ACHC - Earnings call transcript Q4 2017 | Acadia Healthcare Company, Inc.

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Brent Turner

Good morning. I'm Brent Turner, President of Acadia Healthcare, and I'd like to welcome you to our Fourth Quarter 2017 Conference Call. To the extent any non-GAAP financial measures are discussed in today's call, you will also find a reconciliation of that measure to the most directly comparable financial measure calculated according to GAAP on our website by viewing yesterday's news release under the Investors link. This conference call may contain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, including statements, among others, regarding Acadia's expected quarterly and annual financial performance for 2018 and beyond.

For this purpose, any statements made during the call that are not statements of historical fact may be deemed to be forward-looking statements. the intended anticipates, to foregoing, similar expects, the are expressions identify limiting words plans, believes, and Without forward-looking statements.

cautioned forward-looking factors, results materially statements, the discussed forth news release, hereby by may Commission otherwise. and to the differ Joey any our in Officer, opening Jacobs. are Executive statements. that consequently, update new turn fourth may of Exchange to undertakes The statements You At now quarter and conference the our be for or as Securities the obligation and important no whether information, forward-looking results company Acadia's time, actual remarks, among events result from in set I'll and the in Chief Chairman over others, filings a with publicly these affected future operations and this

Joey A. Jacobs

you Thanks, being for with Brent. us call. and morning for conference fourth Good quarter thank our today

Brent, and our have line Financial about questions. today XXXX, to I your each fourth with some addition of here we'll open team. then and for for Chief management and quarter members executive other the our I'm David In Duckworth, outlook remarks David the Officer, our

overall the performance with quarter. fourth We pleased are the for

the quarter same-facility for XXXX. exceeded from of increased expectations. of our X.X% for results the X.X% Our or X.X% fourth met quarter quarter Total the same-facility from for fourth UK of compared the quarter XXXX. revised U.S. quarter fourth revenue XXXX. the same-facility revenue to fourth the as increased XXXX revenue increased quarter of

included about to U.S. and with addition of XXX these the quarter total fourth and of expect in UK significantly the the XXX added XXX For these more U.S. added during new expected to which than same-facility of to in XXX beds facilities existing we existing increase XX% with beds XXXX, During in and to the add XXXX, beds in beds the This two contributed beds the we revenue quarter. for facilities, added the XXX fourth new

XXXX. We have de company-owned in and to open ventures two joint two novos scheduled

acquisition in joint company-owned expect complete XX-bed capital novo building will during focused existing we our facility facilities, and a quarter, facilities, to we and XXXX priorities the be for additions of venture While on education our debt repayment. did bed UK de the the fourth

labor. initiatives We the both Longer-term, have to by improve prospects entered of increased latter investing are labor clinical for through staff, during In the the care appropriate our we months operations. negotiate remain real-time additional provide. XXXX census, we year. focused reimbursement issues for nurses the weak and growth optimistic in working increased impact We the about to expect we rebalance the UK the of of and manage census a in our agency mitigate and these relatively in short-term, of cost on to management drive XXXX recruit

manage We have labor, now agency Facilities hours new on agency daily implemented several initiatives a required to to including our their tool. help a track basis. are reporting

percent of we With In a to in labor December. agency improvement our total starting in see from these agency expense labor. XX% initiatives, the help declined January, from are XX.X% as to

this improvement expect We XXXX. throughout to continue

same-facility than provide As some in would a XX% of for the from metrics fourth costs, total to expected We XXXX. including to decline XXXX like to percentage agency also in labor, of are revenue, less quarter for labor guidelines XX% our XXXX.

Acadia. demand, related margins in parity potential same revenue this XXXX, further expected dynamics Same-facility Thanks morning some the shareholder expected continue mid-single is capacity, to EBITDA well-positioned earnings Despite your the are in markets. dynamics growth slightly for UK and to or leverage to the value. same-facility behavioral to challenges expect create favorable in healthcare interest support and our We access of U.S. long-term grow time to Acadia growth these digits. We in the in the and and up. your believe

the David take through you to here Duckworth Now is financials.

