8-K

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 8-K

Current Report
Pursuant to Section 13 or 15(d) of
the Securities Exchange Act of 1934

Date of Report: May 6, 2003

Psychiatric Solutions, Inc.

(Exact Name of Registrant as Specified in Its Charter)

Delaware
(State or Other
Jurisdiction of
Incorporation) 0-20488
(Commission File
Number) 23-2491707
(I.R.S. Employer
Identification
Number)

113 Seaboard Lane, Suite C-100, Franklin, Tennessee 37067
(Address of Principal Executive Offices)

(615) 312-5700
(Registrant’s Telephone Number, including Area Code)

Not Applicable
(Former Name or Former Address, if Changed Since Last Report)

TABLE OF CONTENTS

	Item 7. Financial Statements and Exhibits.
	Item 9. Regulation FD Disclosure.
SIGNATURES
INDEX TO EXHIBITS
EX-99.1 PRESS RELEASE

Item 7. Financial Statements and Exhibits.

     (a)  Financial statements of businesses acquired.

None required

     (b)  Pro forma financial information.

None required

     (c)  Exhibits.

99.1 Press Release: Psychiatric Solutions Announces 60% Growth in First Quarter Revenues; 140% Growth in Pre-Tax Income

Item 9. Regulation FD Disclosure.

     On May 6, 2003, Psychiatric Solutions, Inc. (the “Company”) issued a press release announcing the Company’s operating results for the first quarter ended March 31, 2003. The press release is filed as Exhibit 99.1 hereto and incorporated herein by reference. The Company is furnishing its earnings press release dated May 6, 2003 pursuant to Items 9 and 12 in accordance with SEC Release No. 33-8216.

     The press release contains non-GAAP financial measures. For purposes of Regulation G, a non-GAAP financial measure is a numerical measure of a registrant’s historical or future financial performance, financial position or cash flows that excludes amounts, or is subject to adjustments that have the effect of excluding amounts, that are included in the most directly comparable measure calculated and presented in accordance with GAAP in the statement of income, balance sheet or statement of cash flows (or equivalent statements) of the issuer; or includes amounts, or is subject to adjustments that have the effect of including amounts, that are excluded from the most directly comparable measure so calculated and presented. In this regard, GAAP refers to generally accepted accounting principles in the United States. Pursuant to the requirements of Regulation G, the Company has provided reconciliations within the press release of the non-GAAP financial measures to the most directly comparable GAAP financial measures.

     EBITDA is presented in the press release. EBITDA represents earnings before interest, taxes, depreciation, amortization and other non-cash items. Management routinely calculates and communicates EBITDA and believes that it is useful to investors because it is commonly used as an analytical indicator within the healthcare industry to evaluate hospital performance, allocate resources and measure leverage capacity and debt service ability. EBITDA should not be considered as a measure of financial performance under GAAP, and the items excluded from EBITDA are significant components in understanding and assessing financial performance. A table reconciling EBITDA to net earnings is included in the press release under Unaudited Financial Highlights. EBITDA should not be considered in isolation or as an alternative to net income or other financial statement data presented in the consolidated financial statements as an indicator of financial performance or liquidity. EBITDA, as presented, may not be comparable to similarly titled measures of other companies.

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.

PSYCHIATRIC SOLUTIONS, INC.
By:	/s/ Brent Turner
	Brent Turner Vice President, Treasurer and Investor Relations

Date: May 6, 2003

INDEX TO EXHIBITS

Exhibit No.	Description
99.1	Press Release: Psychiatric Solutions Announces 60% Growth in First Quarter Revenues; 140% Growth in Pre-Tax Income

