Acadia Healthcare (ACHC) 8-K Acadia Healthcare Third Quarter Adjusted EPS Increases 34.8% to $0.62 on Revenue of $479.7 Million

Exhibit 99

Acadia Healthcare Third Quarter Adjusted EPS Increases 34.8% to $0.62 on Revenue of $479.7 Million

Announces Two U.S. and Two U.K. Acquisitions

Increases Guidance for 2015 Adjusted Earnings per Diluted Share to New Range of $2.20 to $2.22

FRANKLIN, Tenn.--(BUSINESS WIRE)--November 3, 2015--Acadia Healthcare Company, Inc. (NASDAQ: ACHC) today announced financial results for the third quarter and nine months ended September 30, 2015. For the quarter, revenue was $479.7 million, a 62.9% increase from $294.5 million for the third quarter of 2014. Income from continuing operations attributable to Acadia stockholders was $29.5 million, or $0.42 per diluted share, for the third quarter of 2015 compared with $25.5 million, or $0.43 per diluted share, for the third quarter of 2014. Adjusted income from continuing operations attributable to Acadia stockholders increased 61.0% to $43.9 million for the third quarter of 2015 from $27.3 million for the third quarter of 2014, while adjusted income from continuing operations per diluted share attributable to Acadia stockholders increased 34.8% to $0.62 from $0.46. Weighted average diluted shares outstanding increased 19.7% for the third quarter of 2015 from the third quarter of 2014, primarily due to the issuance of common stock in February and May 2015, the net proceeds of which have primarily been used to fund acquisitions. A reconciliation of all non-GAAP financial results in this release appears on pages 8 and 9.

For the first nine months of 2015, revenue was $1.3 billion, an increase of 83.1% from $709.7 million for the first nine months of 2014. Income from continuing operations attributable to Acadia stockholders for the first nine months of 2015 was $77.9 million, or $1.15 per diluted share, compared with $60.9 million, or $1.13 per diluted share, for the same period in 2014. Adjusted income from continuing operations attributable to Acadia stockholders increased 90.9% to $110.5 million for the first nine months of 2015 from $57.9 million for the first nine months of 2014, while adjusted income from continuing operations per diluted share attributable to Acadia stockholders increased 53.3% to $1.64 from $1.07. Weighted average shares outstanding increased 25.3% for the first nine months of 2015 compared with the same period in 2014.

“We are very pleased with Acadia’s third quarter operating and financial performance,” said Joey Jacobs, Chairman and Chief Executive Officer of Acadia. “Our strong profitable growth for the quarter reflects the continued successful implementation of our organic growth and acquisition strategies, both in the United States and the United Kingdom.”

During the third quarter, Acadia completed five acquisitions, comprised of eight inpatient facilities with an aggregate of over 300 beds. These transactions increased total acquisition activity over the 12 months ended September 30, 2015, to 14 transactions for 66 inpatient facilities with approximately 3,300 beds and 88 comprehensive treatment centers (CTCs).

The Company is also pleased to announce the completion of four acquisitions thus far in the fourth quarter, including:

• Discovery House, which operates 19 CTCs in Rhode Island, Pennsylvania, Maine and Utah;
• Duffy’s Napa Valley Rehab, a 61-bed addiction treatment facility in Calistoga, California;
• Meadow View, a 28-bed behavioral healthcare facility in Lincolnshire; and
• Cleveland House, a 32-bed behavioral healthcare facility in Southport.

Mr. Jacobs added, “We welcome the staffs of these outstanding facilities to Acadia, and we look forward to helping them expand to better serve their communities. We expect these four transactions, which, in aggregate are expected to produce full-year 2015 revenues of more than $50 million, to be accretive to our financial results for the fourth quarter of 2015 and beyond.”

Acadia’s third quarter results also reflected significant organic growth, primarily from the addition of approximately 630 new beds, including 420 to existing facilities and 210 in two de novo facilities opened during the 12 months ended September 30, 2015. During the third quarter, Acadia added 270 new beds, including 150 to existing facilities and 120 in a de novo facility opened through a joint venture.

