UNITED STATES
SECURITIES
AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
FORM 8-K
CURRENT REPORT
PURSUANT
TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of report (Date of earliest event reported): February 21, 2018
Acadia Healthcare Company, Inc.
(Exact
Name of Registrant as Specified in Its Charter)
Delaware | 001-35331 | 45-2492228 | ||
(State or Other Jurisdiction
of Incorporation) |
(Commission
File Number) |
(IRS Employer
Identification No.) |
6100 Tower Circle, Suite 1000
(Address of Principal
Executive Offices)
(615) 861-6000
(Registrant's Telephone Number, including
Area Code)
Not Applicable
(Former Name or Former Address, if Changed
Since Last Report)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
⃞ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
⃞ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
⃞ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
⃞ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
Emerging growth company ⃞
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ⃞
Item 2.02 Results of Operations and Financial Condition.
On February 21, 2018, Acadia Healthcare Company, Inc. (“Acadia”) issued a press release announcing, among other things, Acadia’s operating and financial results for the fourth quarter and year ended December 31, 2017. The press release is furnished herewith as Exhibit 99 hereto and is incorporated herein by reference.
Item 9.01 Financial Statements and Exhibits.
(d) Exhibits.
99 Press Release of Acadia Healthcare Company, Inc., dated February 21, 2018.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
ACADIA HEALTHCARE COMPANY, INC. |
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Date: | February 21, 2018 | By: |
/s/ Christopher L. Howard |
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Christopher L. Howard |
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Executive Vice President and |
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General Counsel |
EXHIBIT INDEX
Exhibit |
Description |
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Press Release of Acadia Healthcare Company, Inc., dated February 21, 2018 |
Exhibit 99
Acadia Healthcare Reports Fourth Quarter Revenue of $724.5 Million, EPS of $0.80 and Adjusted EPS of $0.61
U.S. Same Facility Revenue Grows 6.6%
Provides 2018 Financial Guidance
FRANKLIN, Tenn.--(BUSINESS WIRE)--February 21, 2018--Acadia Healthcare Company, Inc. (NASDAQ: ACHC) today announced financial results for the fourth quarter and year ended December 31, 2017. Revenue increased 3.1% for the quarter to $724.5 million from $702.9 million for the fourth quarter of 2016. Net income attributable to Acadia stockholders was $69.6 million, or $0.80 per diluted share, for the fourth quarter of 2017 compared with $41.8 million, or $0.48 per diluted share, for the fourth quarter of 2016. Results for the fourth quarter of 2017 include a non-cash decrease in the provision for income taxes of $20.2 million from the impact of the Tax Cuts and Jobs Act of 2017 on net deferred tax liabilities. This estimate will continue to be evaluated as further information becomes available. Adjusted income from continuing operations attributable to Acadia stockholders per diluted share (“adjusted EPS”) was $0.61 for the fourth quarter of 2017 compared with $0.59 for the fourth quarter of 2016, excluding the impact of a tax benefit of $20.2 million due to the Tax Cuts and Jobs Act of 2017; transaction-related expenses of $5.4 million and $14.8 million for the fourth quarter of 2017 and 2016, respectfully; and debt extinguishment costs of $0.8 million and loss on divestiture of $4.1 million for the fourth quarter of 2016. A reconciliation of all non-GAAP financial results in this release appears beginning on page 8.
Joey Jacobs, Chairman and Chief Executive Officer of Acadia, commented, “We are pleased with our results for the fourth quarter of 2017. We note that the results for the fourth quarter of 2016 include revenue of approximately $30 million and adjusted EPS of approximately $0.05 from 22 facilities in the U.K. that were divested on November 30, 2016.”
Same facility revenue for Acadia’s U.S. operations increased 6.6% for the fourth quarter of 2017 from the fourth quarter of 2016, with a 3.1% increase in patient days and a 3.3% increase in revenue per patient day. U.S. same facility EBITDA margin was 26.3% for the latest quarter, unchanged from the fourth quarter of 2016.
Same facility revenue for Acadia’s U.K. operations increased 3.7% for the fourth quarter of 2017 compared with the fourth quarter of 2016, with a 1.5% increase in patient days and a 2.2% increase in revenue per patient day. U.K. same facility EBITDA margin was 21.1% for the fourth quarter compared with 22.3% for the fourth quarter of 2016. Mr. Jacobs added, “The fourth quarter results for our operations in the U.K. met our revised expectations. Our results still reflect a lower census than normal and continued pressure from higher agency labor expense, primarily for nurses and other clinical staff, due to tightening in the U.K. labor market.”