EX-99.1 3 g82618exv99w1.txt EX-99.1 PRESS RELEASE EXHIBIT 99.1 PSYCHIATRIC SOLUTIONS, INC. [PSI LOGO] CONTACT: Brent Turner Vice President, Treasurer and Investor Relations (615) 312-5700 PSYCHIATRIC SOLUTIONS ANNOUNCES 60% GROWTH IN FIRST QUARTER REVENUES; 140% GROWTH IN PRE-TAX INCOME ---------- REAFFIRMS EARNINGS GUIDANCE FOR FULL-YEAR 2003 Franklin, Tenn. (May 6, 2003) - Psychiatric Solutions, Inc. ("PSI") (Nasdaq: PSYS) today announced financial results for the first quarter of 2003. Revenue for the first quarter, which ended March 31, 2003, increased 60.0% to $37,104,000 from $23,188,000 for the first quarter of 2002. EBITDA (earnings before interest, taxes, depreciation, amortization and other non-cash items) increased 68.5% for the first quarter to $4,453,000 from $2,643,000 for the first quarter of 2002. Fully taxed adjusted net income for the quarter rose 176.4% to $1,288,000 from $466,000 for the first quarter last year. Fully taxed adjusted earnings per diluted share increased 77.8% to $0.16 per diluted share for the quarter from $0.09 for the first quarter of 2002. EBITDA and fully taxed adjusted net income for the first quarter of 2003 exclude the impact of both a non-cash loss of $960,000, or $0.12 per diluted share, for a change in valuation of put warrants and a non-cash gain of $461,000, or $0.06 per diluted share, for a change in reserve on stockholder notes. These items were incurred because of the increase in PSI's stock price during the first quarter of 2003 and, therefore lessen the comparability of PSI's financial results to the first quarter of 2002. These items are not expected to have any significant impact on future financial statements as the Company has reached an agreement in principle for the exercise in full of the warrants and the reserve on the stockholder notes has been substantially relieved. Fully taxed adjusted net income for the first quarter of 2002 assumes an income tax rate of 40.0%. Please see page 4 for a reconciliation of 1) EBITDA with income from continuing operations before income taxes and 2) fully taxed adjusted net income and adjusted earnings per diluted share with net income and earnings per diluted share. Net income for the first quarter of 2003 was $789,000, or $0.10 per diluted share, compared with $755,000, or $0.14 per diluted share, for the first quarter of 2002. "We are pleased with PSI's substantial growth for the first quarter of 2003," commented Joey Jacobs, Chairman, President and Chief Executive Officer of PSI. "We attribute the expansion in our revenues for the quarter both to the addition of the Riveredge Hospital, which we acquired in July 2002 and to organic growth within the other four inpatient psychiatric facilities we owned and operated for the quarter. We expect our ability to expand revenue and profits within our existing operations will continue to be a major contributor to our long-term profitable growth. Our first-quarter results reflect the early success of our strategies to achieve this goal, with first-quarter admissions increasing 6.3% for our five owned facilities operating for this period, compared with the -MORE- PSYS Reports First-Quarter Results Page 2 May 6, 2003 aggregate admissions of the five facilities for the first quarter of 2002, and patient days increasing 7.5% on this same basis. Furthermore, our results for the quarter also benefited from increased operating leverage produced by our top-line growth, which drove an increase in our fully taxed adjusted net income to 3.5% of revenue for the latest quarter from 2.0% for the first quarter of 2002. "In addition to the progress we are making in our organic growth strategy, evident in our first quarter results, we have also produced significant developments since the start of 2003 through our acquisition strategy. As previously announced, we completed the acquisition of six additional inpatient facilities in April 2003, which doubled the number of inpatient beds we have in operation from our total at the end of the first quarter. The six new facilities produced aggregate revenue of $76 million in 2002. "We also announced a definitive agreement during April 2003 for the acquisition of Ramsay Youth Services, Inc. (Nasdaq: RYOU) in a transaction valued at approximately $78 million. PSI and Ramsay continue to expect the transaction to be completed by early July 2003. Completion is subject to customary closing conditions, including receipt of regulatory approvals and approval by Ramsay's stockholders. PSI