Same facility revenue growth for the third quarter was 6.5%, with a 6.8% increase in patient days and a 0.2% decline in revenue per patient day. New beds added to the same facility base over the previous 12 months, as well as Acadia’s continuing initiatives to build revenue at each facility, contributed to this growth. Consolidated same facility EBITDA margin increased 40 basis points to 25.7%. These results contributed to a 66.7% increase in Acadia’s consolidated adjusted EBITDA for the third quarter to $108.5 million, which is 22.6% of revenue, up 50 basis points from the third quarter last year.

Mr. Jacobs concluded, “We believe Acadia is well positioned to continue executing its acquisition and organic growth strategies, with $50.8 million in cash and cash equivalents at the end of the third quarter and $53.0 million of cash flow from continuing operations for the quarter. In addition, after completing the acquisitions announced today, we continue to have significant availability under our $300 million revolving credit facility.”

Acadia today increased its guidance for 2015 adjusted earnings per diluted share to a range of $2.20 to $2.22 from the previous range of $2.15 to $2.18. The Company’s guidance does not include the impact of any future acquisitions or transaction-related expenses.

Acadia will hold a conference call to discuss its third quarter financial results at 9:00 a.m. Eastern Time on Wednesday, November 4, 2015. A live webcast of the conference call will be available at www.acadiahealthcare.com in the “Investors” section of the website. The webcast of the conference call will be available through November 19, 2015.

Risk Factors

This news 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 news 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) Acadia’s ability to complete acquisitions and successfully integrate the operations of acquired facilities, including CRC facilities; (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 third-party payors; (iv) the occurrence of patient incidents, which could adversely affect the price of our common stock and result in incremental regulatory burdens and governmental investigations; (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; and (vi) potential operating difficulties, client preferences, changes in competition and general economic or industry conditions that may prevent Acadia from realizing the expected benefits of its business strategy. These factors and others are more fully described in Acadia’s periodic reports and other filings with the SEC.

About Acadia

Acadia is a provider of inpatient behavioral healthcare services. Acadia operates a network of 256 behavioral healthcare facilities with more than 9,700 beds in 39 states, the United Kingdom and Puerto Rico. Acadia provides psychiatric and chemical dependency services to its patients in a variety of settings, including inpatient psychiatric hospitals, residential treatment centers, outpatient clinics and therapeutic school-based programs.

Acadia Healthcare Company, Inc.
Condensed Consolidated Statements of Income
(Unaudited)
	Three Months Ended September 30,						Nine Months Ended September 30,
	2015			2014			2015			2014
	(In thousands, except per share amounts)
Revenue before provision for doubtful accounts	$	488,746		$	303,001		$	1,324,702		$	729,784
Provision for doubtful accounts		(9,016	)		(8,522	)		(25,529	)		(20,084	)
Revenue		479,730			294,479			1,299,173			709,700
Salaries, wages and benefits (including equity-based compensation expense of $5,327, $2,805, $14,576 and $6,975, respectively)		258,410			168,632			707,583			408,680
Professional fees		30,759			14,878			83,215			36,151
Supplies		21,634			14,062			58,430			34,722
Rents and leases		8,542			3,214			22,639			8,872
Other operating expenses		57,244			31,432			148,899			79,188
Depreciation and amortization		16,890			10,325			44,920			21,696
Interest expense, net		27,737			14,068			77,932			33,505
Debt extinguishment costs		9,979			-			9,979			-
Loss (gain) on foreign currency derivatives		1,018			(1,527	)		1,926			(15,262	)
Transaction-related expenses		5,842			6,239			31,415			10,834
Total expenses		438,055			261,323			1,186,938			618,386
Income from continuing operations before income taxes		41,675			33,156			112,235			91,314
Provision for income taxes		12,669			7,703			34,794			30,383
Income from continuing operations		29,006			25,453			77,441			60,931
Income (loss) from discontinuing operations, net of income taxes		80			(51	)		83			(20	)
Net income		29,086			25,402			77,524			60,911
Net loss attributable to noncontrolling interests		464			-			464			-
Net income attributable to Acadia Healthcare Company, Inc.	$	29,550		$	25,402		$	77,988		$	60,911
Basic earnings attributable to Acadia Healthcare Company, Inc. stockholders:
Income from continuing operations	$	0.42		$	0.43		$	1.16		$	1.14
Income (loss) from discontinuing operations		-			-			-			-
Net income	$	0.42		$	0.43		$	1.16		$	1.14
Diluted earnings attributable to Acadia Healthcare Company, Inc. stockholders:
Income from continuing operations	$	0.42		$	0.43		$	1.15		$	1.13
Income (loss) from discontinuing operations		-			-			-			-
Net income	$	0.42		$	0.43		$	1.15		$	1.13
Weighted-average shares outstanding:
Basic		70,664			59,175			67,194			53,670
Diluted		71,110			59,409			67,539			53,922