Total same facility revenue for the fourth quarter of 2017 increased 5.6%, with a 2.4% increase in patient days and a 3.1% increase in revenue per patient day. Total same facility EBITDA margin was 24.5% for the fourth quarter of 2017 compared with 24.9% for the fourth quarter of 2016. The growth in same facility revenue reflected the addition of 750 beds to existing and new facilities in 2017, of which 398 beds opened in the fourth quarter. The Company expects to add more than 800 beds to existing and new facilities in 2018.
Acadia’s consolidated adjusted EBITDA for the fourth quarter of 2017 was $153.5 million, or 21.2% of revenue, compared with $149.5 million, or 21.3% of revenue, for the fourth quarter of 2016.
Acadia today established its financial guidance for 2018 and the first quarter of 2018, as follows:
The Company’s guidance does not include the impact of any future acquisitions or transaction-related expenses.
EBITDA is defined as net income adjusted for net income (loss) attributable to noncontrolling interests, (benefit from) provision for 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, loss on divestiture and gain on foreign currency derivatives. Adjusted income is defined as net income adjusted for transaction-related expenses, tax reform impact, debt extinguishment costs, loss on divestiture, gain on foreign currency derivatives 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 Thursday, February 22, 2018. 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 8, 2018.
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 following the referendum in the U.K. on June 23, 2016, in which voters approved an exit from the European Union, or Brexit; (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) following the Brexit vote; (iii) Acadia’s ability to complete acquisitions and successfully integrate the operations of acquired facilities; (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 and governmental investigations, which could adversely affect the price of our common stock and result in substantial fines 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 strategy. These factors and others are more fully described in Acadia’s periodic reports and other filings with the SEC.
About Acadia
Acadia is a provider of behavioral healthcare services. At December 31, 2017, Acadia operated a network of 582 behavioral healthcare facilities with approximately 17,800 beds in 39 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, | |||||||||||||||
2017 | 2016 | 2017 | 2016 | |||||||||||||
(In thousands, except per share amounts) | ||||||||||||||||
Revenue before provision for doubtful accounts | $ | 733,538 | $ | 713,784 | $ | 2,877,234 | $ | 2,852,823 | ||||||||
Provision for doubtful accounts | (9,026 | ) | (10,896 | ) | (40,918 | ) | (41,909 | ) | ||||||||
Revenue | 724,512 | 702,888 | 2,836,316 | 2,810,914 | ||||||||||||
Salaries, wages and benefits (including equity-based compensation expense of $4,460, $7,356, $23,467 and $28,345, respectively) |
390,582 | 384,297 | 1,536,160 | 1,541,854 | ||||||||||||
Professional fees | 53,451 | 47,516 | 196,223 | 185,486 | ||||||||||||
Supplies | 29,439 | 28,976 | 114,439 | 117,425 | ||||||||||||
Rents and leases | 19,320 | 18,335 | 76,775 | 73,348 | ||||||||||||
Other operating expenses | 82,666 | 81,606 | 331,827 | 312,556 | ||||||||||||
Depreciation and amortization | 37,754 | 33,958 | 143,010 | 135,103 | ||||||||||||
Interest expense, net | 45,230 | 46,010 | 176,007 | 181,325 | ||||||||||||
Debt extinguishment costs | - | 842 | 810 | 4,253 | ||||||||||||
Loss on divestiture | - | 4,070 | - | 178,809 | ||||||||||||
Gain on foreign currency derivatives | - | - | - | (523 | ) | |||||||||||