is in the process of arranging financing for the transaction and has received a "highly confident" letter from its senior lender." Based on the assumption, among others, that the Ramsay transaction is completed effective July 1, 2003, PSI today reaffirmed its earlier guidance for fully taxed earnings per diluted share, excluding nonrecurring items, of $0.65 to $0.70 for 2003. This guidance includes the impact of the Company's $25 million Convertible Preferred Stock transaction, which will add approximately 4.5 million additional common stock equivalents to diluted shares outstanding during 2003. Mr. Jacobs concluded, "We remain enthusiastic about the growth opportunities we see in the inpatient behavioral health industry. We are confident that through an unyielding commitment to providing the highest quality services to our patients, we are well positioned to leverage these opportunities to increase our share of the market, expand our revenue and profits and enhance the value of PSI." PSI will hold a conference call to discuss this release today, at 10:00 a.m. Eastern time. Participants will have the opportunity to listen to the conference call over the Internet by going to www.psysolutions.com and clicking Investor Relations or by going to www.streetevents.com or www.companyboardroom.com. Participants are encouraged to go to the selected web sites at least 15 minutes early to register, download, and install any necessary audio software. For those who cannot listen to the live broadcast, a replay will be available at these sites shortly after the call through the end of business on June 6, 2003. This press release contains forward-looking statements within the meaning of the "safe harbor" provisions of the Private Securities Litigation Reform Act of 1995. These forward-looking statements include statements other than those made solely with respect to historical fact and are based on the intent, belief or current expectations of PSI and its management. Such forward-looking statements are not guarantees of future performance and involve risks and uncertainties that may cause PSI's actual results to differ materially from the results discussed in the forward-looking statements. Risks and uncertainties that might cause such differences include, but are not limited to: (1) the failure to -MORE- PSYS Reports First-Quarter Results Page 3 May 6, 2003 complete the acquisition of Ramsay; (2) potential competition which alters or impedes PSI's acquisition strategy by decreasing PSI's ability to acquire additional facilities on favorable terms; (3) the ability of PSI to improve the operations of acquired facilities; (4) the ability to maintain favorable and continuing relationships with physicians who use PSI's facilities; (5) the limited operating history of PSI; (6) the ability to receive timely additional financing on terms acceptable to PSI to fund PSI's acquisition strategy (including for Ramsay) and capital expenditure needs; (7) risks inherent to the healthcare industry, including the impact of unforeseen changes in regulation, reimbursement rates from federal and state healthcare programs or managed care companies and exposure to claims and legal actions by patients and others; and (8) potential difficulties in integrating the operations of PSI with The Brown Schools, Ramsay and other acquired operations. The forward-looking statements herein are qualified in their entirety by the risk factors set forth in PSI's filings with the Securities and Exchange Commission, including the factors listed in its Annual Report on Form 10-K for the year ended December 31, 2002 under the caption "Risk Factors." PSI undertakes no obligation to update any forward-looking statements, whether as a result of new information, future events or otherwise. Readers should not place undue reliance on forward-looking statements, which reflect management's views only as of the date hereof. Psychiatric Solutions, Inc. offers an extensive continuum of behavioral health programs to critically ill children, adolescents and adults through its ownership and operation of freestanding psychiatric inpatient facilities and its management of psychiatric units within general acute care hospitals. PSI currently owns and operates 11 freestanding inpatient facilities and manages 48 psychiatric units. -MORE- PSYS Reports First-Quarter Results Page 4 May 6, 2003 PSYCHIATRIC SOLUTIONS, INC. UNAUDITED FINANCIAL HIGHLIGHTS (IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)