David M. Duckworth

taxes due The the morning. in the for XXXX. Same-facility million of and XX November XX.X% in of increase revenue with XXXX. even diluted X.X% of of the in UK for on X.X% XXXX. the fourth of and day. divested approximately and of for to increased increase which X.X% XX.X% of of patient a quarter XXXX. increased EBITDA patient the our patient with fourth a X.X% good Patient was results fourth margin margin increase quarter impact quarter of tax for a share $X.XX of for reflected the Jobs per XXXX the patient in fourth operations compared the rate days XXXX. a fourth Act quarter, for XX.X% for company's EBITDA the fourth XXXX Cuts X.X% X.X% revenue million. Same-facility of quarter quarter revenue the of from Adjusted and the X.X%. which quarter margin revenue the income for increased for of quarter XX% Acadia's was rate XX.X% total the of with fourth EPS XXXX, the of quarter the for for UK Joey, fourth U.S. with to quarter increase $XXX.X was to earnings the company's from in million our for compared fourth latest Total same-facility XXXX. on $XXX.X revenue income $XX.X Thanks, $X.XX was were from compared and growth compared revenue of contributed of X.X% quarter, X.X% quarter the Acadia's EBITDA quarter compared for was transaction-related the $XX or the the XXXX. quarter for compared fourth the XX.X% for $XXX.X of of Same-facility million benefit $X.X of was fourth quarter XX.X% operating operations increase before XX.X% patient X.X%, XXXX, the XXXX Tax XX million, days increase fourth that quarter a approximately day. quarter revenue for full-year XXXX. fourth flow same-facility tax the for fourth of XXXX cash revenue. consolidated an of Same-facility of EBITDA adjusted in quarter UK the tax with Adjusted the $XXX.X per quarter million adjusted fourth for was included of facilities million was and fourth days for Acadia's the operations from and quarter, fourth for $X.XX excludes per for continuing adjusted on fourth Also EPS in XX.X% the day operations grew The quarter X.X% million expenses to per with operations the $XXX.X continuing fourth the XXXX, of the revenue XXXX. increased XX.X% fourth

have guidance afternoon's Turning in release, XXXX to XXXX. results our outlook our we on as established financial and our quarter financial yesterday news for XXXX for announced our the fourth based guidance, and and full-year

XX%. range and and of includes: range EBITDA billion; $X.XX million; a to of $XXX pound per guidance in sterling in a in $XXX an diluted $X.XX to a $X.XX a adjusted billion adjusted approximately exchange Our $X.XX EPS revenue of rate rate $X.XX; million of of British tax range to

of share for range per We a expect in quarter the to earnings of first adjusted diluted $X.XX. XXXX $X.XX

thank This impact any your our open concludes with us. for and ask the for now include future Rochelle to floor not expenses. does or this transaction-related guidance the from acquisitions morning, prepared remarks being you I'll financial questions. Our

Operator

Thank you. we'll take Jefferies. Tanquilut with And Brian

Brian Gil Tanquilut

Congrats. David, first question for you.

Is year-to-date together, or be thinking having average mean, think using should I all FX beds two added is, in? your enough so far, about in beds XXX in what The that those And of – alone? at QX $X.XX. alone So XXX just the guidance, the your is? As guidance – $X.XX. I conservatism? How also, factors in should putting about that dose almost you're about conservatism at about QX putting I you there I that as think

David M. Duckworth

do we build history it look I conservatism. at to been on the forecast it some think, now. for we But we several of like that Brian, rates, do for exchange in the strong and months has the have

So, you're factored over on the a built into that's maintain guidance. some And adding our And that rate we today, the quarter. of into into there the had our it is up the great can our right course new beds, exchange We XXXX. the then new is that, facilities, new ramp if factored in new a been to facilities beds upside those and quarter where the ramp-up during opening guidance. facilities is is beds two

Brian Gil Tanquilut

Joey. you. then for follow-up my Got And

at the benefit As I of with the will passed opioid epidemic? realize recent bill that? dollars about about from funding, you think and incremental tax the are flow-through Acadia bill the then throwing thinking addiction government that the the how how the And opioid Cures

