EX-99 2 a51451621ex99.htm EXHIBIT 99

Exhibit 99.1

Acadia Healthcare Reports Third Quarter Financial Results Consistent with Previously Announced Preliminary Financial Results

Revises Financial Guidance for 2016

Expects to Close U.K. Divestiture Transaction in the Fourth Quarter

FRANKLIN, Tenn.--(BUSINESS WIRE)--November 1, 2016--Acadia Healthcare Company, Inc. (NASDAQ: ACHC) today announced financial results for the third quarter and nine months ended September 30, 2016. Revenue for the quarter was $734.7 million, an increase of 53.1% from $479.7 million for the third quarter of 2015. Loss from continuing operations attributable to Acadia stockholders was $117.8 million, or $1.36 per diluted share, compared with income from continuing operations of $29.5 million, or $0.42 per diluted share, for the third quarter of 2015. Results for the third quarter of 2016 include a loss on the planned U.K. divestiture of approximately $174.7 million, which includes an allocation of the goodwill related to the U.K. operations to the facilities held for sale of $106.9 million, estimated transaction-related expenses of $25.6 million, and a loss on the sale of properties of $42.2 million. Adjusted income from continuing operations attributable to Acadia stockholders grew 13.7% to $49.9 million for the third quarter of 2016 from $43.9 million for the third quarter of 2015, and adjusted EPS was $0.58, a 6.5% decrease from $0.62. Weighted average diluted shares outstanding increased 22.0% for the third quarter of 2016 from the third quarter of 2015, primarily due to the issuance of common stock in January and February 2016 related to the acquisition of Priory Group. A reconciliation of all non-GAAP financial results in this release appears beginning on page 8.

For the first nine months of 2016, revenue was $2.1 billion, up 62.3% from $1.3 billion for the first nine months of 2015. Loss from continuing operations attributable to Acadia stockholders for the first nine months of 2016 was $35.7 million, or $0.42 per diluted share, compared with income from continuing operations of $78.0 million, or $1.15 per diluted share, for the same period in 2015. Adjusted income from continuing operations attributable to Acadia stockholders was $158.9 million for the first nine months of 2016, an increase of 43.9% from $110.5 million for the comparable period in 2015, and adjusted EPS increased 13.4% to $1.86 from $1.64. Weighted average diluted shares outstanding increased 26.8% for the first nine months of 2016 from the first nine months of 2015.

“Acadia’s revenue grew in excess of 50% for the third quarter of 2016, the ninth consecutive quarter of such growth versus the comparable prior year quarter,” commented Joey Jacobs, Chairman and Chief Executive Officer of Acadia. “For the latest quarter, this growth was, again, primarily due to the increase in our inpatient beds during the last 12 months. We had approximately 17,900 beds at September 30, 2016, including approximately 7,100 added through the acquisition of the Priory Group in the first quarter of 2016, compared with approximately 9,600 a year earlier. For the nine months ended September 30, 2016, we added approximately 7,300 beds through acquisitions, 548 beds to existing facilities and 140 beds through the opening of two de novo facilities. During the third quarter, we added 173 beds to existing facilities in the U.S. and U.K. As previously announced on October 18, 2016, we signed a definitive agreement to sell 21 existing behavioral health facilities and one de novo behavioral health facility with approximately 1,000 beds in the U.K., subject to approval of the Competition and Markets Authority (CMA).”

The Company’s third quarter revenue growth also reflected a consolidated 6.2% increase in same facility revenue, compared with the third quarter last year, which was less than anticipated. Same facility revenue in the U.K. increased 5.1% compared with an increase of 8.5% for the third quarter last year. Acadia believes this lower growth rate was primarily the result of the disruption to U.K. operations related to the July 14, 2016, announcement by the CMA regarding the Priory acquisition and subsequent events that led to the Company’s definitive agreement to sell facilities in the U.K. to address the CMA’s competitive concerns.

In the U.S., same facility revenue growth was 6.5% for the third quarter of 2016, compared to 5.9% for the same period last year. While the growth rate improved from last year, it is lower than we anticipated. Additionally, the third quarter results were also affected by a slower than expected ramping at several de novo acute inpatient facilities opened in 2015 and 2016.

