FRANKLIN, Tenn.--(BUSINESS WIRE)--

Acadia Healthcare Company, Inc. (NASDAQ: ACHC) today announced financial results for the fourth quarter and year ended December 31, 2022.

Fourth Quarter Highlights

• Revenue totaled $675.3 million, an increase of 13.8% over the fourth quarter of 2021
• Same facility revenue increased 9.4% compared to the fourth quarter of 2021, including an increase in revenue per patient day of 5.2% and an increase in patient days of 4.0%
• Net income attributable to Acadia totaled $61.1 million, or $0.67 per diluted share, and adjusted income from continuing operations attributable to Acadia stockholders totaled $68.1 million, or $0.74 per diluted share, which included $0.04 of income from the Provider Relief Fund (“PRF”) established under the Coronavirus Aid, Relief, and Economic Security (“CARES”) Act
• Adjusted EBITDA totaled $150.9 million, which included $5.2 million of income from the PRF established under the CARES Act
• Recorded a $5.9 million unfavorable adjustment to professional and general liability reserves relating to the settlement or expected settlement of certain prior year claims relating primarily to the 2017 to 2018 period
• Opened a joint venture facility with Lutheran Health Network, in Ft. Wayne, Indiana, and added seven new Comprehensive Treatment Centers (“CTCs”) through acquiring four existing facilities and opening three de novos

Fourth Quarter Results

The Company reported revenue of $675.3 million for the fourth quarter of 2022, compared with $593.5 million for the fourth quarter of 2021. Adjusted EBITDA was $150.9 million for the fourth quarter of 2022, compared with $156.1 million for the same period last year.

During the fourth quarter of 2022, the Company recorded $5.2 million of income from the PRF related to the American Rescue Plan (“ARP”) Rural Payments. The Company will continue to review the remaining $9.0 million of ARP funds held on its balance sheet as of December 31, 2022, for potential repayment of the remaining balance.

The Company also recorded an unfavorable adjustment of $5.9 million, or $0.05 per diluted share, to its professional and general liability reserves relating to the settlement or expected settlement of certain prior year claims relating primarily to the 2017 to 2018 period. The estimated accrual for professional and general liabilities is based on historical claims, prior settlements and judgments, demographic factors, industry trends, severity factors, and other actuarial assumptions.

Net income attributable to Acadia stockholders for the fourth quarter of 2022 was $61.1 million, or $0.67 per diluted share. Adjusted income from continuing operations attributable to Acadia stockholders was $0.74 per diluted share for the fourth quarter of 2022. Adjustments to income include transaction-related expenses and the income tax effect of adjustments to income. A reconciliation of all non-GAAP financial results in this press release begins on page 10.

For the fourth quarter of 2022, Acadia’s same facility revenue increased 9.4% compared with the fourth quarter of 2021, including an increase in revenue per patient day of 5.2% and an increase in patient days of 4.0%.

Chris Hunter, Chief Executive Officer of Acadia Healthcare Company, remarked, “Acadia delivered another quarter and year of strong growth. These results reflect the robust demand for our behavioral healthcare services, the dedicated work of our extraordinary employees and our proven ability to meet this critical societal need. With solid execution across the key pathways of our growth strategy, we extended our market reach in 2022 and solidified our industry leadership position. Our committed team of employees and clinicians across our operations have continued to tirelessly provide quality patient care for those seeking treatment for mental health and substance use issues.

Strategic Investments for Long-Term Growth

“During the fourth quarter of 2022, we made further progress in meeting our growth objectives across each of our service lines. As demand for our services continues to grow, we have made the necessary investments in our operations to support sustained long-term growth. We believe our five distinct growth pathways will enable the Company to meet this demand and extend our market reach.

“Our first pathway, facility expansions, remains a primary driver of our growth, as this pathway allows us to efficiently expand services in established markets by utilizing our existing infrastructure and experienced staff. We added 80 beds to our existing facilities during the fourth quarter, finishing the year with a strong second half of 212 bed additions and bringing our total number to 290 for the year. Looking ahead, we expect to add approximately 300 beds through facility expansions in 2023.

