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 11, 2015
Acadia Healthcare Company, Inc.
(Exact Name of Registrant as Specified in Its Charter)
| Delaware | 001-35331 | 46-2492228 | ||
| (State or Other Jurisdiction of Incorporation) |
(Commission File Number) |
(IRS Employer Identification No.) |
830 Crescent Centre Drive, Suite 610, Franklin, Tennessee 37067
(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 (See General Instruction A.2. below):
| ¨ | 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)) |
| Item 2.02. | Results of Operations. |
On February 11, 2015, Acadia Healthcare Company, Inc. (“Acadia” or the “Company”) issued a press release announcing, among other things, the Company’s operating and financial results for the fourth quarter and year ended December 31, 2014. The press release is furnished herewith as Exhibit 99 hereto and is incorporated herein by reference.
Item 7.01 Regulation FD Disclosure.
On February 11, 2015, Acadia also announced the completion of its acquisition of CRC Health Group, Inc. (“CRC”). The press release is furnished herewith as Exhibit 99 hereto and is incorporated herein by reference.
The Company will hold a conference call to discuss its fourth quarter and year-end financial results and the acquisition of CRC at 9:00 a.m. Eastern Time on Thursday, February 12, 2015. A live webcast of the conference call will be available at www.acadiahealthcare.com in the “Investor Relations” section of the website. The webcast of the conference call will be available through February 27, 2015.
The press release shall not be deemed to be “filed” for the purposes of Section 18 of the Securities Exchange Act of 1934 or otherwise subject to the liabilities of that Section, unless the Company specifically incorporates it by reference in a document filed under the Securities Act of 1933 or the Securities Exchange Act of 1934.
| Item 9.01. | Financial Statements and Exhibits. |
| (d) | Exhibits |
| Exhibit |
Description | |
| 99 | Press release, dated February 11, 2015 | |
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. | ||||||
| Date: February 11, 2015 | By: | /s/ Christopher L. Howard | ||||
| Christopher L. Howard | ||||||
| Executive Vice President, General Counsel and Secretary | ||||||
EXHIBIT INDEX
| Exhibit |
Description | |
| 99 | Press release, dated February 11, 2015 | |
Exhibit 99
Contact:
Brent Turner
President
(615) 861-6000
Acadia Healthcare Reports Growth of 58.6% in Fourth Quarter Adjusted EPS to $0.46 and 55.2% in Revenue to $294.9 Million, Including 12.2% Growth in Same Facility Revenue
Completes Acquisition of CRC Health Group
Establishes Guidance for 2015 Adjusted Earnings per Diluted Share in Range of $2.03 to $2.10
FRANKLIN, Tenn. – February 11, 2015 – Acadia Healthcare Company, Inc. (NASDAQ: ACHC) today announced financial results for the fourth quarter and year ended December 31, 2014. For the quarter, revenue increased 55.2% to $294.9 million from $190.0 million for the fourth quarter of 2013. Income from continuing operations rose to $22.3 million, or $0.37 per diluted share, for the fourth quarter of 2014 from $12.4 million, or $0.25 per diluted share, for the fourth quarter of 2013. Adjusted income from continuing operations grew 87.6% to $27.2 million for the fourth quarter of 2014 from $14.5 million for the fourth quarter of 2013, while adjusted income from continuing operations per diluted share increased 58.6% to $0.46 from $0.29. The adjusted results exclude transaction-related expenses of $2.8 million and $3.3 million for the fourth quarter of 2014 and 2013, respectively. Weighted average shares outstanding increased 18.1% for the fourth quarter of 2014 from the fourth quarter of 2013, primarily due to the Company’s public equity offering in June 2014. A reconciliation of all GAAP and non-GAAP financial results in this release is on pages 8 and 9.
