Acadia Healthcare Company (ACHC) Q4 2018 earnings summary

Executive summary

• 2018 revenue rose 6.2% to $3.01B, but attributable net loss was $175.8M, driven mainly by a $337.9M non-cash impairment charge and legal settlements.

• U.S. operations grew steadily; U.K. staffing shortages, higher agency labor costs and lower census pressured margins.

• Growth plans center on organic bed expansion, acquisitions and hospital partnerships; approximately 700 beds are expected in 2019, excluding acquisitions.

Financial highlights

• Revenue was $3.012B versus $2.836B in 2017; same-facility revenue grew 5.2%.

• Attributable net loss was $175.8M versus net income of $199.8M; diluted EPS was $(2.01) versus $2.30.

• Adjusted net income was $195.4M and adjusted diluted EPS was $2.24; Adjusted EBITDA was $593.6M versus $604.4M.

• Operating cash flow from continuing operations rose to $416.6M from $401.3M.

• Non-recurring charges included $337.9M of U.K. impairment, $22.1M of legal settlements and $14.0M of CEO-transition costs.

Outlook and guidance

• Expected 2019 bed additions are approximately 700, excluding acquisitions, through existing-site expansions and new facilities.

• Mount Carmel and Rio Vista, each 80 beds, opened in February 2019; a 76-bed Saint Thomas Health joint-venture hospital was planned, with construction expected to begin summer 2019.

• Continued U.K. nursing and clinical staffing constraints are expected to challenge operations; management is focused on operational improvements.

• NHS England’s Long Term Plan targets at least £2.3B annually for mental health by 2023/24, while funding and commissioning changes remain uncertain.