THREE MONTHS ENDED MARCH 31, ------------------------------ 2003 2002 ------------- ------------- Revenue $ 37,104 $ 23,188 Income from continuing operations before income taxes 1,862 776 Net income $ 789 $ 755 Plus reconciling items: Change in valuation of put warrants 960 -- Change in reserve on stockholder notes (461) -- Additional provision for income taxes to total 40.0% -- (289) ------------- ------------- Adjusted net income $ 1,288 $ 466 ============= ============= Earnings per diluted share $ 0.10 $ 0.14 ============= ============= Adjusted earnings per diluted share $ 0.16 $ 0.09 ============= ============= Diluted shares used in computing per share amounts: 8,209 5,327 EBITDA (a): Income from continuing operations before income taxes $ 1,862 $ 776 Interest 1,420 1,372 Depreciation and amortization 667 386 Non-cash stock compensation 5 109 Change in valuation of put warrants 960 -- Change in reserve on stockholder notes (461) -- ------------- ------------- EBITDA $ 4,453 $ 2,643 ============= =============

(a) EBITDA is commonly used as an analytical indicator within the health care industry and also serves as a measure of leverage capacity and debt service ability. EBITDA should not be considered as a measure of financial performance under generally accepted accounting principles, and the items excluded from EBITDA are significant components in understanding and assessing financial performance. Because EBITDA is not a measurement determined in accordance with generally accepted accounting principles and is thus susceptible to varying calculations, EBITDA as presented may not be comparable to other similarly titled measures of other companies. -MORE- PSYS Reports First-Quarter Results Page 5 May 6, 2003 PSYCHIATRIC SOLUTIONS, INC. CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED, IN THOUSANDS EXCEPT FOR PER SHARE AMOUNTS)

THREE MONTHS ENDED MARCH 31, ------------------------------ 2003 2002 ------------- ------------- Revenue $ 37,104 $ 23,188 Salaries, wages and employee benefits 17,785 13,970 Professional fees 4,451 3,108 Supplies 1,691 1,099 Rentals and leases 248 190 Other operating expenses 7,159 1,572 Provision for bad debts 1,322 715 Depreciation and amortization 667 386 Interest expense 1,420 1,372 Change in valuation of put warrants 960 -- Change in reserve on stockholder notes (461) -- ------------- ------------- 35,242 22,412 Income from continuing operations before income taxes 1,862 776 Provision for income taxes 1,073 21 ------------- ------------- Net income $ 789 $ 755 ============= ============= Earnings per common share: Basic $ 0.10 $ 0.15 ============= ============= Diluted $ 0.10 $ 0.14 ============= ============= Shares used in computing per share amounts: Basic 7,739 4,991 Diluted 8,209 5,327

- MORE - PSYS Reports First-Quarter Results Page 6 May 6, 2003 PSYCHIATRIC SOLUTIONS, INC. CONDENSED CONSOLIDATED BALANCE SHEETS (IN THOUSANDS)

MARCH 31, DECEMBER 31, 2003 2002 ------------- ------------- (UNAUDITED) ASSETS Current assets: Cash $ 4,045 $ 2,392 Accounts receivable, net 22,137 19,473 Prepaids and other 2,832 2,219 ------------- ------------- Total current assets 29,014 24,084 Property and equipment, net 33,764 33,547 Cost in excess of net assets acquired 26,846 28,822 Contracts, net 3,558 607 Other assets 3,438 3,078 ------------- ------------- Total assets $ 96,620 $ 90,138 ============= ============= LIABILITIES AND STOCKHOLDERS' EQUITY Current liabilities: Accounts payable and accrued expenses $ 16,096 $ 14,645 Revolving line of credit 6,975 5,383 Current portion of long-term debt 2,554 1,687 ------------- ------------- Total current liabilities 25,625 21,715 Long-term debt, less current portion 36,657 36,752 Deferred taxes and other liabilities 3,447 1,122 ------------- ------------- Total liabilities 65,729 59,589 Total stockholders' equity 30,891 30,549 ------------- ------------- Total liabilities and stockholders' equity $ 96,620 $ 90,138 ============= =============

- END - -----END PRIVACY-ENHANCED MESSAGE-----

EX-99.1

                                                                    EXHIBIT 99.1


PSYCHIATRIC SOLUTIONS, INC.
[PSI LOGO]




CONTACT:
Brent Turner
Vice President, Treasurer and
Investor Relations
(615) 312-5700

          PSYCHIATRIC SOLUTIONS ANNOUNCES 60% GROWTH IN FIRST QUARTER
                    REVENUES; 140% GROWTH IN PRE-TAX INCOME

                                   ----------

                 REAFFIRMS EARNINGS GUIDANCE FOR FULL-YEAR 2003

Franklin, Tenn. (May 6, 2003) - Psychiatric Solutions, Inc. ("PSI") (Nasdaq:
PSYS) today announced financial results for the first quarter of 2003. Revenue
for the first quarter, which ended March 31, 2003, increased 60.0% to
$37,104,000 from $23,188,000 for the first quarter of 2002. EBITDA (earnings
before interest, taxes, depreciation, amortization and other non-cash items)
increased 68.5% for the first quarter to $4,453,000 from $2,643,000 for the
first quarter of 2002. Fully taxed adjusted net income for the quarter rose
176.4% to $1,288,000 from $466,000 for the first quarter last year. Fully taxed
adjusted earnings per diluted share increased 77.8% to $0.16 per diluted share
for the quarter from $0.09 for the first quarter of 2002.