Revenue for 2014 increased 40.8% to $1.0 billion from $713.4 million for 2013. Income from continuing operations was $83.2 million, or $1.50 per diluted share, for 2014 compared with $43.3 million, or $0.86 per diluted share, for 2013. Adjusted income from continuing operations increased 58.7% to $85.0 million for 2014 from $53.6 million for 2013, while adjusted income from continuing operations per diluted share increased 43.9% to $1.54 from $1.07. The adjusted results exclude a gain on foreign currency derivatives of $15.3 million for 2014, debt extinguishment costs of $9.4 million for 2013 and transaction-related expenses of $13.7 million and $7.2 million for 2014 and 2013, respectively. Weighted average shares outstanding increased 10.1% for 2014 from 2013.
“Acadia’s strong operating results for the fourth quarter completed a year of substantial profitable growth for the Company,” said Joey Jacobs, Chairman and Chief Executive Officer of Acadia. “In addition to the growth momentum our operations demonstrated in 2014 - through which we achieved milestone annual revenues of more than $1 billion - we have made a great start to 2015 with the completion of the CRC acquisition. CRC, which produced revenues for 2014 of approximately $450 million and adjusted EBITDA of approximately $115 million, brings 35 inpatient facilities to Acadia with approximately 2,400 beds and 81 comprehensive treatment centers. We expect CRC to be meaningfully accretive to our financial results, while diversifying our services and payor mix.”
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ACHC Reports Fourth Quarter Results
Page 2
February 11, 2015
To fund the CRC acquisition, Acadia issued approximately 5,975,000 shares of its common stock to former CRC stockholders; issued $375 million of new 5.625% senior unsecured notes due 2023; borrowed $500 million under a new $500 million incremental term loan facility and $25 million under Acadia’s existing revolving credit facility, in each case under its Amended and Restated Senior Credit Facility; and used approximately $70 million of cash on hand.
Jacobs continued, “Our revenue growth for 2014 was primarily driven by the addition of approximately 1,800 beds to our operations through acquisition and organic growth. We completed five acquisitions during 2014, which brought 27 facilities and over 1,400 beds to Acadia. We also added 378 beds at existing facilities during the year. As a result, we completed the year with approximately 5,800 beds in 78 facilities in 24 states, the United Kingdom and Puerto Rico.
“The Company’s same facility performance for the fourth quarter and full year reflected the addition of beds to existing facilities, as well as our initiatives to build revenue and increase efficiency and productivity at our facilities. Same facility revenues expanded 12.2% for the fourth quarter, as we produced an 11.5% increase in patient days and a 0.7% increase in revenue per patient day. This significant growth generated further operating leverage, which was primarily accountable for the 160 basis point increase in our same facility EBITDA margin to 26.2% for the quarter. Same facility revenue grew 10.9% for full year 2014 and EBITDA margin increased 180 basis points to 26.1%. Acadia’s consolidated adjusted EBITDA for the fourth quarter increased 69.5% to $66.4 million, which was 22.5% of revenue, from $39.2 million, or 20.6% of revenue, for 2013.
“For 2015, we will continue to evaluate potential acquisitions in our highly fragmented behavioral healthcare markets and add new beds in existing facilities in both the U.S. and the U.K. Subsequent to the closing of the CRC transaction, we remain well positioned to finance our growth strategies, with availability under our revolving credit facility of approximately $266 million.”
Acadia today established guidance for 2015 adjusted earnings per diluted share in a range of $2.03 to $2.10, an increase of approximately 32% to 36% over 2014. Additionally for the first quarter of 2015, the Company expects adjusted earnings per diluted share in a range of $0.40 to $0.41, an increase of approximately 43% to 46% over the first quarter of 2014. The Company’s guidance includes the impact of start-up costs at several de novo facilities coming on line in 2015. It also assumes an exchange rate of $1.52 per British Pound, which is approximately 7% lower than 2014, non-cash stock compensation expense of approximately $19 million and a tax rate of 32%. The Company’s guidance does not include the impact of any future acquisitions or transaction-related expenses.
Acadia will hold a conference call to discuss its fourth quarter and year-end financial results and the completed CRC transaction at 9:00 a.m. Eastern Time on Thursday, February 12, 2015. A live webcast of the conference call will be available at www.acadiahealthcare.com in the “Investor Relations” section of the website. The webcast of the conference call will be available through February 27, 2015.