Transaction-related expenses | 5,431 | 14,840 | 24,267 | 48,323 | ||||||||||||
Total expenses | 663,873 | 660,450 | 2,599,518 | 2,777,959 | ||||||||||||
Income before income taxes | 60,639 | 42,438 | 236,798 | 32,955 | ||||||||||||
(Benefit from) provision for income taxes | (9,050 | ) | 1,012 | 37,209 | 28,779 | |||||||||||
Net income | 69,689 | 41,426 | 199,589 | 4,176 | ||||||||||||
Net (income) loss attributable to noncontrolling interests | (60 | ) | 392 | 246 | 1,967 | |||||||||||
Net income attributable to Acadia Healthcare Company, Inc. | $ | 69,629 | $ | 41,818 | $ | 199,835 | $ | 6,143 | ||||||||
Earnings per share attributable to Acadia Healthcare Company, Inc. stockholders: |
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Basic | $ | 0.80 | $ | 0.48 | $ | 2.30 | $ | 0.07 | ||||||||
Diluted | $ | 0.80 | $ | 0.48 | $ | 2.30 | $ | 0.07 | ||||||||
Weighted-average shares outstanding: | ||||||||||||||||
Basic | 87,052 | 86,668 | 86,948 | 85,701 | ||||||||||||
Diluted | 87,166 | 86,890 | 87,060 | 85,972 | ||||||||||||
Acadia Healthcare Company, Inc. | ||||||||
Condensed Consolidated Balance Sheets | ||||||||
(Unaudited) | ||||||||
December 31, | ||||||||
2017 | 2016 | |||||||
(In thousands) | ||||||||
ASSETS | ||||||||
Current assets: | ||||||||
Cash and cash equivalents | $ | 67,290 | $ | 57,063 | ||||
Accounts receivable, net of allowance for doubtful accounts of $39,803 and $38,916, respectively |
296,925 | 263,327 | ||||||
Other current assets | 107,335 | 107,537 | ||||||
Total current assets | 471,550 | 427,927 | ||||||
Property and equipment, net | 3,048,130 | 2,703,695 | ||||||
Goodwill | 2,751,174 | 2,681,188 | ||||||
Intangible assets, net | 87,348 | 83,310 | ||||||
Deferred tax assets - noncurrent | 3,731 | 3,780 | ||||||
Derivative instruments | 12,997 | 73,509 | ||||||
Other assets | 49,572 | 51,317 | ||||||
Total assets | $ | 6,424,502 | $ | 6,024,726 | ||||
LIABILITIES AND EQUITY | ||||||||
Current liabilities: | ||||||||
Current portion of long-term debt | $ | 34,830 | $ | 34,805 | ||||
Accounts payable | 102,299 | 80,034 | ||||||
Accrued salaries and benefits | 99,047 | 105,068 | ||||||
Other accrued liabilities | 141,213 | 122,958 | ||||||
Total current liabilities | 377,389 | 342,865 | ||||||
Long-term debt | 3,205,058 | 3,253,004 | ||||||
Deferred tax liabilities - noncurrent | 80,333 | 78,520 | ||||||
Other liabilities | 166,434 | 164,859 | ||||||
Total liabilities | 3,829,214 | 3,839,248 | ||||||
Redeemable noncontrolling interests | 22,417 | 17,754 | ||||||
Equity: | ||||||||
Common stock | 871 | 867 | ||||||
Additional paid-in capital | 2,517,545 | 2,496,288 | ||||||
Accumulated other comprehensive loss | (374,118 | ) | (549,570 | ) | ||||
Retained earnings | 428,573 | 220,139 | ||||||
Total equity | 2,572,871 | 2,167,724 | ||||||
Total liabilities and equity | $ | 6,424,502 | $ | 6,024,726 | ||||
Acadia Healthcare Company, Inc. | ||||||||
Condensed Consolidated Statements of Cash Flows | ||||||||
(Unaudited) | ||||||||
Year Ended December 31, | ||||||||
2017 | 2016 | |||||||
(In thousands) | ||||||||
Operating activities: | ||||||||
Net income | $ | 199,589 | $ | 4,176 | ||||
Adjustments to reconcile net income to net cash provided by continuing operating activities: | ||||||||
Depreciation and amortization | 143,010 | 135,103 | ||||||
Amortization of debt issuance costs | 9,855 | 10,324 | ||||||
Equity-based compensation expense | 23,467 | 28,345 | ||||||
Deferred income tax expense | 31,372 | 28,647 | ||||||
Debt extinguishment costs | 810 | 4,253 | ||||||
Loss on divestiture | - | 178,809 | ||||||
Gain on foreign currency derivatives | - | (523 | ) | |||||
Other | 11,412 | 4,715 | ||||||
Change in operating assets and liabilities, net of effect of acquisitions: | ||||||||