Acadia had $27.8 million in cash and cash equivalents at the end of the third quarter of 2016, and net cash provided by continuing operations increased 49.8% to $79.4 million for the quarter and 84.7% to $265.2 million for the first nine months of 2016, compared with the same periods in 2015. At the end of the third quarter, the Company had significant availability under its $300 million revolving credit facility.

Based on Acadia’s results for the third quarter and outlook for the fourth quarter, including the impact of the exchange rate and the planned U.K. divestiture transaction, the Company today revised its guidance for 2016 adjusted earnings per diluted share to a range of $2.41 to $2.42. Adjusted earnings per diluted share for the fourth quarter is projected to be in a range of $0.55 to $0.56 and assumes an exchange rate of $1.22 per British Pound Sterling. The fourth quarter guidance was negatively impacted by approximately $0.03 to reflect the lower exchange rate and $0.02 for the net impact of the divestiture transaction, which is expected to close on November 30, 2016. Acadia’s guidance also assumes a tax rate of 22%. 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 third quarter financial results at 9:00 a.m. Eastern Time on Wednesday, November 2, 2016. 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 November 18, 2016.

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) the CMA’s acceptance of our undertakings to address its concerns relating to the Priory transaction and approval of the sale to BC Partners; (ii) our ability to divest facilities and fulfill our undertakings to the CMA on acceptable terms and within expected timeframes; (iii) 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; (iv) the impact of fluctuations in foreign exchange rates, including the recent devaluation of the British Pound Sterling (GBP) relative to the U.S. Dollar (USD) following the Brexit vote; (v) Acadia’s ability to complete acquisitions and successfully integrate the operations of acquired facilities, including Priory facilities; (vi) Acadia’s ability to add beds, expand services, enhance marketing programs and improve efficiencies at its facilities; (vii) potential reductions in payments received by Acadia from government and third-party payors; (viii) the occurrence of patient incidents, which could adversely affect the price of our common stock and result in incremental regulatory burdens and governmental investigations; (ix) 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 (x) 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 589 behavioral healthcare facilities with approximately 17,900 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, residential treatment centers, outpatient clinics and therapeutic school-based programs.

 
 
 
Acadia Healthcare Company, Inc.
Condensed Consolidated Statements of Operations
(Unaudited)
 
      Three Months Ended September 30,     Nine Months Ended September 30,
2016     2015 2016     2015
(In thousands, except per share amounts)
 
Revenue before provision for doubtful accounts $ 744,802 $ 488,746 $ 2,139,039 $ 1,324,702
Provision for doubtful accounts   (10,137 )   (9,016 )   (31,013 )   (25,529 )
Revenue 734,665 479,730 2,108,026 1,299,173
 

Salaries, wages and benefits (including equity-based compensation expense of $7,145, $5,327, $20,989 and $14,576, respectively)

408,242 258,410 1,157,557 707,583
Professional fees 47,687 30,759 137,970 83,215
Supplies 30,555 21,634 88,449 58,430
Rents and leases 19,740 8,542 55,013 22,639
Other operating expenses 79,748 57,244 230,950 148,899
Depreciation and amortization 36,418 16,890 101,145 44,920
Interest expense, net 48,843 27,737 135,315 77,932
Debt extinguishment costs 3,411 9,979 3,411 9,979
Loss on divestiture 174,739 - 174,739 -
(Gain) loss on foreign currency derivatives (15 ) 1,018 (523 ) 1,926
Transaction-related expenses   1,111     5,842     33,483     31,415  
Total expenses   850,479     438,055     2,117,509     1,186,938  
(Loss) income from continuing operations before income taxes (115,814 ) 41,675 (9,483 ) 112,235
Provision for income taxes   2,396     12,669     27,767     34,794  
(Loss) income from continuing operations (118,210 ) 29,006 (37,250 ) 77,441
Income from discontinued operations, net of income taxes   -     80     -     83  
Net (loss) income (118,210 ) 29,086 (37,250 ) 77,524
Net loss attributable to noncontrolling interests   402     464     1,575     464  
Net (loss) income attributable to Acadia Healthcare Company, Inc. $ (117,808 ) $ 29,550   $ (35,675 ) $ 77,988  
 

Basic earnings attributable to Acadia Healthcare Company, Inc. stockholders:

(Loss) income from continuing operations $ (1.36 ) $ 0.42 $ (0.42 ) $ 1.16
Income from discontinued operations   -     -     -     -  
Net (loss) income $ (1.36 ) $ 0.42   $ (0.42 ) $ 1.16  
 

Diluted earnings attributable to Acadia Healthcare Company, Inc. stockholders:

(Loss) income from continuing operations $ (1.36 ) $ 0.42 $ (0.42 ) $ 1.15
Income from discontinued operations   -     -     -     -  
Net (loss) income $ (1.36 ) $ 0.42   $ (0.42 ) $ 1.15  
 
Weighted-average shares outstanding:
Basic 86,618 70,664 85,376 67,194
Diluted 86,618 71,110 85,376 67,539
 
 
 
Acadia Healthcare Company, Inc.
Condensed Consolidated Balance Sheets
(Unaudited)
 
     

September 30,

2016

   

December 31,

2015

(In thousands)
 
ASSETS
Current assets:
Cash and cash equivalents $ 27,751 $ 11,215

Accounts receivable, net of allowance for doubtful accounts of $37,725 and $29,332, respectively

277,568 216,626
Other current assets   87,628     66,895  
Total current assets 392,947 294,736
Property and equipment, net 2,786,646 1,709,053
Goodwill 2,702,009 2,128,215
Intangible assets, net 84,385 59,575
Deferred tax assets - noncurrent 3,791 49,114
Derivative instruments 49,903 -
Assets held for sale 392,483 -
Other assets   40,814     38,515  
Total assets $ 6,452,978   $ 4,279,208  
 
 
LIABILITIES AND EQUITY
Current liabilities:
Current portion of long-term debt $ 77,598 $ 45,360
Accounts payable 92,819 91,341
Accrued salaries and benefits 105,308 80,696
Other accrued liabilities   104,513     72,806  
Total current liabilities 380,238 290,203
Long-term debt 3,583,879 2,195,384
Deferred tax liabilities - noncurrent 81,443 23,936
Other liabilities   147,150     78,602  
Total liabilities 4,192,710 2,588,125
Redeemable noncontrolling interests 18,147 8,055
Equity:
Common stock 866 707
Additional paid-in capital 2,488,803 1,572,972
Accumulated other comprehensive loss (425,869 ) (104,647 )
Retained earnings   178,321     213,996  
Total equity   2,242,121     1,683,028  
Total liabilities and equity $ 6,452,978   $ 4,279,208  
 
 
 
Acadia Healthcare Company, Inc.
Condensed Consolidated Statements of Cash Flows
(Unaudited)
   
Nine Months Ended September 30,
2016 2015
(In thousands)
Operating activities:
Net (loss) income $ (37,250 ) $ 77,524
Adjustments to reconcile net (loss) income to net cash provided by continuing operating activities:
Depreciation and amortization 101,145 44,920
Amortization of debt issuance costs 7,714 5,017
Equity-based compensation expense 20,989 14,576
Deferred income tax expense 25,857 28,925
Income from discontinued operations, net of taxes - (83 )
Debt extinguishment costs 3,411 9,979
Loss on divestiture 174,739 -
(Gain) loss on foreign currency derivatives (523 ) 1,926
Other 731 1,122
Change in operating assets and liabilities, net of effect of acquisitions:
Accounts receivable, net (12,579 ) (28,905 )
Other current assets (12,973 ) (12,201 )
Other assets (1,134 ) (4,879 )
Accounts payable and other accrued liabilities 2,067 (8,316 )
Accrued salaries and benefits (10,759 ) 8,888
Other liabilities   3,746     5,071  
Net cash provided by continuing operating activities 265,181 143,564
Net cash used in discontinued operating activities   (5,524 )   (1,479 )
Net cash provided by operating activities 259,657 142,085
 
Investing activities:
Cash paid for acquisitions, net of cash acquired (683,285 ) (391,216 )
Cash paid for capital expenditures (249,961 ) (200,841 )
Cash paid for real estate acquisitions (37,947 ) (21,976 )
Settlement of foreign currency derivatives 523 (1,926 )
Other   (1,135 )   (887 )
Net cash used in investing activities (971,805 ) (616,846 )
 