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ACHC Reports Fourth Quarter Results
Page 3
February 11, 2015
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) Acadia’s ability to complete acquisitions and successfully integrate the operations of acquired facilities, including the PiC and CRC facilities; (ii) Acadia’s ability to add beds, expand services, enhance marketing programs and improve efficiencies at its facilities; (iii) potential reductions in payments received by Acadia from the government and third-party payors; (iv) the occurrence of patient incidents, which could adversely affect the price of our common stock and result in incremental regulatory burdens and governmental investigations; (v) 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 (vi) potential operating difficulties, 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 inpatient behavioral healthcare services. Acadia operates a network of 194 behavioral healthcare facilities with approximately 8,300 beds in 37 states, the United Kingdom and Puerto Rico. Acadia provides psychiatric and chemical dependency services to its patients in a variety of settings, including inpatient psychiatric hospitals, residential treatment centers, outpatient clinics and therapeutic school-based programs.
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ACHC Reports Fourth Quarter and Full Year Results
Page 4
February 11, 2015
Acadia Healthcare Company, Inc.
Condensed Consolidated Statements of Income
(Unaudited)
| Three Months Ended December 31, | Year Ended December 31, | |||||||||||||||
| 2014 | 2013 | 2014 | 2013 | |||||||||||||
| (In thousands, except per share amounts) | ||||||||||||||||
| Revenue before provision for doubtful accounts |
$ | 301,000 | $ | 195,879 | $ | 1,030,784 | $ | 735,109 | ||||||||
| Provision for doubtful accounts |
(6,099 | ) | (5,880 | ) | (26,183 | ) | (21,701 | ) | ||||||||
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| Revenue |
294,901 | 189,999 | 1,004,601 | 713,408 | ||||||||||||
| Salaries, wages and benefits (including equity-based compensation expense of $3,083, $1,505, $10,058 and $5,249, respectively) |
166,732 | 109,058 | 575,412 | 407,962 | ||||||||||||
| Professional fees |
16,331 | 9,877 | 52,482 | 37,171 | ||||||||||||
| Supplies |
13,700 | 9,552 | 48,422 | 37,569 | ||||||||||||
| Rents and leases |
3,329 | 2,672 | 12,201 | 10,049 | ||||||||||||
| Other operating expenses |
31,466 | 21,148 | 110,654 | 80,572 | ||||||||||||
| Depreciation and amortization |
10,971 | 4,842 | 32,667 | 17,090 | ||||||||||||
| Interest expense, net |
14,716 | 9,578 | 48,221 | 37,250 | ||||||||||||
| Debt extinguishment costs |
— | — | — | 9,350 | ||||||||||||
| Gain on foreign currency derivatives |
— | — | (15,262 | ) | — | |||||||||||
| Transaction-related expenses |
2,816 | 3,337 | 13,650 | 7,150 | ||||||||||||
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|||||||||
| Total expenses |
260,061 | 170,064 | 878,447 | 644,163 | ||||||||||||
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| Income from continuing operations before income taxes |
34,840 | 19,935 | 126,154 | 69,245 | ||||||||||||
| Provision for income taxes |
12,539 | 7,536 | 42,922 | 25,975 | ||||||||||||
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| Income from continuing operations |
22,301 | 12,399 | 83,232 | 43,270 | ||||||||||||
| Loss from discontinued operations, net of income taxes |
(172 | ) | (119 | ) | (192 | ) | (691 | ) | ||||||||
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| Net income |
$ | 22,129 | $ | 12,280 | $ | 83,040 | $ | 42,579 | ||||||||
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| Basic earnings per share: |
||||||||||||||||
| Income from continuing operations |
$ | 0.38 | $ | 0.25 | $ | 1.51 | $ | 0.87 | ||||||||
| Loss from discontinued operations |
— | — | — | (0.02 | ) | |||||||||||
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| Net income |
$ | 0.38 | $ | 0.25 | $ | 1.51 | $ | 0.85 | ||||||||
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| Diluted earnings per share: |
||||||||||||||||
| Income from continuing operations |
$ | 0.37 | $ | 0.25 | $ | 1.50 | $ | 0.86 | ||||||||
| Loss from discontinued operations |
— | (0.01 | ) | — | (0.01 | ) | ||||||||||
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| Net income |
$ | 0.37 | $ | 0.24 | $ | 1.50 | $ | 0.85 | ||||||||
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| Weighted-average shares outstanding: |
||||||||||||||||
| Basic |
59,197 | 50,053 | 55,063 | 50,004 | ||||||||||||
| Diluted |
59,529 | 50,411 | 55,327 | 50,261 | ||||||||||||
- MORE -
ACHC Reports Fourth Quarter and Full Year Results
Page 5
February 11, 2015
Acadia Healthcare Company, Inc.