Acadia Healthcare Company, Inc.
Condensed Consolidated Balance Sheets
(Unaudited)
	September 30,			December 31,
	2015			2014
	(In thousands)
ASSETS
Current assets:
Cash and cash equivalents	$	50,762		$	94,040
Accounts receivable, net of allowance for doubtful accounts of $27,378 and $22,449, respectively		214,883			118,378
Deferred tax assets		37,291			20,155
Other current assets		75,335			41,570
Total current assets		378,271			274,143
Property and equipment, net		1,624,166			1,069,700
Goodwill		1,981,140			802,986
Intangible assets, net		58,976			21,636
Deferred tax assets - noncurrent		33,278			13,141
Other assets		69,408			41,984
Total assets	$	4,145,239		$	2,223,590
LIABILITIES AND EQUITY
Current liabilities:
Current portion of long-term debt	$	41,996		$	26,965
Accounts payable		78,384			48,696
Accrued salaries and benefits		87,110			59,317
Other accrued liabilities		56,962			30,956
Total current liabilities		264,452			165,934
Long-term debt		2,092,317			1,069,305
Deferred tax liabilities - noncurrent		22,210			63,880
Other liabilities		87,008			43,506
Total liabilities		2,465,987			1,342,625
Redeemable noncontrolling interests		8,700			-
Equity:
Common stock		707			592
Additional paid-in capital		1,574,708			847,301
Accumulated other comprehensive loss		(84,293	)		(68,370	)
Retained earnings		179,430			101,442
Total equity		1,670,552			880,965
Total liabilities and equity	$	4,145,239		$	2,223,590