Joey A. Jacobs

put obviously, and but they additional government only through it's state through issue. help the that the Unfortunately, a wants on positive state. federal go the Cures did the the monies the to will during not in state The process. go this budgeting the it get money being states process. Cures successes made should give the access three used has through Act, Well, to have – you And will that find money they the treatment. treatment go where in actually treatment, Act to the better to way all to early We more is state a it for patients. and the towards We've think some today had

to going the think other we follow. So are states

used. could, states and we the in But towards population go no couple position it we have pretty treating towards provider, absolutely country three to really, will So we that and patients. those good is. our There's will largest much working moving how country, need get recipient it and the in, be the We absolutely that it patients, the we on have for to and aggressively something but And some treatments flowing that money the so and for of And quantify we the they We today. treatment the it's in to think states education, funds. the of communicating wise, positive. we already to monies these expand the that the a we every largest actually start think monies patients. be should needs. state, idea positive money of getting we're with are with it's of this states a since way these should; states money access a this But are more know implemented can largest should we that work in a being how the which go lobbyists

Brian Gil Tanquilut

I appreciate guys. that. Thanks,

Operator

Credit we'll Credit to on with Rice A. next, A. - Rice move (USA) LLC J. And Securities J. everybody. Hi, Suisse. Suisse

just ask a let the about First comments little bit all, of around debt. me your

you're target? a were end do if times of the of from think I assume about at would where is the Is as any making little maybe borrowing the reworking there an difference better a get to you debt-to-EBITDA. for part you you some reform? a Do that you think, net had You paying have at mismatch target? down debt. you'll flow said you're I quarter, assumptions that? tax And bit that benefit X.X or of cash priorities were make on refinancing something there that the or opportunity updated a

Joey A. Jacobs

of J., is I we below the actually pay A. if – combined above a the be little down, read our you you we year will thinking of think, debt from amount Yeah, get EBITDA leverage to the benefit. our the And maximize growth if expect help at debt some and guidance end and improvement the in look excluded a times. any through through with And X there tax we do us debt XXXX. during We deductibility do have times can we restructurings our can the working is that and benefit. where slight about X are

as the is A. it's So, step we're in up either refinancing working some Credit I in rates assumption Suisse LLC interest guess, you items expense XXXX - interest an that assume Securities Rice or those in well. any way? for J. (USA) on of assumes some there

David M. Duckworth

A. is J., this David.

next in And We are factor what to of million. expense are our We're that some over year. in do. rates increase building projecting interest just $XXX in projected does expense for interest

debt that guidance we planning repayments. We make factored some and are would have the also into

our about. did maybe year. question, that's cash in impact like think you're A. said, we of we But that that to think reduced expect rebounding Credit that other to Brent describing it would to in the do at can market rate, would debt what sentence Is Joey's refer grow, there's more corrected? more way of the We interest. way repayments rate discussions repayments the get needing comments as ahead characterize any or NHS you maybe, issues, million that disallowed tax opposed the XXXX you're prepared you factor mandatory minimize Is that support as XX% forward. I update situation - the remarks, I say, much think about as labor Suisse slower. the as more have management is that $XX UK just, make for a are million that right looking tax would And and It any And the does effect in But there it tools through the sounds can interest. my almost a be your now? tax the quick, J. to effect little (USA) agency to that. now suggests of describe that not that Okay. that than manage just there's real the maybe Rice to $XX that with planning of Securities and earnings debt And of LLC going as we in flows can the

Joey A. Jacobs

A. J. Sure,

isolated Let acute have of in that. UK. cost is of me we're But is the beginning that that markets. totally Saying tackle the see started, soon. nurses in the first. initiatives and There to But the some anytime a and won't away shortage still isolated markets, it's there some we that, this UK, agency better an shortage benefit management some not go nurses through about in it's clinical of across and there so crisis is

nurse urban through of we there the of so there's the couple to not that. have are approach in the have of There's we're of the then rural working we some But very a community markets where take difficult. relocate areas, Some that nursing And nurse and the there shortage. we the there. in more need, locations a

stay pleased very we in doing progress we're to monthly is focused. want the to them UK Now see and that the our team

using an that We a our to like better in job would employees part-time are shift. full-time doing and additional work

if obviously, employees do agency to internal can expense. So, our then we own get the more replaces that, of that

We with talk of Minister have our charge there. company capped lot agencies Health about, it's the in And should they a much of the a facility med/surg how officials could a facility, met other whether and facility. staffing or there's nurse be government

talk So there's UK. or we of talk can like how also that. There exception do issue migrating is around work about the an the into

internally and in than a doing signs positive work we're going the second to we're and hard. managing take year. real and of it So say, third we quarter to we going them We're see better last did, job quarter