         EBITDA and fully taxed adjusted net income for the first quarter of
2003 exclude the impact of both a non-cash loss of $960,000, or $0.12 per
diluted share, for a change in valuation of put warrants and a non-cash gain of
$461,000, or $0.06 per diluted share, for a change in reserve on stockholder
notes. These items were incurred because of the increase in PSI's stock price
during the first quarter of 2003 and, therefore lessen the comparability of
PSI's financial results to the first quarter of 2002. These items are not
expected to have any significant impact on future financial statements as the
Company has reached an agreement in principle for the exercise in full of the
warrants and the reserve on the stockholder notes has been substantially
relieved. Fully taxed adjusted net income for the first quarter of 2002 assumes
an income tax rate of 40.0%. Please see page 4 for a reconciliation of 1) EBITDA
with income from continuing operations before income taxes and 2) fully taxed
adjusted net income and adjusted earnings per diluted share with net income and
earnings per diluted share. Net income for the first quarter of 2003 was
$789,000, or $0.10 per diluted share, compared with $755,000, or $0.14 per
diluted share, for the first quarter of 2002.

         "We are pleased with PSI's substantial growth for the first quarter of
2003," commented Joey Jacobs, Chairman, President and Chief Executive Officer of
PSI. "We attribute the expansion in our revenues for the quarter both to the
addition of the Riveredge Hospital, which we acquired in July 2002 and to
organic growth within the other four inpatient psychiatric facilities we owned
and operated for the quarter. We expect our ability to expand revenue and
profits within our existing operations will continue to be a major contributor
to our long-term profitable growth. Our first-quarter results reflect the early
success of our strategies to achieve this goal, with first-quarter admissions
increasing 6.3% for our five owned facilities operating for this period,
compared with the


                                     -MORE-



PSYS Reports First-Quarter Results
Page 2
May 6, 2003


aggregate admissions of the five facilities for the first quarter of 2002, and
patient days increasing 7.5% on this same basis. Furthermore, our results for
the quarter also benefited from increased operating leverage produced by our
top-line growth, which drove an increase in our fully taxed adjusted net income
to 3.5% of revenue for the latest quarter from 2.0% for the first quarter of
2002.

         "In addition to the progress we are making in our organic growth
strategy, evident in our first quarter results, we have also produced
significant developments since the start of 2003 through our acquisition
strategy. As previously announced, we completed the acquisition of six
additional inpatient facilities in April 2003, which doubled the number of
inpatient beds we have in operation from our total at the end of the first
quarter. The six new facilities produced aggregate revenue of $76 million in
2002.

         "We also announced a definitive agreement during April 2003 for the
acquisition of Ramsay Youth Services, Inc. (Nasdaq: RYOU) in a transaction
valued at approximately $78 million. PSI and Ramsay continue to expect the
transaction to be completed by early July 2003. Completion is subject to
customary closing conditions, including receipt of regulatory approvals and
approval by Ramsay's stockholders. PSI is in the process of arranging financing
for the transaction and has received a "highly confident" letter from its senior
lender."

         Based on the assumption, among others, that the Ramsay transaction is
completed effective July 1, 2003, PSI today reaffirmed its earlier guidance for
fully taxed earnings per diluted share, excluding nonrecurring items, of $0.65
to $0.70 for 2003. This guidance includes the impact of the Company's $25
million Convertible Preferred Stock transaction, which will add approximately
4.5 million additional common stock equivalents to diluted shares outstanding
during 2003.

