Acadia Healthcare Company (ACHC) Q4 2016 earnings summary

Executive summary

• 2016 growth was driven mainly by the Priory acquisition, organic bed expansion and higher same-facility patient volumes; year-end network reached 573 facilities and ~17,100 beds.

• Revenue rose 56.6% to $2.81B and adjusted EBITDA rose 50.3% to $608.6M, while GAAP net income attributable to stockholders fell to $6.1M, primarily reflecting a large divestiture loss.

Financial highlights

• Revenue was $2,810.9M in 2016 vs. $1,794.5M in 2015; same-facility revenue increased 7.4%.

• Net income attributable to stockholders was $6.1M, or $0.07 diluted EPS, vs. $112.6M, or $1.64, in 2015.

• Adjusted income from continuing operations was $210.2M, or $2.45 diluted EPS, vs. $152.8M, or $2.23, in 2015.

• Adjusted EBITDA was $608.6M vs. $404.8M; net cash from continuing operating activities increased 53.5% to $371.7M.

Outlook and guidance

• Plans call for >800 beds in 2017, including additions at existing facilities and two de novo facilities scheduled to open in H2.

• Expected Priory run-rate cost synergies were $20M; ~half had been achieved by year-end 2016, with the full run rate expected during 2017.

• Operating cash flow is expected to fund maintenance capital needs and new-bed additions; 2017 acquisition focus is the U.S., particularly acute inpatient, specialty treatment and comprehensive treatment centers.