Accounts receivable, net | (28,570 | ) | (15,718 | ) | ||||
Other current assets | 20,808 | (20,648 | ) | |||||
Other assets | (3,176 | ) | (4,354 | ) | ||||
Accounts payable and other accrued liabilities | (10,113 | ) | 22,693 | |||||
Accrued salaries and benefits | (8,988 | ) | (8,572 | ) | ||||
Other liabilities | 11,794 | 4,484 | ||||||
Net cash provided by continuing operating activities | 401,270 | 371,734 | ||||||
Net cash used in discontinued operating activities | (1,693 | ) | (10,256 | ) | ||||
Net cash provided by operating activities | 399,577 | 361,478 | ||||||
Investing activities: | ||||||||
Cash paid for acquisitions, net of cash acquired | (18,191 | ) | (683,455 | ) | ||||
Cash paid for capital expenditures | (274,177 | ) | (307,472 | ) | ||||
Cash paid for real estate acquisitions | (41,057 | ) | (40,757 | ) | ||||
Settlement of foreign currency derivatives | - | 523 | ||||||
Cash received on divestitures | - | 373,266 | ||||||
Other | (3,101 | ) | (2,470 | ) | ||||
Net cash used in investing activities | (336,526 | ) | (660,365 | ) | ||||
Financing activities: | ||||||||
Borrowings on long-term debt | - | 1,480,000 | ||||||
Borrowings on revolving credit facility | - | 179,000 | ||||||
Principal payments on revolving credit facility | - | (337,000 | ) | |||||
Principal payments on long-term debt | (34,805 | ) | (49,941 | ) | ||||
Repayment of assumed debt | - | (1,348,389 | ) | |||||
Repayment of long-term debt | (22,500 | ) | (200,594 | ) | ||||
Payment of debt issuance costs | - | (36,649 | ) | |||||
Issuance of common stock, net | - | 685,097 | ||||||
Common stock withheld for minimum statutory taxes, net | (3,455 | ) | (8,846 | ) | ||||
Other | 686 | (3,837 | ) | |||||
Net cash (used in) provided by financing activities | (60,074 | ) | 358,841 | |||||
Effect of exchange rate changes on cash | 7,250 | (14,106 | ) | |||||
Net increase in cash and cash equivalents | 10,227 | 45,848 | ||||||
Cash and cash equivalents at beginning of the period | 57,063 | 11,215 | ||||||
Cash and cash equivalents at end of the period | $ | 67,290 | $ | 57,063 | ||||
Effect of acquisitions: | ||||||||
Assets acquired, excluding cash | $ | 19,649 | $ | 2,516,880 | ||||
Liabilities assumed | (1,458 | ) | (1,616,543 | ) | ||||
Issuance of common stock in connection with acquisition | - | (216,882 | ) | |||||
Cash paid for acquisitions, net of cash acquired | $ | 18,191 | $ | 683,455 | ||||
Acadia Healthcare Company, Inc. | |||||||||||||||||
Operating Statistics | |||||||||||||||||
(Unaudited, Revenue in thousands) | |||||||||||||||||
Three Months Ended December 31, | Year Ended December 31, | ||||||||||||||||
2017 | 2016 | % Change | 2017 | 2016 | % Change | ||||||||||||
Same Facility Results (a,d) | |||||||||||||||||
Revenue | $ | 693,619 | $ | 657,087 | 5.6% | $ | 2,602,315 | $ | 2,464,289 | 5.6% | |||||||
Patient Days | 1,103,891 | 1,078,217 | 2.4% | 4,173,465 | 4,027,440 | 3.6% | |||||||||||
Admissions | 39,120 | 37,031 | 5.6% | 156,437 | 147,172 | 6.3% | |||||||||||
Average Length of Stay (b) | 28.2 | 29.1 | -3.1% | 26.7 | 27.4 | -2.5% | |||||||||||
Revenue per Patient Day | $ | 628 | $ | 609 | 3.1% | $ | 624 | $ | 612 | 1.9% | |||||||
EBITDA margin | 24.5% | 24.9% | -40 bps | 25.3% | 25.6% | -30 bps | |||||||||||
U.S. Same Facility Results (a) | |||||||||||||||||
Revenue | $ | 451,958 | $ | 424,092 | 6.6% | $ | 1,774,461 | $ | 1,665,344 | 6.6% | |||||||
Patient Days | 607,850 | 589,457 | 3.1% | 2,429,171 | 2,318,598 | 4.8% | |||||||||||
Admissions | 36,868 | 35,029 | 5.2% | 148,611 | 139,886 | 6.2% | |||||||||||
Average Length of Stay (b) | 16.5 | 16.8 | -2.0% | 16.3 | 16.6 | -1.4% | |||||||||||
Revenue per Patient Day | $ | 744 | $ | 719 | 3.3% | $ | 730 | $ | 718 | 1.7% | |||||||