So, I'm upbeat there, but we have to execute.

was? execute Suisse to question the of J. then And the Credit UK? We have LLC there. latter the part rebound in (USA) - your to census Securities Rice A. Relative

Joey A. Jacobs

Yeah. patients. areas a calls, should is determine transition local have the process the haven't The before team patients been through another UK, communities previous completed. done the and think. take going started by on that local they've it fully will they transition of year in now these mentioned And we in. this our But flow UK UK we got the it of And letting and as it estimates

is that, doing saying well. business Now education extremely our

all-time census. Our is hitting their now highs healthcare business on

need because service those spots we taking to – of it there's bed meet there internally, local put meeting. we continue we'll in communities the that will So, of meet are do bright year, over where do the some to this more unused and been UK, We're we in we and needs beds that. NHS. an retooling be want retrofitting of existing to And the the and hadn't would to them some a

over going in the our positives week, visit there it and So with with MOR be And go day their weeks UK over again take for with we'll a them this there there's a time. three MOR to we'll of over and on a be we lot at February.

- cautiously take we're a LLC a lot. Rice So, Credit it All optimistic time. at (USA) Thanks right. Suisse and day we a A. Securities J.

Operator

And next, William with we'll Blair. to move on Ryan Daniels

Nick Hiller

questions. Thanks taking Hi. for Ryan This Daniels. for Hiller is my in Nick

the do more to novel even enough maybe you serve facilities, on there I where, mean, they that from mass Just could stimulating you demand ventures the joint is U.S., And have partners? will? start as reference critical in if

Joey A. Jacobs

Absolutely.

We coming one have more in them of that facilities And Ohio potential up enough Tennessee, two to venture with joint those Medical in Erlanger this year. online the Chattanooga running in we we've references with as Center. here One use partners. and got facility. Mount Carmel And

we yes, are stages that few joint references, So do to execute strategy. bringing and we quite process and have different us in new here continue approval of use existing we for ones in and a they our will optimistic to are our that ventures growth very opportunities

Nick Hiller

and on volume also you just U.S. between the your well? and And guidance, the for that price UK could in as give then breakdown XXXX

Joey A. Jacobs

can. growth. think for company total mid-single revenue We I digits same-facility the for

expect the once beds the year to and We patient get days to patients the X% range for all X% these in online new grow get we there.

so to in to X% X% that will over a, increase are a year. expect We that for If that it increase the X.X% our we and retooled the beds then do same-store have day the we to us rate to In hopefully, range. revenue positive NHS X% same-store X% to needed flow patients range. in growth expect be a on of patient we and growth about will get the here, and there grow improve X% the expect less revenue And that give rate the for that the will continues the the their in slightly U.S. UK, services overall we X% X%, just UK,

place. the about feel we beds the have that got the and and both U.S., UK and executions the the in and we've good we So, teams

Operator

done you were with your Hiller], [Nick (sic) Daniels Mr. And question?

Nick Hiller

you. it. Yes. Thanks. That's Thank

Operator

Deutsche Rigg We'll you. move Chris to Bank. with on Thank

Chris Rigg

Hi. Good morning guys.

that follow-up to on question. last wanted Just

in level? that X% at you pressure margin see the to labor sustain can margin dynamic? if still you're the Or of some going get X% UK, So, will you same-store the because to

Joey A. Jacobs

will dynamic labor put us. on continue to The pressure

and improve, to is margins expect expectation our our budget. we Now that that's

in the UK and even So, the U.S.

Now it improvement of margin points both but may XX be countries. positive we margin in only basis improvement, expect

labor spent labor but Now an for we cost than did less dollars issue, we is example, the December. January – in in

So January working to how we're good doing with our trend a agency off reducing costs. in was and

can on there. there. the that build through we then if We're So, we're continue year, to

Chris Rigg

to Acquisition-wise, Got XXXX a the Thanks. in did the you. pace I the – and leverage Great. not you you you XXXX do then, expect with terms in in talked focus. more side? about a of And as the focus relatively just mean, being JV similar organic see on

Joey A. Jacobs

It will you side. would be to not wouldn't – opiate acquisition we buy? an do more do probably an we would if acquisition, that what If on make and say, Joey, I'm would JV acquisition the someone on was to organic can one want buy treatment. you help I an saying acquisition. the

acquisition We the there, that have for services. facilities would right money that. do don't giving an of XXX about government we that's the make is that, taking okay – the if because I federal do they're demand too. all But the

through joint the of through ventures. plenty have We our and bed builds growth

for we're growing company. shape So, the good in

Chris Rigg

Thanks a lot. I appreciate the time.