Condensed Consolidated Balance Sheets
(Unaudited)
| December 31, | ||||||||
| 2014 | 2013 | |||||||
| (In thousands) | ||||||||
| ASSETS |
||||||||
| Current assets: |
||||||||
| Cash and cash equivalents |
$ | 94,040 | $ | 4,569 | ||||
| Accounts receivable, net of allowance for doubtful accounts of $22,449 and $18,345, respectively |
118,378 | 95,885 | ||||||
| Deferred tax assets |
20,155 | 15,703 | ||||||
| Other current assets |
41,570 | 28,969 | ||||||
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| Total current assets |
274,143 | 145,126 | ||||||
| Property and equipment, net |
1,069,700 | 370,109 | ||||||
| Goodwill |
802,986 | 661,549 | ||||||
| Intangible assets, net |
21,636 | 20,568 | ||||||
| Deferred tax assets - noncurrent |
13,141 | — | ||||||
| Other assets |
41,984 | 27,307 | ||||||
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| Total assets |
$ | 2,223,590 | $ | 1,224,659 | ||||
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| LIABILITIES AND EQUITY |
||||||||
| Current liabilities: |
||||||||
| Current portion of long-term debt |
$ | 26,965 | $ | 15,195 | ||||
| Accounts payable |
48,696 | 36,026 | ||||||
| Accrued salaries and benefits |
59,317 | 37,721 | ||||||
| Other accrued liabilities |
30,956 | 25,748 | ||||||
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| Total current liabilities |
165,934 | 114,690 | ||||||
| Long-term debt |
1,069,305 | 601,941 | ||||||
| Deferred tax liabilities - noncurrent |
63,880 | 7,971 | ||||||
| Other liabilities |
43,506 | 19,347 | ||||||
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| Total liabilities |
1,342,625 | 743,949 | ||||||
| Equity: |
||||||||
| Common stock |
592 | 501 | ||||||
| Additional paid-in capital |
847,301 | 461,807 | ||||||
| Accumulated other comprehensive loss |
(68,370 | ) | — | |||||
| Retained earnings |
101,442 | 18,402 | ||||||
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| Total equity |
880,965 | 480,710 | ||||||
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| Total liabilities and equity |
$ | 2,223,590 | $ | 1,224,659 | ||||
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- MORE -
ACHC Reports Fourth Quarter and Full Year Results
Page 6
February 11, 2015
Acadia Healthcare Company, Inc.