Financing activities:
Borrowings on long-term debt 1,480,000 1,150,000
Borrowings on revolving credit facility 179,000 310,000
Principal payments on revolving credit facility (166,000 ) (310,000 )
Principal payments on long-term debt (46,069 ) (23,813 )
Repayment of assumed debt (1,348,389 ) (904,467 )
Repayment of senior notes - (88,331 )
Payment of debt issuance costs (35,748 ) (25,584 )
Payment of premium on senior notes - (6,890 )
Issuance of common stock, net 685,097 331,360
Common stock withheld for minimum statutory taxes, net (7,917 ) (7,582 )
Excess tax benefit from equity awards - 8,020
Other   (1,821 )   (374 )
Net cash provided by financing activities   738,153     432,339  
 
Effect of exchange rate changes on cash   (9,469 )   (856 )
 
Net increase (decrease) in cash and cash equivalents 16,536 (43,278 )
Cash and cash equivalents at beginning of the period   11,215     94,040  
Cash and cash equivalents at end of the period $ 27,751   $ 50,762  
$ -
Effect of acquisitions:
Assets acquired, excluding cash $ 2,505,407 $ 1,793,139
Liabilities assumed (1,605,240 ) (1,012,549 )
Issuance of common stock in connection with acquisition (216,882 ) (380,210 )
Redeemable noncontrolling interest resulting from an acquisition   -     (9,164 )
Cash paid for acquisitions, net of cash acquired $ 683,285   $ 391,216  
 
 
 
Acadia Healthcare Company, Inc.
Operating Statistics
(Unaudited, Revenue in thousands)
 
      Three Months Ended September 30,   Nine Months Ended September 30,
2016   2015   % Change 2016   2015   % Change
Same Facility Results (a,c)
Revenue $ 479,548 $ 451,431 6.2 % $ 1,349,320 $ 1,252,370 7.7 %
Patient Days 725,761 683,043 6.3 % 1,991,511 1,853,799 7.4 %
Admissions 34,094 31,790 7.2 % 96,041 87,940 9.2 %
Average Length of Stay (b) 21.3 21.5 -0.9 % 20.7 21.1 -1.6 %
Revenue per Patient Day $ 661 $ 661 0.0 % $ 678 $ 676 0.3 %
EBITDA margin 26.9 % 27.4 % -50 bps 27.4 % 27.1 % 30 bps
 
U.S. Same Facility Results (a)
Revenue $ 392,436 $ 368,507 6.5 % $ 1,104,014 $ 1,020,673 8.2 %
Patient Days 568,103 534,745 6.2 % 1,581,786 1,476,581 7.1 %
Admissions 33,682 31,329 7.5 % 95,045 86,894 9.4 %
Average Length of Stay (b) 16.9 17.1 -1.2 % 16.6 17.0 -2.1 %
Revenue per Patient Day $ 691 $ 689 0.2 % $ 698 $ 691 1.0 %
EBITDA margin 27.4 % 28.2 % -80 bps 27.9 % 27.7 % 20 bps
 
U.K. Same Facility Results (c)
Revenue $ 87,112 $ 82,924 5.1 % $ 245,306 $ 231,697 5.9 %
Patient Days 157,658 148,298 6.3 % 409,725 377,218 8.6 %
Admissions 412 461 -10.6 % 996 1,046 -4.8 %
Average Length of Stay (b) 382.7 321.7 19.0 % 411.4 360.6 14.1 %
Revenue per Patient Day $ 553 $ 559 -1.2 % $ 599 $ 614 -2.5 %
EBITDA margin 24.6 % 23.5 % 110 bps 25.0 % 24.3 % 70 bps
 
 
U.S. Facility Results
Revenue $ 431,521 $ 379,857 13.6 % $ 1,269,994 $ 1,037,250 22.4 %
Patient Days 604,472 542,345 11.5 % 1,756,714 1,484,181 18.4 %
Admissions 37,039 32,101 15.4 % 107,719 87,666 22.9 %
Average Length of Stay (b) 16.3 16.9 -3.4 % 16.3 16.9 -3.7 %
Revenue per Patient Day $ 714 $ 700 1.9 % $ 723 $ 699 3.4 %
EBITDA margin 25.2 % 26.8 % -160 bps 26.3 % 27.0 % -70 bps
 