“A second important growth pathway is to identify underserved markets for behavioral healthcare services and develop wholly owned de novo facilities that bridge this gap and help meet the critical community need. In July 2022, we opened a 60-bed children’s hospital as the first stage of our Montrose Behavioral Health Hospital operations in Chicago. We expect to complete this project and begin operations at our 101-bed adult hospital and the outpatient facility in late 2023 once renovations are complete. In addition to the new Chicago facilities, we expect to open our de novo facility, Coachella Valley Behavioral Health, in Indio, California, later this year. We will continue to pursue additional opportunities across the country with a goal to develop and open acute and specialty facilities in 2024.

“We also continued to expand our network of CTCs, specifically designed to meet the growing and critical need for addiction treatment, especially for patients dealing with opioid use disorder. During the fourth quarter, we opened three new CTCs in Florida and Delaware, bringing our total to seven new CTCs for the year. As the opioid crisis has continued to escalate across the country, we believe Acadia’s CTC facilities and programs play a vital role in the communities they serve. We will continue to expand our CTC network and service offerings to meet this essential need with an objective of adding at least six CTCs in the year ahead.”

Hunter added, “Forming strategic partnerships is a third attractive growth pathway for Acadia. We have been fortunate to establish strong relationships with leading healthcare providers and premier healthcare systems across the country who want to expand behavioral healthcare treatment options in their respective communities. We bring the clinical expertise and experience they need to deliver high quality care, while we have an opportunity to leverage the providers’ market presence and established relationships in their communities. During the third quarter, we opened a new 90-bed facility with our joint venture partner, Covenant Health, in Knoxville, Tennessee. During the fourth quarter, we opened our ninth joint venture facility, a 120-bed hospital known as Maple Heights Behavioral Health, with our partner, Lutheran Health Network, in Ft. Wayne, Indiana. Acadia has joint venture partnerships for 19 facilities with 10 facilities expected to open over the next several years, including two in 2023.

“For our fourth pathway, we have a very disciplined focus on M&A opportunities and continue to look for selective acquisitions that complement our growth strategy and are incremental to our financial objectives. During the fourth quarter of 2022, we acquired four CTCs from Georgia-based Brand New Start Treatment Centers, located in separate suburbs of the Atlanta metropolitan area, extending Acadia’s CTC network to 151 locations. We remain focused on identifying attractive M&A opportunities that are complementary to our existing geographic footprint and portfolio of service offerings. We are fortunate to have a strong balance sheet that provides the flexibility to pursue acquisitions as well as make the necessary investments to support our other strategic growth pathways.

“For the fifth growth pathway, we remain focused on extending the continuum of care across our facilities and identifying additional ways to support patients. During the fourth quarter of 2022, we expanded our network of step-down programs by adding Intensive Outpatient Programs (IOP) across several of the communities that we serve. To further support our growth objectives, we also continued to implement our strategy of improving cross-referral opportunities between our facilities by launching the program to several strategically identified regions,” added Hunter.

Cash and Liquidity

Maintaining a strong financial position will continue to be a top priority for Acadia in 2023. As of December 31, 2022, the Company had $97.6 million in cash and cash equivalents and $525 million available under its $600 million revolving credit facility with a net leverage ratio of approximately 2.1x.

During the fourth quarter, the Company completed its repayment of amounts received pursuant to the Medicare Accelerated and Advanced Payment Program under the CARES Act. Of the $45.2 million of advanced payments received in 2020, the Company repaid a total of $25.1 million in 2021 and paid the remaining balance of $20.1 million in 2022, including $1.2 million in the fourth quarter of 2022.

