordance with GAAP and is thus susceptible to varying calculations, Adjusted EBITDA, 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, management transition and other similar costs.

(c) Represents debt extinguishment costs recorded in connection with the redemption of the 6.125% Senior Notes and 5.125% Senior Notes in June 2020, issuance of the 5.000% Senior Notes in October 2020 and the Fourth Repricing Facilities Amendment to the Amended and Restated Credit Facility in November 2020.

(d) Represents non-cash long-lived asset impairment charges related to certain facility closures.

(e) Represents the income tax effect of adjustments to income based on tax rates of 13.7% and 18.1% for the three months ended December 31, 2020 and 2019, respectively, and 15.3% and 17.2% for the year ended December 31, 2020 and 2019, respectively.

(f) For the three months ended December 31, 2019, approximately 0.3 million 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 three months ended December 31, 2019 causes such securities to be anti-dilutive.

(g) Represents the loss on sale, including a non-cash goodwill impairment charge of $356.2 million, recorded in connection with the U.K. sale.

View source version on businesswire.com: https://www.businesswire.com/news/home/20210225006226/en/

Contacts

Gretchen Hommrich
Director, Investor Relations
(615) 861-6000