Acadia Healthcare Company, Inc.
Condensed Consolidated Statements of Cash Flows
(Unaudited)
	Nine Months Ended September 30,
	2015			2014
	(In thousands)
Operating activities:
Net income	$	77,524		$	60,911
Adjustments to reconcile net income to net cash provided by continuing operating activities:
Depreciation and amortization		44,920			21,696
Amortization of debt issuance costs		5,017			2,229
Equity-based compensation expense		14,576			6,975
Deferred income tax expense		28,925			4,645
(Income) loss from discontinued operations, net of taxes		(83	)		20
Debt extinguishment costs		9,979			-
Loss (gain) on foreign currency derivatives		1,926			(15,262	)
Other		1,122			163
Change in operating assets and liabilities, net of effect of acquisitions:
Accounts receivable, net		(28,905	)		(25,395	)
Other current assets		(12,201	)		1,322
Other assets		(4,879	)		(2,086	)
Accounts payable and other accrued liabilities		(8,316	)		1,078
Accrued salaries and benefits		8,888			8,972
Other liabilities		5,071			3,805
Net cash provided by continuing operating activities		143,564			69,073
Net cash used in discontinued operating activities		(1,479	)		(27	)
Net cash provided by operating activities		142,085			69,046
Investing activities:
Cash paid for acquisitions, net of cash acquired		(391,216	)		(722,797	)
Cash paid for capital expenditures		(200,841	)		(70,680	)
Cash paid for real estate acquisitions		(21,976	)		(22,247	)
Settlement of foreign currency derivatives		(1,926	)		15,262
Other		(887	)		(733	)
Net cash used in investing activities		(616,846	)		(801,195	)
Financing activities:
Borrowings on long-term debt		1,150,000			307,500
Borrowings on revolving credit facility		310,000			230,500
Principal payments on revolving credit facility		(310,000	)		(120,000	)
Principal payments on long-term debt		(23,813	)		(5,625	)
Repayment of assumed CRC debt		(904,467	)		-
Repayment of senior notes		(88,331	)		-
Payment of debt issuance costs		(25,584	)		(10,909	)
Payment of premium on senior notes		(6,890	)		-
Issuance of common stock, net		331,360			374,431
Common stock withheld for minimum statutory taxes, net		(7,582	)		(3,477	)
Excess tax benefit from equity awards		8,020			3,779
Cash paid for contingent consideration		-			(5,000	)
Other		(374	)		-
Net cash provided by financing activities		432,339			771,199
Effect of exchange rate changes on cash		(856	)		(1,440	)
Net (decrease) increase in cash and cash equivalents		(43,278	)		37,610
Cash and cash equivalents at beginning of the period		94,040			4,569
Cash and cash equivalents at end of the period	$	50,762		$	42,179
Effect of acquisitions:
Assets acquired, excluding cash	$	1,793,139		$	802,767
Liabilities assumed		(1,012,549	)		(78,003	)
Issuance of common stock in connection with acquisition		(380,210	)		-
Prior year deposits paid for acquisitions		-			(500	)
Redeemable noncontrolling interest resulting from an acquisition		(9,164	)		-
Contingent consideration issued in connection with acquisition		-			(1,467	)
Cash paid for acquisitions, net of cash acquired	$	391,216		$	722,797

Acadia Healthcare Company, Inc.
Operating Statistics
(Unaudited, Revenue in thousands)
	Three Months Ended September 30,								Nine Months Ended September 30,
	2015			2014			% Change		2015			2014			% Change
Same Facility Results (a,c)
Revenue	$	304,230		$	285,545		6.5	%	$	748,377		$	692,727		8.0	%
Patient Days		448,307			419,849		6.8	%		1,104,016			1,021,945		8.0	%
Admissions		22,497			19,816		13.5	%		64,579			55,644		16.1	%
Average Length of Stay (b)		19.9			21.2		-5.9	%		17.1			18.4		-6.9	%
Revenue per Patient Day	$	679		$	680		-0.2	%	$	678		$	678		0.0	%
EBITDA margin		25.7	%		25.3	%	40 bps			25.5	%		24.7	%	80 bps
U.S. Same Facility Results (a)
Revenue	$	227,728		$	215,006		5.9	%	$	671,875		$	622,188		8.0	%
Patient Days		339,537			321,976		5.5	%		995,246			924,072		7.7	%
Admissions		22,168			19,497		13.7	%		64,250			55,325		16.1	%
Average Length of Stay (b)		15.3			16.5		-7.3	%		15.5			16.7		-7.3	%
Revenue per Patient Day	$	671		$	668		0.4	%	$	675		$	673		0.3	%
EBITDA margin		25.6	%		24.9	%	70 bps			25.4	%		24.5	%	90 bps
U.K. Same Facility Results (c)
Revenue	$	76,502		$	70,539		8.5	%	$	76,502		$	70,539		8.5	%
Patient Days		108,770			97,873		11.1	%		108,770			97,873		11.1	%
Admissions		329			319		3.1	%		329			319		3.1	%
Average Length of Stay (b)		330.6			306.8		7.8	%		330.6			306.8		7.8	%
Revenue per Patient Day	$	703		$	721		-2.4	%	$	703		$	721		-2.4	%
EBITDA margin		26.1	%		26.6	%	-50 bps			26.1	%		26.6	%	-50 bps
U.S. Facility Results
Revenue	$	379,857		$	217,427		74.7	%	$	1,037,250		$	630,825		64.4	%
Patient Days		542,345			326,479		66.1	%		1,484,181			939,246		58.0	%
Admissions		32,101			19,949		60.9	%		87,666			56,775		54.4	%
Average Length of Stay (b)		16.9			16.4		3.2	%		16.9			16.5		2.3	%
Revenue per Patient Day	$	700		$	666		5.2	%	$	699		$	672		4.1	%
EBITDA margin		26.8	%		24.8	%	200 bps			27.0	%		24.5	%	250 bps
U.K. Facility Results (c)
Revenue	$	97,875		$	70,539		38.8	%	$	256,117		$	70,539		263.1	%
Patient Days		148,298			97,873		51.5	%		377,218			97,873		285.4	%
Admissions		461			319		44.5	%		1,046			319		227.9	%
Average Length of Stay (b)		321.7			306.8		4.8	%		360.6			306.8		17.5	%
Revenue per Patient Day	$	660		$	721		-8.4	%	$	679		$	721		-5.8	%
EBITDA margin		23.5	%		26.6	%	-310 bps			24.3	%		26.6	%	-230 bps
Total Facility Results (c)
Revenue	$	477,732		$	287,966		65.9	%	$	1,293,367		$	701,364		84.4	%
Patient Days		690,643			424,352		62.8	%		1,861,399			1,037,119		79.5	%
Admissions		32,562			20,268		60.7	%		88,712			57,094		55.4	%
Average Length of Stay (b)		21.2			20.9		1.3	%		21.0			18.2		15.5	%
Revenue per Patient Day	$	692		$	679		1.9	%	$	695		$	676		2.7	%
EBITDA margin		26.1	%		25.2	%	90 bps			26.5	%		24.7	%	180 bps