Condensed Consolidated Statements of Cash Flows
(Unaudited)
| Year Ended December 31, | ||||||||
| 2014 | 2013 | |||||||
| (In thousands) | ||||||||
| Operating activities: |
||||||||
| Net income |
$ | 83,040 | $ | 42,579 | ||||
| Adjustments to reconcile net income to net cash provided by continuing operating activities: |
||||||||
| Depreciation and amortization |
32,667 | 17,090 | ||||||
| Amortization of debt issuance costs |
3,198 | 2,264 | ||||||
| Equity-based compensation expense |
10,058 | 5,249 | ||||||
| Deferred income tax expense |
7,215 | 10,083 | ||||||
| Loss from discontinued operations, net of taxes |
192 | 691 | ||||||
| Debt extinguishment costs |
— | 9,350 | ||||||
| Gain on foreign currency derivatives |
(15,262 | ) | — | |||||
| Other |
488 | 21 | ||||||
| Change in operating assets and liabilities, net of effect of acquisitions: |
||||||||
| Accounts receivable, net |
(15,110 | ) | (21,242 | ) | ||||
| Other current assets |
(2,011 | ) | (3,652 | ) | ||||
| Other assets |
(6,513 | ) | (2,239 | ) | ||||
| Accounts payable and other accrued liabilities |
2,793 | (848 | ) | |||||
| Accrued salaries and benefits |
11,980 | 2,803 | ||||||
| Other liabilities |
2,749 | 3,181 | ||||||
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| Net cash provided by continuing operating activities |
115,484 | 65,330 | ||||||
| Net cash (used in) provided by discontinued operating activities |
(198 | ) | 232 | |||||
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| Net cash provided by operating activities |
115,286 | 65,562 | ||||||
| Investing activities: |
||||||||
| Cash paid for acquisitions, net of cash acquired |
(738,702 | ) | (164,019 | ) | ||||
| Cash paid for capital expenditures |
(113,244 | ) | (68,941 | ) | ||||
| Cash paid for real estate acquisitions |
(23,177 | ) | (8,092 | ) | ||||
| Settlement of foreign currency derivatives |
15,262 | — | ||||||
| Other |
(913 | ) | (1,926 | ) | ||||
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| Net cash used in investing activities |
(860,774 | ) | (242,978 | ) | ||||
| Financing activities: |
||||||||
| Borrowings on long-term debt |
542,500 | 150,000 | ||||||
| Borrowings on revolving credit facility |
230,500 | 61,500 | ||||||
| Principal payments on revolving credit facility |
(284,000 | ) | (8,000 | ) | ||||
| Principal payments on long-term debt |
(7,695 | ) | (7,680 | ) | ||||
| Repayment of long-term debt |
— | (52,500 | ) | |||||
| Payment of debt issuance costs |
(12,993 | ) | (4,307 | ) | ||||
| Payment of premium on note redemption |
— | (6,759 | ) | |||||
| Issuance of common stock, net |
374,431 | (205 | ) | |||||
| Common stock withheld for minimum statutory taxes, net |
(4,099 | ) | (1,242 | ) | ||||
| Excess tax benefit from equity awards |
4,617 | 1,779 | ||||||
| Cash paid for contingent consideration |
(5,000 | ) | — | |||||
| Other |
(289 | ) | — | |||||
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| Net cash provided by financing activities |
837,972 | 132,586 | ||||||
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| Effect of exchange rate changes on cash |
(3,013 | ) | — | |||||
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| Net increase (decrease) in cash and cash equivalents |
89,471 | (44,830 | ) | |||||
| Cash and cash equivalents at beginning of the period |
4,569 | 49,399 | ||||||
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| Cash and cash equivalents at end of the period |
$ | 94,040 | $ | 4,569 | ||||
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| Effect of acquisitions: |
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| Assets acquired, excluding cash |
$ | 819,518 | $ | 192,928 | ||||
| Liabilities assumed |
(78,849 | ) | (17,725 | ) | ||||
| Deposits paid for acquisitions |
— | 500 | ||||||
| Prior year deposits paid for acquisitions |
(500 | ) | (11,684 | ) | ||||
| Contingent consideration issued in connection with acquisition |
(1,467 | ) | — | |||||
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| Cash paid for acquisitions, net of cash acquired |
$ | 738,702 | $ | 164,019 | ||||
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ACHC Reports Fourth Quarter and Full Year Results
Page 7
February 11, 2015
Acadia Healthcare Company, Inc.