         Mr. Jacobs concluded, "We remain enthusiastic about the growth
opportunities we see in the inpatient behavioral health industry. We are
confident that through an unyielding commitment to providing the highest quality
services to our patients, we are well positioned to leverage these opportunities
to increase our share of the market, expand our revenue and profits and enhance
the value of PSI."

         PSI will hold a conference call to discuss this release today, at 10:00
a.m. Eastern time. Participants will have the opportunity to listen to the
conference call over the Internet by going to www.psysolutions.com and clicking
Investor Relations or by going to www.streetevents.com or
www.companyboardroom.com. Participants are encouraged to go to the selected web
sites at least 15 minutes early to register, download, and install any necessary
audio software. For those who cannot listen to the live broadcast, a replay will
be available at these sites shortly after the call through the end of business
on June 6, 2003.

         This press release contains forward-looking statements within the
meaning of the "safe harbor" provisions of the Private Securities Litigation
Reform Act of 1995. These forward-looking statements include statements other
than those made solely with respect to historical fact and are based on the
intent, belief or current expectations of PSI and its management. Such
forward-looking statements are not guarantees of future performance and involve
risks and uncertainties that may cause PSI's actual results to differ materially
from the results discussed in the forward-looking statements. Risks and
uncertainties that might cause such differences include, but are not limited to:
(1) the failure to



                                     -MORE-



PSYS Reports First-Quarter Results
Page 3
May 6, 2003


complete the acquisition of Ramsay; (2) potential competition which alters or
impedes PSI's acquisition strategy by decreasing PSI's ability to acquire
additional facilities on favorable terms; (3) the ability of PSI to improve the
operations of acquired facilities; (4) the ability to maintain favorable and
continuing relationships with physicians who use PSI's facilities; (5) the
limited operating history of PSI; (6) the ability to receive timely additional
financing on terms acceptable to PSI to fund PSI's acquisition strategy
(including for Ramsay) and capital expenditure needs; (7) risks inherent to the
healthcare industry, including the impact of unforeseen changes in regulation,
reimbursement rates from federal and state healthcare programs or managed care
companies and exposure to claims and legal actions by patients and others; and
(8) potential difficulties in integrating the operations of PSI with The Brown
Schools, Ramsay and other acquired operations. The forward-looking statements
herein are qualified in their entirety by the risk factors set forth in PSI's
filings with the Securities and Exchange Commission, including the factors
listed in its Annual Report on Form 10-K for the year ended December 31, 2002
under the caption "Risk Factors." PSI undertakes no obligation to update any
forward-looking statements, whether as a result of new information, future
events or otherwise. Readers should not place undue reliance on forward-looking
statements, which reflect management's views only as of the date hereof.

         Psychiatric Solutions, Inc. offers an extensive continuum of behavioral
health programs to critically ill children, adolescents and adults through its
ownership and operation of freestanding psychiatric inpatient facilities and its
management of psychiatric units within general acute care hospitals. PSI
currently owns and operates 11 freestanding inpatient facilities and manages 48
psychiatric units.



                                     -MORE-


PSYS Reports First-Quarter Results
Page 4
May 6, 2003

                          PSYCHIATRIC SOLUTIONS, INC.
                         UNAUDITED FINANCIAL HIGHLIGHTS
                    (IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)




                                                                THREE MONTHS ENDED
                                                                   MARCH 31,
                                                          ------------------------------
                                                               2003             2002
                                                          -------------    -------------
                                                                     
Revenue                                                   $      37,104    $      23,188
Income from continuing operations before income taxes             1,862              776

Net income                                                $         789    $         755
Plus reconciling items:
  Change in valuation of put warrants                               960               --
  Change in reserve on stockholder notes                           (461)              --
  Additional provision for income taxes to total 40.0%               --             (289)
                                                          -------------    -------------
Adjusted net income                                       $       1,288    $         466
                                                          =============    =============

Earnings per diluted share                                $        0.10    $        0.14
                                                          =============    =============
Adjusted earnings per diluted share                       $        0.16    $        0.09
                                                          =============    =============
Diluted shares used in computing per share amounts:               8,209            5,327