EBITDA margin | 26.3% | 26.3% | 0 bps | 27.0% | 27.1% | -10 bps | |||||||||||
U.K. Same Facility Results (a,d) | |||||||||||||||||
Revenue | $ | 241,661 | $ | 232,995 | 3.7% | $ | 827,854 | $ | 798,945 | 3.6% | |||||||
Patient Days | 496,041 | 488,760 | 1.5% | 1,744,294 | 1,708,842 | 2.1% | |||||||||||
Admissions | 2,252 | 2,002 | 12.5% | 7,826 | 7,286 | 7.4% | |||||||||||
Average Length of Stay (b) | 220.3 | 244.1 | -9.8% | 222.9 | 234.5 | -5.0% | |||||||||||
Revenue per Patient Day | $ | 487 | $ | 477 | 2.2% | $ | 475 | $ | 468 | 1.5% | |||||||
EBITDA margin | 21.1% | 22.3% | -120 bps | 21.7% | 22.5% | -80 bps | |||||||||||
U.S. Facility Results (c) | |||||||||||||||||
Revenue | $ | 454,529 | $ | 426,811 | 6.5% | $ | 1,809,844 | $ | 1,683,776 | 7.5% | |||||||
Patient Days | 608,353 | 589,656 | 3.2% | 2,461,512 | 2,321,908 | 6.0% | |||||||||||
Admissions | 36,952 | 35,070 | 5.4% | 151,467 | 140,691 | 7.7% | |||||||||||
Average Length of Stay (b) | 16.5 | 16.8 | -2.1% | 16.3 | 16.5 | -1.5% | |||||||||||
Revenue per Patient Day | $ | 747 | $ | 724 | 3.2% | $ | 735 | $ | 725 | 1.4% | |||||||
EBITDA margin | 25.5% | 25.7% | -20 bps | 26.3% | 26.4% | -10 bps | |||||||||||
U.K. Facility Results (c,d) | |||||||||||||||||
Revenue | $ | 269,983 | $ | 261,393 | 3.3% | $ | 1,026,472 | $ | 917,841 | 11.8% | |||||||
Patient Days | 686,708 | 691,560 | -0.7% | 2,735,132 | 2,476,178 | 10.5% | |||||||||||
Admissions | 2,554 | 2,306 | 10.8% | 10,222 | 8,765 | 16.6% | |||||||||||
Average Length of Stay (b) | 268.9 | 299.9 | -10.3% | 267.6 | 282.5 | -5.3% | |||||||||||
Revenue per Patient Day | $ | 393 | $ | 378 | 4.0% | $ | 375 | $ | 371 | 1.2% | |||||||
EBITDA margin | 19.1% | 20.6% | -150 bps | 19.3% | 20.8% | -150 bps | |||||||||||
Total Facility Results (c,d) | |||||||||||||||||
Revenue | $ | 724,512 | $ | 688,204 | 5.3% | $ | 2,836,316 | $ | 2,601,617 | 9.0% | |||||||
Patient Days | 1,295,061 | 1,281,216 | 1.1% | 5,196,644 | 4,798,086 | 8.3% | |||||||||||
Admissions | 39,506 | 37,376 | 5.7% | 161,689 | 149,456 | 8.2% | |||||||||||
Average Length of Stay (b) | 32.8 | 34.3 | -4.4% | 32.1 | 32.1 | 0.1% | |||||||||||
Revenue per Patient Day | $ | 559 | $ | 537 | 4.2% | $ | 546 | $ | 542 | 0.7% | |||||||
EBITDA margin | 23.1% | 23.8% | -70 bps | 23.8% | 24.4% | -60 bps | |||||||||||
(a) Same-facility results for the periods presented exclude the 22 facilities in the U.K. sold on November 30, 2016, the elderly care division of our U.K. operations and other closed services. | |||||||||||||||||
(b) Average length of stay is defined as patient days divided by admissions. | |||||||||||||||||
(c) Total Facility results for the periods presented exclude the 22 facilities in the U.K. sold on November 30, 2016 and other closed services. | |||||||||||||||||
(d) Revenue and revenue per patient day for the three months and year ended December 31, 2016 is adjusted to reflect the foreign currency exchange rate for the comparable periods of 2017 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, 2016 is 1.33 and 1.29, 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, | |||||||||||||||
2017 | 2016 | 2017 | 2016 | |||||||||||||
(in thousands) | ||||||||||||||||
Net income attributable to Acadia Healthcare Company, Inc. | $ | 69,629 | $ | 41,818 | $ | 199,835 | $ | 6,143 | ||||||||
Net income (loss) attributable to noncontrolling interests | 60 | (392 | ) | (246 | ) | (1,967 | ) | |||||||||
(Benefit from) provision for income taxes | (9,050 | ) | 1,012 | 37,209 | 28,779 | |||||||||||
Interest expense, net | 45,230 | 46,010 | 176,007 | 181,325 | ||||||||||||
Depreciation and amortization | 37,754 | 33,958 | 143,010 | 135,103 | ||||||||||||
EBITDA | 143,623 | 122,406 | 555,815 | 349,383 | ||||||||||||
Adjustments: | ||||||||||||||||
