Acadia Healthcare Company (ACHC) Q4 2011 earnings summary

Executive summary

• 2011 expansion through YFCS and PHC acquisitions grew the network from 6 facilities and ~400 beds at year-end 2010 to 29 facilities and ~2,000 beds at year-end 2011; 3 more facilities with 166 beds were acquired in March 2012.

• Revenue reached $221.4 million; adjusted income from continuing operations was $11.7 million, while reported continuing-operations loss was $32.9 million, reflecting $57.7 million of primarily acquisition-related pretax costs.

Financial highlights

• FY 2011 revenue was $221.4 million versus $62.1 million in 2010; acquisitions contributed $152.6 million of the increase, while same-facility revenue before doubtful-account provision grew 12.0%.

• Adjusted EBITDA was $53.7 million; adjusted income from continuing operations was $11.7 million, or $0.52 per diluted share.

• Reported continuing-operations loss was $32.9 million, or $1.75 per diluted share; net loss was $34.9 million, or $1.86 per diluted share.

• FY 2011 transaction-related expenses were $41.5 million and equity-based compensation expense was $17.3 million; the transaction costs included a $20.6 million sponsor termination fee.

• Q4 revenue was $77.0 million; quarterly continuing-operations pretax loss was $23.4 million, including $31.0 million of primarily PHC-related transaction expenses.

Outlook and guidance

• FY 2012 diluted EPS guidance was $0.65–$0.67, implying 25.0%–28.8% growth from FY 2011 adjusted continuing-operations income per diluted share; guidance includes the March 2012 acquisition but excludes future acquisitions.

• FY 2012 operating cash flow was expected at $27–$30 million against planned maintenance capital expenditures of $6–$8 million.

• Growth strategy targets a $1 billion annualized revenue run-rate within 3 years and same-facility EBITDA margin above 20% over time.

• Bed strategy aims for a near-even split between acute and residential treatment beds by end-2013; residential beds were below 70% of total beds at end-Q1 2012.