U.K. Facility Results (c)
Revenue $ 303,146 $ 82,924 265.6 % $ 836,004 $ 231,697 260.8 %
Patient Days 765,723 148,298 416.3 % 1,976,425 377,218 423.9 %
Admissions 2,996 461 549.9 % 7,395 1,046 607.0 %
Average Length of Stay (b) 255.6 321.7 -20.5 % 267.3 360.6 -25.9 %
Revenue per Patient Day $ 396 $ 559 -29.2 % $ 423 $ 614 -31.1 %
EBITDA margin 22.4 % 23.5 % -110 bps 22.2 % 24.3 % -210 bps
 
Total Facility Results (c)
Revenue $ 734,667 $ 462,781 58.8 % $ 2,105,998 $ 1,268,947 66.0 %
Patient Days 1,370,195 690,643 98.4 % 3,733,139 1,861,399 100.6 %
Admissions 40,035 32,562 23.0 % 115,114 88,712 29.8 %
Average Length of Stay (b) 34.2 21.2 61.4 % 32.4 21.0 54.6 %
Revenue per Patient Day $ 536 $ 670 -20.0 % $ 564 $ 682 -17.2 %
EBITDA margin 24.0 % 26.2 % -220 bps 24.7 % 26.5 % -180 bps
 
(a) Same-facility results for the periods presented exclude certain services at three locations that will be closed and six outpatient programs that have been closed.
(b) Average length of stay is defined as patient days divided by admissions.
(c) Revenue and revenue per patient day for the three and nine months ended September 30, 2015 are adjusted to reflect the foreign currency exchange rate for the comparable period of 2016 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 and nine months ended September 30, 2015 is 1.31 and 1.39, respectively.
 
 
 
Acadia Healthcare Company, Inc.
Reconciliation of Net (Loss) Income Attributable to Acadia Healthcare Company, Inc. to Adjusted EBITDA
(Unaudited)
                 
Three Months Ended September 30, Nine Months Ended September 30,
2016 2015 2016 2015
(in thousands)
 
Net (loss) income attributable to Acadia Healthcare Company, Inc. $ (117,808 ) $ 29,550 $ (35,675 ) $ 77,988
Income from discontinued operations, net of income taxes - (80 ) - (83 )
Net loss attributable to noncontrolling interests (402 ) (464 ) (1,575 ) (464 )
Provision for income taxes 2,396 12,669 27,767 34,794
Interest expense, net 48,843 27,737 135,315 77,932
Depreciation and amortization   36,418     16,890     101,145     44,920  
EBITDA (30,553 ) 86,302 226,977 235,087
 
Adjustments:
Equity-based compensation expense (a) 7,145 5,327 20,989 14,576
Debt extinguishment costs (b) 3,411 9,979 3,411 9,979
Loss on divestiture (c) 174,739 - 174,739 -
(Gain) loss on foreign currency derivatives (d) (15 ) 1,018 (523 ) 1,926
Transaction-related expenses (e)   1,111     5,842     33,483     31,415  
Adjusted EBITDA $ 155,838   $ 108,468   $ 459,076   $ 292,983  
 
See footnotes on page 11.
 
 
 
Acadia Healthcare Company, Inc.
Reconciliation of Adjusted Income from Continuing Operations Attributable to Acadia Healthcare Company, Inc. to
Net (Loss) Income Attributable to Acadia Healthcare Company, Inc.
(Unaudited)
           
Three Months Ended September 30, Nine Months Ended September 30,
2016 2015 2016 2015
(in thousands, except per share amounts)
 
Net (loss) income attributable to Acadia Healthcare Company, Inc. $ (117,808 ) $ 29,550 $ (35,675 ) $ 77,988
Income from discontinued operations, net of income taxes - (80 ) - (83 )
Provision for income taxes   2,396     12,669     27,767     34,794  

(Loss) income from continuing operations attributable to Acadia Healthcare Company, Inc. before income taxes

(115,412 ) 42,139 (7,908 ) 112,699
 
Adjustments to (loss) income from continuing operations:
Debt extinguishment costs (b) 3,411 9,979 3,411 9,979
Loss on divestiture (c) 174,739 - 174,739 -
(Gain) loss on foreign currency derivatives (d) (15 ) 1,018 (523 ) 1,926
Transaction-related expenses (e) 1,111 5,842 33,483 31,415

Income tax provision reflecting tax effect of adjustments to income from continuing operations (f)

  (13,916 )   (15,088 )   (44,298 )   (45,558 )

Adjusted income from continuing operations attributable to Acadia Healthcare Company, Inc.

