Acadia Healthcare Company (ACHC) Q4 2015 earnings summary

Executive summary

• 2015 expanded to 258 facilities and ~9,900 beds across 39 states, the U.K. and Puerto Rico; revenue reached $1.79B, up 78.6% YoY.

• Five-year CAGRs were 96.0% for revenue, 87.0% for adjusted continuing income attributable to stockholders and 42.5% for adjusted EPS.

• Priory closed Feb. 16, 2016, lifting the network to 585 facilities and ~17,100 beds; the acquisition expanded U.K. scale and behavioral-health reach.

Financial highlights

• FY15 revenue was $1,794.5M vs. $1,004.6M in FY14; adjusted EBITDA rose 87.9% to $404.8M from $215.5M.

• Adjusted continuing income attributable to stockholders increased 79.7% to $152.8M; adjusted diluted EPS rose 44.8% to $2.23 from $1.54.

• GAAP net income attributable to stockholders was $112.6M vs. $83.0M; diluted EPS was $1.64 vs. $1.50.

• Continuing operating cash flow more than doubled to $242.1M from $115.5M; FY15 cash and cash equivalents ended at $11.2M.

• Revenue before doubtful-account provisions rose 77.5%; the provision was $35.1M, or 1.9% of pre-provision revenue, vs. $26.2M, or 2.5%, in FY14.

Outlook and guidance

• FY16 plan: add ~800 beds excluding acquisitions, self-fund maintenance capex and bed additions, and target year-end leverage of ~5.0x vs. 5.4x after Priory.

• Q4 2015 annualized revenue run rate was $2.0B; management targeted a $4.0B run rate by end-2018.

• Growth priorities include organic bed expansion, facility margin improvement, broader services and selective U.S. and U.K. acquisitions.