Operating Statistics
(Unaudited)
(Revenue in thousands)
| Three Months Ended December 31, | Year Ended December 31, | |||||||||||||||||||||||
| 2014 | 2013 | % Change | 2014 | 2013 | % Change | |||||||||||||||||||
| Same Facility Results |
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| Revenue |
$ | 212,439 | $ | 189,327 | 12.2 | % | $ | 788,173 | $ | 710,695 | 10.9 | % | ||||||||||||
| Patient Days |
317,361 | 284,753 | 11.5 | % | 1,183,386 | 1,073,136 | 10.3 | % | ||||||||||||||||
| Admissions |
18,785 | 15,698 | 19.7 | % | 67,116 | 57,568 | 16.6 | % | ||||||||||||||||
| Average Length of Stay (a) |
16.9 | 18.1 | -6.9 | % | 17.6 | 18.6 | -5.4 | % | ||||||||||||||||
| Revenue per Patient Day |
$ | 669 | $ | 665 | 0.7 | % | $ | 666 | $ | 662 | 0.6 | % | ||||||||||||
| EBITDA margin |
26.2 | % | 24.6 | % | 160 bps | 26.1 | % | 24.3 | % | 180 bps | ||||||||||||||
| U.S. Facility Results |
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| Revenue |
$ | 219,800 | $ | 189,327 | 16.1 | % | $ | 850,625 | $ | 710,695 | 19.7 | % | ||||||||||||
| Patient Days |
323,199 | 284,753 | 13.5 | % | 1,262,445 | 1,073,136 | 17.6 | % | ||||||||||||||||
| Admissions |
19,368 | 15,698 | 23.4 | % | 76,143 | 57,568 | 32.3 | % | ||||||||||||||||
| Average Length of Stay (a) |
16.7 | 18.1 | -8.0 | % | 16.6 | 18.6 | -11.1 | % | ||||||||||||||||
| Revenue per Patient Day |
$ | 680 | $ | 665 | 2.3 | % | $ | 674 | $ | 662 | 1.7 | % | ||||||||||||
| EBITDA margin |
25.2 | % | 24.6 | % | 60 bps | 24.6 | % | 24.3 | % | 30 bps | ||||||||||||||
| U.K. Facility Results |
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| Revenue |
$ | 75,101 | $ | 151,127 | ||||||||||||||||||||
| Patient Days |
101,902 | 197,277 | ||||||||||||||||||||||
| Admissions |
271 | 590 | ||||||||||||||||||||||
| Average Length of Stay (a) |
376.0 | 334.4 | ||||||||||||||||||||||
| Revenue per Patient Day |
$ | 737 | $ | 766 | ||||||||||||||||||||
| EBITDA margin |
26.1 | % | 26.4 | % | ||||||||||||||||||||
| Total Facility Results |
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| Revenue |
$ | 294,901 | $ | 189,327 | 55.8 | % | $ | 1,001,752 | $ | 710,695 | 41.0 | % | ||||||||||||
| Patient Days |
425,101 | 284,753 | 49.3 | % | 1,459,722 | 1,073,136 | 36.0 | % | ||||||||||||||||
| Admissions |
19,639 | 15,698 | 25.1 | % | 76,733 | 57,568 | 33.3 | % | ||||||||||||||||
| Average Length of Stay (a) |
21.6 | 18.1 | 19.3 | % | 19.0 | 18.6 | 2.1 | % | ||||||||||||||||
| Revenue per Patient Day |
$ | 694 | $ | 665 | 4.3 | % | $ | 686 | $ | 662 | 3.6 | % | ||||||||||||
| EBITDA margin |
25.4 | % | 24.6 | % | 80 bps | 24.9 | % | 24.3 | % | 60 bps | ||||||||||||||
| (a) | Average length of stay is defined as patient days divided by admissions. |
- MORE -
ACHC Reports Fourth Quarter and Full Year Results
Page 8
February 11, 2015
Acadia Healthcare Company, Inc.
Reconciliation of Net Income to Adjusted EBITDA
(Unaudited)
| Three Months Ended December 31, | Year Ended December 31, | |||||||||||||||
| 2014 | 2013 | 2014 | 2013 | |||||||||||||
| (in thousands) | ||||||||||||||||
| Net income |
$ | 22,129 | $ | 12,280 | $ | 83,040 | $ | 42,579 | ||||||||
| Loss from discontinued operations |
172 | 119 | 192 | 691 | ||||||||||||
| Provision for income taxes |
12,539 | 7,536 | 42,922 | 25,975 | ||||||||||||
| Interest expense, net |
14,716 | 9,578 | 48,221 | 37,250 | ||||||||||||
| Depreciation and amortization |
10,971 | 4,842 | 32,667 | 17,090 | ||||||||||||
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| EBITDA |
60,527 | 34,355 | 207,042 | 123,585 | ||||||||||||
| Adjustments: |
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| Equity-based compensation expense (a) |
3,083 | 1,505 | 10,058 | 5,249 | ||||||||||||
| Debt extinguishment costs (b) |
— | — | — | 9,350 | ||||||||||||
| Gain on foreign currency derivatives (c) |
— | — | (15,262 | ) | — | |||||||||||
| Transaction-related expenses (d) |
2,816 | 3,337 | 13,650 | 7,150 | ||||||||||||
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| Adjusted EBITDA |
$ | 66,426 | $ | 39,197 | $ | 215,488 | $ | 145,334 | ||||||||
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See footnotes on page 10.