$ 49,918 $ 43,890 $ 158,904 $ 110,461
 
Weighted-average shares outstanding - diluted (g) 86,778 71,110 85,643 67,539
 

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

$ 0.58   $ 0.62   $ 1.86   $ 1.64  
 
See footnotes on page 11.
 
 
 
Acadia Healthcare Company, Inc.
Constant Currency Condensed Consolidated Statements of Operations (h)
(Unaudited)
 
      Three Months Ended September 30,     Nine Months Ended September 30,
2016     2015 2016     2015
(In thousands, except per share amounts)
 
Revenue before provision for doubtful accounts $ 799,559 $ 488,746 $ 2,227,782 $ 1,324,702
Provision for doubtful accounts   (10,142 )   (9,016 )   (31,021 )   (25,529 )
Revenue 789,417 479,730 2,196,761 1,299,173
 

Salaries, wages and benefits (including equity-based compensation expense of $7,145, $5,327, $20,989 and $14,576, respectively)

438,201 258,410 1,206,254 707,583
Professional fees 52,021 30,759 144,808 83,215
Supplies 32,370 21,634 91,419 58,430
Rents and leases 21,658 8,542 58,058 22,639
Other operating expenses 84,222 57,244 238,313 148,899
Depreciation and amortization 40,075 16,890 107,086 44,920
Interest expense, net 48,879 27,737 135,366 77,932
Debt extinguishment costs 3,411 9,979 3,411 9,979
Loss on divestiture 203,964 - 203,964 -
(Gain) loss on foreign currency derivatives (15 ) 1,018 (523 ) 1,926
Transaction-related expenses   1,436     5,842     34,255     31,415  
Total expenses   926,222     438,055     2,222,411     1,186,938  
(Loss) income from continuing operations before income taxes (136,805 ) 41,675 (25,650 ) 112,235
Provision for income taxes   1,009     12,669     26,357     34,794  
(Loss) income from continuing operations (137,814 ) 29,006 (52,007 ) 77,441
Income from discontinued operations, net of income taxes   -     80     -     83  
Net (loss) income (137,814 ) 29,086 (52,007 ) 77,524
Net loss attributable to noncontrolling interests   402     464     1,575     464  
Net (loss) income attributable to Acadia Healthcare Company, Inc. $ (137,412 ) $ 29,550   $ (50,432 ) $ 77,988  
 
 
Constant Currency Reconciliation of Adjusted Income from Continuing Operations Attributable to Acadia Healthcare Company, Inc. to
Net (Loss) Income Attributable to Acadia Healthcare Company, Inc. (h)
(Unaudited)
 
Net (loss) income attributable to Acadia Healthcare Company, Inc. $ (137,412 ) $ 29,550 $ (50,432 ) $ 77,988
Income from discontinued operations, net of income taxes - (80 ) - (83 )
Provision for income taxes   1,009     12,669     26,357     34,794  

(Loss) income from continuing operations attributable to Acadia Healthcare Company, Inc. before income taxes

$ (136,403 ) $ 42,139 $ (24,075 ) $ 112,699
 
Adjustments to (loss) income from continuing operations:
Debt extinguishment costs (b) 3,411 9,979 3,411 9,979
Loss on divestiture (c) 203,964 - 203,964 -
(Gain) loss on foreign currency derivatives (d) (15 ) 1,018 (523 ) 1,926
Transaction-related expenses (e) 1,436 5,842 34,255 31,415

Income tax provision reflecting tax effect of adjustments to income from continuing operations (f)

  (14,044 )   (15,088 )   (44,492 )   (45,558 )

Adjusted income from continuing operations attributable to Acadia Healthcare Company, Inc.

$ 58,349 $ 43,890 $ 172,540 $ 110,461
 
Weighted-average shares outstanding - diluted (g) 86,778 71,110 85,643 67,539
 

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

$ 0.67   $ 0.62   $ 2.01   $ 1.64  
 
See footnotes on page 11.
 