Operator

And next, to Citi. we'll with move Giacobbe on Ralph

Ralph Giacobbe

Thanks, good morning.

ramp of ask I'm to growth wanted of then And sure EBITDA causing guide, kind XQ would year-over-year. sort terms in for seeing would comp of sort Just year? of of the the if there's not the if the back some I maybe early half year in EBITDA difficult to it that into that's back you're the what looks like or a into about pressure. number, missing flat something the it of an little drive I'm if bit something a try imply

Brent Turner

is Brent. this Ralph,

all in of quarter, recall, might employee-related the has first taxes. company You the a reset the

this become occupied, then the those in the novo, first significantly ramp you much the beds going de tend de higher first And as in costs, And through there's year. labor the open have quarter. But novos the also year's losses, remarks, opened. balance in And as a quarter, we because weigh more in beds the so that become a taxes new of the that's heard of you have to so, – then on some we we that see early first anytime to employee-related quarter. two have

components So, first primary those are the the of quarter.

Ralph Giacobbe

mean, like in All seems then to pop And was Okay. there UK the That's but of positive. like stay. of is helpful. in admissions, census talked a pressure right. you but unlike some more I pretty the big you had stream it sort referral squeeze the a continuing look about

sort what Thanks. kind So, or XXXX? just mix that's you and those the of about a we continue that's if flesh factors can of to hoping out that are think phenomena dynamics, as going in play at are due to shift

Joey A. Jacobs

back of or so stay mix, mix was really change did unusual there length down service there. nothing different length the The stays We go there. for service just of drilled was different and

growth, If our to NHS well, the also internally continue. Now then doing that things we're admissions we And transition the facilities. admission and that. the goes to to were drive should glad see

about that, positive our so we're So, there that are service. need patients

us through We have patients for working that approved process. them the matter getting system, through then documented a of it's for just funding getting have there's and just and the to them

Ralph Giacobbe

Okay. Thank you.

Operator

And with Bank from Kevin hear Lynch. next, Merrill Fischbeck America of we'll

Kevin Mark Fischbeck

to wouldn't little surprising looking with guess, those keep buy I UK. that there want mix comfortable are bit potentially know, deal you'd the asset that, to how more there's a the divest, but want just have? still came of to to some for things the I really there? that did little you along guess, about the there, of if a or investing buy to anything you you're business money be that anything, putting Thanks. you it Whether right the work was in you doing something like that you bit of not the UK sounds talk Can in well some are you I second. a but lines Great. go in

Joey A. Jacobs

small is XX, done it acquisition, that we has I made, Our XX of And think service education that well. acquisition, beds well. only line that extremely doing was extremely

services – the expand be So if top we would priority education it to there. were probably something, the to acquire continue to would

that on the nursing And price with a is there we Priory right home acquisition, nursing sell we that for – something, we're the we is of home if there and piece we we our selling and see something would is if board price the and subsidiary out to for that that as right – there business. working got approves, would asset. have something a and the divest is far that buyer as Now

Kevin Mark Fischbeck

Okay. Great. a XXXX? California. being I you Puerto how in things And mean, you anything and Is like Rico guess, I quarter, had drag a drag of last of couple mentioned things there into that, being those on results, a like Or to hurricanes fire think a any obviously drag in QX? about

Joey A. Jacobs

drag it patient quarter. to line. and There would basis patient happen $X.XX but days those patients lower impact it didn't But We growth. did, press $X.XX in for XX growth would XX flown flowed points us, patient they mention behind those those fourth was those a – through in QX. did basis And disasters the us basis day the have and but And days on fourth bottom hurt through our on the flowed through have to maybe revenue XX us – in have points. quarter, us for generated they're flowed points, it their now, natural but would the release,

Kevin Mark Fischbeck

Okay. And then clarification. one just

Or is labor cost a to number? You number? labor from go company that cost XX%. mentioned expect you that labor UK to costs that XX% Was

Joey A. Jacobs

That's No. UK. the

Kevin Mark Fischbeck

right. All Okay. Thank you. Great. UK?