(a) Same-facility results for the three and nine months ended September 30, 2015 and 2014 exclude one facility that is converting its residential treatment beds to acute psychiatric treatment beds. The transition is expected to be completed in the fourth quarter of 2015.

(b) Average length of stay is defined as patient days divided by admissions.

(c) Revenue and revenue per patient day for the three and nine months ended September 30, 2014 are adjusted to reflect the foreign currency exchange rate for the comparable periods of 2015 in order to eliminate the effect of changes in the exchange rate. The exchange rate used in the adjusted revenue and revenue per patient day amounts for the three and nine months ended September 30, 2014 is 1.55 compared to an actual historical exchange rate of 1.67.

Acadia Healthcare Company, Inc.
Reconciliation of Net Income Attributable to Acadia Healthcare Company, Inc. to Adjusted EBITDA
(Unaudited)
	Three Months Ended September 30,						Nine Months Ended September 30,
	2015			2014			2015			2014
	(in thousands)
Net income attributable to Acadia Healthcare Company, Inc.	$	29,550		$	25,402		$	77,988		$	60,911
(Income) loss from discontinuing operations, net of income taxes		(80	)		51			(83	)		20
Net loss attributable to noncontrolling interests		(464	)		-			(464	)		-
Provision for income taxes		12,669			7,703			34,794			30,383
Interest expense, net		27,737			14,068			77,932			33,505
Depreciation and amortization		16,890			10,325			44,920			21,696
EBITDA		86,302			57,549			235,087			146,515
Adjustments:
Equity-based compensation expense (a)		5,327			2,805			14,576			6,975
Debt extinguishment costs (b)		9,979			-			9,979			-
Loss (gain) on foreign currency derivatives (c)		1,018			(1,527	)		1,926			(15,262	)
Transaction-related expenses (d)		5,842			6,239			31,415			10,834
Adjusted EBITDA	$	108,468		$	65,066		$	292,983		$	149,062
See footnotes on page 10.