Equity-based compensation expense (a) | 4,460 | 7,356 | 23,467 | 28,345 | ||||||||||||
Transaction-related expenses (b) | 5,431 | 14,840 | 24,267 | 48,323 | ||||||||||||
Debt extinguishment costs (c) | - | 842 | 810 | 4,253 | ||||||||||||
Loss on divestiture (d) | - | 4,070 | - | 178,809 | ||||||||||||
Gain on foreign currency derivatives (e) | - | - | - | (523 | ) | |||||||||||
Adjusted EBITDA | $ | 153,514 | $ | 149,514 | $ | 604,359 | $ | 608,590 | ||||||||
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, | |||||||||||||||
2017 | 2016 | 2017 | 2016 | |||||||||||||
(in thousands, except per share amounts) | ||||||||||||||||
Net income attributable to Acadia Healthcare Company, Inc. | $ | 69,629 | $ | 41,818 | $ | 199,835 | $ | 6,143 | ||||||||
Adjustments to income: | ||||||||||||||||
Transaction-related expenses (b) | 5,431 | 14,840 | 24,267 | 48,323 | ||||||||||||
Tax reform impact (f) | (20,188 | ) | - | (20,188 | ) | - | ||||||||||
Debt extinguishment costs (c) | - | 842 | 810 | 4,253 | ||||||||||||
Loss on divestiture (d) | - | 4,070 | - | 178,809 | ||||||||||||
Gain on foreign currency derivatives (e) | - | - | - | (523 | ) | |||||||||||
Income tax effect of adjustments to income (g) | (1,978 | ) | (10,229 | ) | (4,492 | ) | (26,760 | ) | ||||||||
Adjusted income attributable to Acadia Healthcare Company, Inc. | $ | 52,894 | $ | 51,341 | $ | 200,232 | $ | 210,245 | ||||||||
Weighted-average shares outstanding - diluted | 87,166 | 86,890 | 87,060 | 85,972 | ||||||||||||
Adjusted income attributable to Acadia Healthcare Company, Inc. per diluted share |
$ | 0.61 | $ | 0.59 | $ | 2.30 | $ | 2.45 | ||||||||
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, (benefit from) 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, loss on divestiture and gain on foreign currency derivatives. We define Adjusted income as net income adjusted for transaction-related expenses, tax reform impact, debt extinguishment costs, loss on divestiture, gain on foreign currency derivatives 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 related to acquisitions and integration efforts. | ||
(c) Represents debt extinguishment costs recorded in connection with the Amended and Restated Credit Agreement, including the discount and write-off of deferred financing costs. | ||
(d) As part of divestitures in the U.K. and U.S., the loss on divestiture includes an allocation of goodwill to the disposal groups of approximately $106.9 million, loss on the sale of properties of approximately $45.0 million, transaction-related expenses of approximately $26.8 million and write-off of intangible assets of approximately $0.1 million. | ||
(e) Represents the change in fair value of foreign currency derivatives purchased by Acadia related to (i) acquisitions in the U.K. and (ii) certain transfers of cash between the U.S. and U.K. under the Company’s cash management and foreign currency risk management programs. | ||
(f) Represents the Company’s estimate of the one-time remeasurement of deferred taxes pursuant to the enactment of the Tax Cuts and Jobs Act. The estimate of the tax reform impact may be revised as further information is evaluated. | ||
(g) Represents the income tax effect of adjustments to income based on tax rates of 19.87% and 17.96% for the three months ended December 31, 2017 and 2016, respectively, and 23.65% and 20.90% for the year ended December 31, 2017 and 2016, respectively. The adjusted income tax provision for the year ended December 31, 2017 excludes the impact of adopting ASU 2016-09 "Improvements to Employee Share-Based Payment Accounting” of approximately $1.7 million. |
CONTACT:
Acadia Healthcare Company, Inc.
Gretchen Hommrich,
615-861-6000
Director, Investor Relations