Operator

And next, we'll James. to Ransom move on Raymond John with

John W. Ransom

for overhead here. XXXX? things going XXXX What me of versus in number be is Thanks. Good corporate to morning. the couple A

Joey A. Jacobs

little. up detail. And let of, to going because the a David, be you It's I'll answer

David M. Duckworth

just John. And U.S. XXXX, reflecting we Sure, the less David. overhead kind And projection just for we bonus annual that what an finished million. XXXX, $XX amount. that $XX is for office related a is where accrual like The saw around corporate lot increase does targeted be is corporate more This million. than XXXX of of cost would from it represent accrual where normal bonus

level. that So, corporate would return to $XX incorporate to of XXXX and in the more the office cost level our that, million drive a would normal guidance does that

John W. Ransom

million change, Georgia $XX that's a So, by University of year-over-year math.

Okay. Thanks.

U.S.? both the inflation you're guidance what a of in years UK embedding is How rate that say, ago? Secondly, in to, labor of and your compare does couple that

Joey A. Jacobs

John? time, more One

John W. Ransom

overall is the number does ago? how And counting agency, to Not two compare or what in improvement inflation that labor a your year make for you'll XXXX?

Joey A. Jacobs

tight to we company has John, previous control. pressure. as we many It compare But an a X% would that most come range it's need still time, that approaching a salaries board inside for to on would me is easy here probably their adjustment. our specific adjustment, some past that the a in it it labor operations to do and for there the now do isolated tweaking the some years, total. have but It's said, pushing years. of we for that sort as it's seen need do. area out And of where have wages the towards company not And of we have X% the would it's X% plan on across this facility year is markets to the the been we're the compared to market Joey, and would X% on

level approval occur. of me. by in any And would were X%, the extra be an to to more exception the that company salary If than would there's you approved give plan

John W. Ransom

Thanks for model out that. then, those David, de the into is losses? going And break I you what each to quarter, built for hope. And novo are

David M. Duckworth

see you the same-facility total result... at you if could losses, and amount de facility look our between – if our the For well, difference the John, you roughly, novo

John W. Ransom

Okay.

David M. Duckworth

...that mostly represents.

Brent Turner

secrets. so Georgia, University him any don't of give He's the from

John W. Ransom

math. would there be was told I no

David M. Duckworth

slightly those then timing the the novos. we as from Brent mentioned But the over course again, with of see to full-year, reflect the loss facilities timing facilities, there of as of of the about the see de first losses results the maybe earlier, $X breakeven the first with kind second loss. half some that of we a new But do the quarter profitable would be the But ramp year. the up, year, greater by some for quarter would reflecting million

Joey A. Jacobs

help me let you. John,

first loss. the novos. on we During our million plan, $X.X had million quarter, a three $X.X the had we the fourth loss In de novos. We in quarter, have de

John W. Ransom

missed I and love bed was de numbers. I the novos, beds there? XX So, here, I adding I'm what when call, UK? kind is if number, sorry beds excluding you getting add U.S. same look, late facility it And is XX the on give this, it just of but

Joey A. Jacobs

is up. that David looking

that number, I think. have We

David M. Duckworth

de we of additions about XXX those XXX two had the John, were facilities. Yes. and full-year for bed the novo

John W. Ransom

And this the Okay. year? plan what's for

Joey A. Jacobs

John, you the beginning, didn't you question. get one in it hear only

John W. Ransom

back carve-out. right, was Florida get in is I Thank Oh, a All right. I'll that thought this queue. you.

Operator

Kevin Craig-Hallum. Ellich next, on with And move to we'll

Kevin Ellich

questions. I up guess the on taking John's And going for question because it. to was I'll Thanks ask I follow just

Joey A. Jacobs

can't to can't you do back and John, you No, give answers. that. Can't take his him that, it do

Kevin Ellich

I don't math pretty that evenly in phasing us help the can with the Florida, in He's Or back know. do toward is down North half? good, going of the throughout Is Well, the but the year? additions? you bed – XXX spread actually more weighted it we up to we be

Joey A. Jacobs

No, with we you can as help our estimate of...