 
 
Acadia Healthcare Company, Inc.
Footnotes
   
We have included certain financial measures in this press release, including EBITDA, Adjusted EBITDA, Adjusted income from continuing operations, and constant currency 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 (loss) income adjusted for income from discontinued operations, net loss attributable to noncontrolling interests, 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, loss on divestiture, (gain) loss on foreign currency derivatives and transaction-related expenses. We define Adjusted income from continuing operations as net (loss) income adjusted for income from discontinued operations, provision for income taxes, debt extinguishment costs, loss on divestiture, transaction-related expenses, (gain) loss on foreign currency derivative and income tax provision reflecting tax effect of adjustments attributable to Acadia.
 
EBITDA, Adjusted EBITDA, Adjusted income from continuing operations and constant currency 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, Adjusted income from continuing operations and constant currency 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, Adjusted income from continuing operations and constant currency adjusted income from continuing operations may not be comparable to similarly titled measures of other companies. We have included information concerning EBITDA, Adjusted EBITDA, Adjusted income from continuing operations and constant currency 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, Adjusted income from continuing operations and constant currency adjusted income from continuing operations when reporting their results. Our presentation of EBITDA, Adjusted EBITDA, Adjusted income from continuing operations and constant currency adjusted income from continuing operations should not be construed as an inference that our future results will be unaffected by unusual or nonrecurring items.
 
Foreign currency exchange rate fluctuations affect the amounts reported from translating U.K. revenues and expenses into USD. These rate fluctuations can have a significant effect on our reported operating results. As a supplement to our reported operating results, we present constant currency financial information. We use constant currency financial information to provide a framework to assess how our business performed excluding the effects of changes in foreign currency translation rates. Management believes this information is useful to investors to facilitate comparison of operating results and better identify trends in our businesses. To calculate financial information on a constant currency basis, financial information in the current period for amounts recorded in GBP is translated into USD at the average exchange rates that were in effect during the comparable period of the prior year (rather than the actual exchange rates in effect during the current year period).
 
The Company is not able to provide a reconciliation of projected 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) For the three and nine months ended September 30, 2016, represents debt extinguishment costs of $3.4 million recorded in connection with the Tranche B-2 Repricing Amendment. For the three and nine months ended September 30, 2015, represents debt extinguishment costs related to the repayment of $88.3 million of the Company's 12.875% Senior Notes due 2018 on September 18, 2015, including a prepayment premium of $6.9 million and the write-off of $3.1 million of deferred financing costs.
 
(c) Loss on the planned divestiture in the U.K. includes an allocation of goodwill to the U.K. disposal group of approximately $106.9 million, estimated transaction-related expenses of approximately $25.6 million and a loss on the sale of properties of $42.2 million.
 
(d) Represents the change in fair value of foreign currency derivatives purchased by Acadia related to (i) acquisitions in the U.K. and (ii) transfers of cash between the U.S. and U.K. under the Company’s cash management and foreign currency risk management programs.
 
(e) Represents transaction-related expenses incurred by Acadia related to acquisitions.
 
(f) Represents the income tax provision adjusted to reflect the tax effect of the adjustments to income from continuing operations based on tax rates of 21.8% and 25.6% for the three months ended September 30, 2016 and 2015, respectively, and 21.8% and 29.2% for the nine months ended September 30, 2016 and 2015, respectively.
 
(g) For the three and nine months ended September 30, 2016, approximately 0.2 million and 0.3 million, respectively, of the outstanding restricted stock and shares of common stock issuable upon exercise of outstanding stock option awards have been included in the calculation of weighted-average shares outstanding-diluted. These shares are excluded from the calculation of diluted earnings per share in the condensed consolidated statement of operations because the net loss for the three and nine months ended September 30, 2016 causes such securities to be anti-dilutive.
 
(h) Calculated on a constant currency basis whereby financial information in the current period for amounts recorded GBP is translated into USD at the average exchange rates in effect during the comparable period of the prior year (rather than the actual exchange rates in effect during the current year period). The exchange rate used for the three and nine months ended September 30, 2016 is 1.55 and 1.53, respectively.
 
 

CONTACT:
Acadia Healthcare Company, Inc.
Brent Turner, President, 615-861-6000