EBITDA (a):
Income from continuing operations before income taxes     $       1,862    $         776
Interest                                                          1,420            1,372
Depreciation and amortization                                       667              386
Non-cash stock compensation                                           5              109
Change in valuation of put warrants                                 960               --
Change in reserve on stockholder notes                             (461)              --
                                                          -------------    -------------
EBITDA                                                    $       4,453    $       2,643
                                                          =============    =============



(a) EBITDA is commonly used as an analytical indicator within the health care
industry and also serves as a measure of leverage capacity and debt service
ability. EBITDA should not be considered as a measure of financial performance
under generally accepted accounting principles, and the items excluded from
EBITDA are significant components in understanding and assessing financial
performance. Because EBITDA is not a measurement determined in accordance with
generally accepted accounting principles and is thus susceptible to varying
calculations, EBITDA as presented may not be comparable to other similarly
titled measures of other companies.




                                     -MORE-



PSYS Reports First-Quarter Results
Page 5
May 6, 2003


                           PSYCHIATRIC SOLUTIONS, INC.
                 CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
             (UNAUDITED, IN THOUSANDS EXCEPT FOR PER SHARE AMOUNTS)




                                                  THREE MONTHS ENDED MARCH 31,
                                                 ------------------------------
                                                      2003             2002
                                                 -------------    -------------
                                                            
Revenue                                          $      37,104    $      23,188

Salaries, wages and employee benefits                   17,785           13,970
Professional fees                                        4,451            3,108
Supplies                                                 1,691            1,099
Rentals and leases                                         248              190
Other operating expenses                                 7,159            1,572
Provision for bad debts                                  1,322              715
Depreciation and amortization                              667              386
Interest expense                                         1,420            1,372
Change in valuation of put warrants                        960               --
Change in reserve on stockholder notes                    (461)              --
                                                 -------------    -------------
                                                        35,242           22,412
Income from continuing operations before
  income taxes                                           1,862              776
Provision for income taxes                               1,073               21
                                                 -------------    -------------
Net income                                       $         789    $         755
                                                 =============    =============

Earnings per common share:
  Basic                                          $        0.10    $        0.15
                                                 =============    =============
  Diluted                                        $        0.10    $        0.14
                                                 =============    =============
Shares used in computing per share amounts:
  Basic                                                  7,739            4,991
  Diluted                                                8,209            5,327







                                    - MORE -







PSYS Reports First-Quarter Results
Page 6
May 6, 2003


                           PSYCHIATRIC SOLUTIONS, INC.
                      CONDENSED CONSOLIDATED BALANCE SHEETS
                                 (IN THOUSANDS)




                                                                 MARCH 31,      DECEMBER 31,
                                                                   2003            2002
                                                               -------------   -------------
                                                                (UNAUDITED)
                                                                         
                                     ASSETS
Current assets:
  Cash                                                         $       4,045   $       2,392
  Accounts receivable, net                                            22,137          19,473
  Prepaids and other                                                   2,832           2,219
                                                               -------------   -------------
Total current assets                                                  29,014          24,084
Property and equipment, net                                           33,764          33,547
Cost in excess of net assets acquired                                 26,846          28,822
Contracts, net                                                         3,558             607
Other assets                                                           3,438           3,078
                                                               -------------   -------------
Total assets                                                   $      96,620   $      90,138
                                                               =============   =============

                      LIABILITIES AND STOCKHOLDERS' EQUITY

Current liabilities:
  Accounts payable and accrued expenses                        $      16,096   $      14,645
  Revolving line of credit                                             6,975           5,383
  Current portion of long-term debt                                    2,554           1,687
                                                               -------------   -------------
Total current liabilities                                             25,625          21,715
Long-term debt, less current portion                                  36,657          36,752
Deferred taxes and other liabilities                                   3,447           1,122
                                                               -------------   -------------
Total liabilities                                                     65,729          59,589

Total stockholders' equity                                            30,891          30,549
                                                               -------------   -------------
Total liabilities and stockholders' equity                     $      96,620   $      90,138
                                                               =============   =============








                                     - END -