David M. Duckworth

towards we the David, the year this have And of look as a weighting detail do half for back of is more at we the XXXX.

the spaced beds somewhat second in beds with XXX so first the remaining fourth quarter we third evenly So, in the between the the quarter or and have XXX quarter, quarter. another

Kevin Ellich

that or QX to patient about then, I Joey, detail Kevin's the David. in XX made what hurt points. caused question Thanks, growth Was to as drag And give you about was you weather-related, basis could a by think comment a that that? us helpful. That's there day

Joey A. Jacobs

including California facility It Rico, and East on Coast, had had was that we to because be Puerto hurricanes in one evacuated of fires. the the the

Kevin Ellich

Okay. you. Great. Thank

Operator

move And Ana to Gupte next with Leerink we'll Partners.

Ana A. Gupte

morning. And on are willingness on you seeing inked? are And capacity of performance their Good to acute wards? Wanted or their you an JVs. terms to of you've of update mix, payer conversations Yeah, they the care the in maybe giving anything any having reduce hi, you're behavioral thanks. what get volumes, guarantees or the

Joey A. Jacobs

giving in no days they would guarantees There's many how patient be us.

get main their many issues them. close a has the all with beds quite partners psych very The new of something don't few venture patients want just need. these too med/surg risk their sites do. that the emergency units it's joint a rooms many that, venture for is, they complications looking psych hospital joint facilities psych use to joint patients that would being staffing comfortable the and And Now that. they medical their we keep patients. them treat their also that ventures to in and for psych And they're – can causing frankly, have in thing is and Occasionally, are

we when joint would that that triage freestanding they that our room and venture. their – So, be that patient expect patient visits psych using emergency psych

dynamics the the of that's flow. So how patients

Ana A. Gupte

Okay.

or on will they something it's Medicaid-heavy on patient mix night – So, the also just ER – Friday a you... not send in

Joey A. Jacobs

patient. all It's

Ana A. Gupte

I Okay. on It's the I comment it, earlier. said missed all pricing I'm call was Can call, in you You the on this trends sorry if another the U.S.? patients. have might on

Joey A. Jacobs

the revenue range, The pricing the opiate saw X% we states, expansion to think, is is inflation we in beginning us year to give X% service year. this X% that and some trends, brings closer Medicare increases a little there also to to going good us. at to because of there The this the

was an that X% be overall range is pleased. So, to we would get average, to X% going to X% rate very be somewhere X%, we per Medicaid give we if increase, to day, in with revenue Medicare. us want between if Overall, X%, commercial I take a

Ana A. Gupte

if and essential quite Great. health the I final the Okay. health weakened which benefits a plans, There dynamics with association on One bit. could. short-term was one, two going policies

potentially other have do to on a the the are hand, offsetting they has on around might lot gun mental issue. of health? conversations you around the taken that having On mean, additional violence other pressure the Trump of be health kind benefits. rhetoric actions, But gun essential of violence. what – administration of the weaken all I funding how you some Maybe

Joey A. Jacobs

senators We active protecting on with expanding and of some are key members working very psychiatric the house benefits. and

So, three was with it's ago about meeting positive, I conversations. very just and beginning. we've these very had weeks receptive. very positive But there individuals

be or the any that with key government is no we communications don't happened Now comment the and that key catching. that sign we that can addressed one a, getting to being issues what on or But very state not and health system obviously, committees the issue. thoughts to on are it Florida, on it's have the mental wants our should on this, what open a anything we in senators much. do federal congressmen And assist happen I there's so that are through really

Ana A. Gupte

Got it. much, for Joey, Thanks the color. so

Operator

JPMorgan. move our with now Gary we'll And Taylor to question, final

Gary P. Taylor

Hey. Good morning, guys.

Just one clarification.

that's same-store First, expectation on UK, growth revenue X% to X% correct? the constant currency number,

David M. Duckworth

Yes.