Acadia Healthcare Company, Inc.
Reconciliation of Adjusted Income from Continuing Operations Attributable to Acadia Healthcare Company, Inc. to
Net Income Attributable to Acadia Healthcare Company, Inc.
(Unaudited)
	Three Months Ended September 30,						Nine Months Ended September 30,
	2015			2014			2015			2014
	(in thousands, except per share amounts)
Net income attributable to Acadia Healthcare Company, Inc.	$	29,550		$	25,402		$	77,988		$	60,911
(Income) loss from discontinuing operations, net of income taxes		(80	)		51			(83	)		20
Provision for income taxes		12,669			7,703			34,794			30,383
Income from continuing operations attributable to Acadia Healthcare Company, Inc. before income taxes		42,139			33,156			112,699			91,314
Adjustments to income from continuing operations:
Debt extinguishment costs (b)		9,979			-			9,979			-
Loss (gain) on foreign currency derivatives (c)		1,018			(1,527	)		1,926			(15,262	)
Transaction-related expenses (d)		5,842			6,239			31,415			10,834
Income tax provision reflecting tax effect of adjustments to income from continuing operations (e)		(15,088	)		(10,603	)		(45,558	)		(29,016	)
Adjusted income from continuing operations attributable to Acadia Healthcare Company, Inc.	$	43,890		$	27,265		$	110,461		$	57,870
Weighted-average shares outstanding - diluted		71,110			59,409			67,539			53,922
Adjusted income from continuing operations attributable to Acadia Healthcare Company, Inc. per diluted share	$	0.62		$	0.46		$	1.64		$	1.07
See footnotes on page 10.

Acadia Healthcare Company, Inc.

Footnotes

We have included certain financial measures in this press release, including EBITDA, Adjusted EBITDA and Adjusted income from continuing operations, which are “non-GAAP financial measures” as defined under the rules and regulations promulgated by the SEC. We define EBITDA as net income adjusted for loss from discontinued operations, net interest expense, income tax provision and depreciation and amortization. We define Adjusted EBITDA as EBITDA adjusted for equity-based compensation expense, debt extinguishment costs, gain on foreign currency derivatives and transaction-related expenses.

EBITDA, Adjusted EBITDA and Adjusted income from continuing operations are supplemental measures of our performance and are not required by, or presented in accordance with, generally accepted accounting principles in the United States (“GAAP”). EBITDA, Adjusted EBITDA and Adjusted income from continuing operations are not measures of our financial performance under GAAP and should not be considered as alternatives to net income or any other performance measures derived in accordance with GAAP or as an alternative to cash flow from operating activities as measures of our liquidity. Our measurements of EBITDA, Adjusted EBITDA and Adjusted income from continuing operations may not be comparable to similarly titled measures of other companies. We have included information concerning EBITDA, Adjusted EBITDA and Adjusted income from continuing operations in this press release because we believe that such information is used by certain investors as measures of a company’s historical performance. We believe these measures are frequently used by securities analysts, investors and other interested parties in the evaluation of issuers of equity securities, many of which present EBITDA, Adjusted EBITDA and Adjusted income from continuing operations when reporting their results. Our presentation of EBITDA, Adjusted EBITDA and Adjusted income from continuing operations should not be construed as an inference that our future results will be unaffected by unusual or nonrecurring items.

(a) Represents the equity-based compensation expense of Acadia.

(b) Represents debt extinguishment costs related to the repayment of $88.3 million of the Company’s 12.875% Senior Notes due 2018 on September 18, 2015, including a prepayment premium of $6.9 million and the write-off of $3.1 million of deferred financing costs.

(c) Represents the change in fair value of foreign currency derivatives purchased by Acadia related to acquisitions in the U.K. during 2015 and in July 2014.

(d) Represents transaction-related expenses incurred by Acadia related to acquisitions.

(e) Represents the income tax provision adjusted to reflect the tax effect of the adjustments to income from continuing operations based on tax rates of 25.6% and 28.0% for the three months ended September 30, 2015 and 2014, respectively, and 29.2% and 33.4% for the nine months ended September 30, 2015 and 2014, respectively.

CONTACT:
Acadia Healthcare Company, Inc.
Brent Turner, 615-861-6000
President