Looking Ahead

“We are proud of our results for 2022, and even more proud of our vitally important work to support expanding patient populations in order to make a positive difference in more communities. Acadia has created a strong foundation to build upon during a time of unprecedented demand for behavioral healthcare services. We also see a growing recognition among providers that behavioral health issues are integral to overall patient health. A 2022 study from Indiana University found that approximately 45 percent of patients who visit the emergency department for physical injuries and ailments also have mental health and substance use problems that are frequently overlooked. Acadia has established strong relationships with a growing number of med-surg hospitals across the country, bringing our experience and expertise to markets where they are desperately needed. Fortunately, greater societal awareness of these issues and broader acceptance of treatment have made behavioral healthcare a priority with medical professionals and government healthcare officials. Acadia is well positioned to address this critical need as a leader in providing behavioral healthcare services across the care continuum.

“As we look to the year ahead, we are focused on increasing our pace of growth and capitalizing on expansion opportunities across our service lines. At the same time, we will be enhancing the delivery of care we provide and strengthening our capabilities through our investments in people, processes and technology. Across our network of 250 facilities, we have a shared mission to provide high quality, differentiated behavioral healthcare services, and we look forward to the opportunities ahead for Acadia in 2023 and beyond,” concluded Hunter.

Financial Guidance

Acadia today narrowed its previously announced financial guidance for 2023, as follows:

Acadia also established financial guidance for the first quarter of 2023, as follows:

The Company’s guidance does not include the impact of any future acquisitions, divestitures, transaction-related expenses or recognition of additional income from the CARES Act.

Conference Call

Acadia will hold a conference call to discuss its fourth quarter financial results at 8:00 a.m. Eastern Time on February 28, 2023. A live webcast of the conference call will be available at in the “Investors” section of the website. The webcast of the conference call will be available for 30 days.

About Acadia

Acadia is a leading provider of behavioral healthcare services across the United States. As of December 31, 2022, Acadia operated a network of 250 behavioral healthcare facilities with approximately 11,000 beds in 39 states and Puerto Rico. With approximately 23,000 employees serving more than 75,000 patients daily, Acadia is the largest stand-alone behavioral healthcare company in the U.S. Acadia provides behavioral healthcare services to its patients in a variety of settings, including inpatient psychiatric hospitals, specialty treatment facilities, residential treatment centers and outpatient clinics.

Forward-Looking Information

This press release contains forward-looking statements. Generally, words such as “may,” “will,” “should,” “could,” “anticipate,” “expect,” “intend,” “estimate,” “plan,” “continue,” and “believe” or the negative of or other variation on these and other similar expressions identify forward-looking statements. These forward-looking statements are made only as of the date of this press release. We do not undertake to update or revise the forward-looking statements, whether as a result of new information, future events or otherwise. Forward-looking statements are based on current expectations and involve risks and uncertainties and our future results could differ significantly from those expressed or implied by our forward-looking statements. Factors that may cause actual results to differ materially include, without limitation, (i) potential difficulties in successfully integrating the operations of acquired facilities or realizing the expected benefits and synergies of our facility expansions, acquisitions, joint ventures and de novo transactions; (ii) Acadia’s ability to add beds, expand services, enhance marketing programs and improve efficiencies at its facilities; (iii) potential reductions in payments received by Acadia from government and commercial payors; (iv) the occurrence of patient incidents, governmental investigations, litigation and adverse regulatory actions, which could adversely affect the price of our common stock and result in substantial payments and incremental regulatory burdens; (v) the risk that Acadia may not generate sufficient cash from operations to service its debt and meet its working capital and capital expenditure requirements; (vi) potential disruptions to our information technology systems or a cybersecurity incident; and (vii) potential operating difficulties, including, without limitation, disruption to the U.S. economy and financial markets; reduced admissions and patient volumes; increased costs relating to labor, supply chain and other expenditures; changes in competition and client preferences; and general economic or industry conditions that may prevent Acadia from realizing the expected benefits of its business strategies. These factors and others are more fully described in Acadia’s periodic reports and other filings with the SEC.

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