Gary P. Taylor

Okay. CapEx Did so growth Did XXXX? for missed about talk and miss I – I missed. maintenance I don't you I just first maybe the CapEx minutes, five think

David M. Duckworth

didn't. we Gary,

continue with between do new X% number then would somewhere at for revenue. our facilities projecting million being and we opportunities We that our levels, is the maintenance And historical around $XXX beds just million. of to are XXXX of expansion CapEx which see $XXX CapEx

Gary P. Taylor

XX just you and UK down I'm know was quarter Thank want I back understand days. to make was And first UK about XX mix, correctly. stay, – sure talked days, just length down length flat, understanding the last coming about then XQ that one, so look I When of my service to XQ at you. that was we is XQ stay, about flat, of

trying if the stay healthcare, than service then XQ So, seasonality implies much Or of I'm the the some quarter, filled this mix? if weaker just third and actually education to was in business and to just understand length behavioral the more the weaker gap. than that there's

seems well. feel don't just So swings really it it sizable I understand I that like like

Joey A. Jacobs

that UK stay different very we the usually length you more six the length around UK Well, of give do Gary, is line of I've which we in got payer's the for have have very have is stay. some the is the of than length to people stay. to the detail, of programs distinct is here But what detail. The the service length in looking In U.S. We line. may some off in around U.S., stay the the

So, business, stay. service take doesn't one a patients have years, if many it the to we length lines impact of you two-week piece so of were have moving the could of of the versus forensic more acute stay if in had you length patients three our part those to business, in the they around in

it will admissions of so of influence when smaller have there, S. But where then, than And so, over are stays the move we they here would very more have we an we'll it consistent. than move. much would discharges will U. and think number lengths times have someone stay on have times more in the And it

UK, it's times an of U.S., eating many that, think three months So patient I to length people length stay, try not service but to disorder is piece that in stay could a stay, different there payer it's specific six like a in it of a the months. to the compare

So, the one thing there. internally that that there stay if if explain new look service length of more comfortable open that that and is if one on length or or change. going to back at the is unusual length anything very – stay program, line brought disorder had or you the of we're facility But we a a added another we way. analyze main The that see of and of the if stay could with could acute the beds, drive that take brought way, other – retrofitted the and we eating

Gary P. Taylor

But might first and it. how appreciate so And few to the service not might Thank I just certainly I appreciate those imagine, makes I'm lines. just I just Maybe understand consolidated length various more understand a business a little Okay. you. bit than that the that. try of one move a appreciating these appreciate numbers follow-up stays I'll I that. little maybe patients better. Yeah, by

Joey A. Jacobs

Yeah. Thank you, Gary.

Operator

question-and-answer like conclude to Mr. And Jacobs now for back turn over the any that today's additional would call or to closing I session. will remarks.

Joey A. Jacobs

partner delivered thank the our had all great that in appreciative appreciative operator. to also, here a to of And We to improving us both you, our the job, we of obstacles U.S. a with thank to and like into in quarter. their the the in families, positioned care our fourth some are overcome works the UK. are I in patients I making field, we patients want XXXX we and thank and very, a on the team very you and their you and to UK, team make lives and give more that Acadia system. Great very difference, great Well, our We're you all the am grateful never open-line the communications, job numbers. did teams and NHS we that have and being system care have the coming enough. in

to next so that. XX travel. I of the be over in will the appreciative very the we're days out and So, facilities visiting forward to looking some UK, I'm

for you thank to we'll fourth you a again, the after talk once So first And quarter. great all quarter.

Operator

will you today's participation. that And call. We for conclude your thank

Brent Turner	Acadia Healthcare Co., Inc.
Joey A. Jacobs	Acadia Healthcare Co., Inc.
David M. Duckworth	Acadia Healthcare Co., Inc.
Brian Gil Tanquilut	Jefferies LLC
A. J. Rice	Credit Suisse Securities (NYSE:USA) LLC
Nick Hiller	William Blair & Co. LLC
Chris Rigg	Deutsche Bank Securities, Inc.
Ralph Giacobbe	Citigroup Global Markets, Inc.
Kevin Mark Fischbeck	Bank of America Merrill Lynch
John W. Ransom	Raymond James & Associates, Inc.
Kevin Ellich	Craig-Hallum Capital Group LLC
Ana A. Gupte	Leerink Partners LLC
Gary P. Taylor	JPMorgan Securities LLC

Acadia Healthcare (ACHC) 22 Feb 182017 Q4 Earnings call transcript