- MORE -
ACHC Reports Fourth Quarter and Full Year Results
Page 9
February 11, 2015
Acadia Healthcare Company, Inc.
Reconciliation of Adjusted Income from Continuing Operations to Income from
Continuing Operations
(Unaudited)
| Three Months Ended December 31, | Year Ended December 31, | |||||||||||||||
| 2014 | 2013 | 2014 | 2013 | |||||||||||||
| (in thousands, except per share amounts) | ||||||||||||||||
| Income from continuing operations |
$ | 22,301 | $ | 12,399 | $ | 83,232 | $ | 43,270 | ||||||||
| Provision for income taxes |
12,539 | 7,536 | 42,922 | 25,975 | ||||||||||||
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| Income from continuing operations before income taxes |
34,840 | 19,935 | 126,154 | 69,245 | ||||||||||||
| Adjustments to income from continuing operations: |
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| Debt extinguishment costs (b) |
— | — | — | 9,350 | ||||||||||||
| Gain on foreign currency derivatives (c) |
— | — | (15,262 | ) | — | |||||||||||
| Transaction-related expenses (d) |
2,816 | 3,337 | 13,650 | 7,150 | ||||||||||||
| Income tax provision reflecting tax effect of adjustments to income from continuing operations (e) |
(10,506 | ) | (8,797 | ) | (39,522 | ) | (32,172 | ) | ||||||||
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| Adjusted income from continuing operations |
$ | 27,150 | $ | 14,475 | $ | 85,020 | $ | 53,573 | ||||||||
| Weighted-average shares outstanding - diluted |
59,529 | 50,411 | 55,327 | 50,261 | ||||||||||||
| Adjusted income from continuing operations per diluted share |
$ | 0.46 | $ | 0.29 | $ | 1.54 | $ | 1.07 | ||||||||
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See footnotes on page 10.
- MORE -
ACHC Reports Fourth Quarter and Full Year Results
Page 10
February 11, 2015
Acadia Healthcare Company, Inc.
Footnotes
We have included certain financial measures in this press release, including EBITDA, Adjusted EBITDA and Adjusted income from continuing operations, 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 loss from discontinued operations, net interest expense, income tax provision and depreciation and amortization. We define Adjusted EBITDA as EBITDA adjusted for equity-based compensation expense, debt extinguishment costs, gain on foreign currency derivatives and transaction-related expenses.
EBITDA, Adjusted EBITDA and Adjusted income from continuing operations 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 from continuing operations 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 from continuing operations may not be comparable to similarly titled measures of other companies. We have included information concerning EBITDA, Adjusted EBITDA and Adjusted income from continuing operations 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 from continuing operations when reporting their results. Our presentation of EBITDA, Adjusted EBITDA and Adjusted income from continuing operations 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 debt extinguishment costs related to the repayment of $52.5 million of the Company’s 12.875% Senior Notes due 2018 on March 12, 2013, including a prepayment premium of $6.8 million and the write-off of $2.6 million of deferred financing costs. |
| (c) | Represents the change in fair value of foreign currency derivatives purchased by Acadia related to its acquisition of Partnerships in Care on July 1, 2014. |
| (d) | Represents transaction-related expenses incurred by Acadia related to acquisitions. |
| (e) | Represents the income tax provision adjusted to reflect the tax effect of the adjustments to income from continuing operations based on tax rates of 27.9% for the three months ended December 31, 2014 and 31.7% for the year ended December 31, 2014. |
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