ACHC - Earnings call transcript Q4 2021 | Acadia Healthcare Company, Inc.

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Operator

Good morning and welcome to the Acadia Healthcare's Fourth Quarter and Full Year 2021 Earnings Call. All participants will be in listen-only mode. [Operator Instructions] After today’s presentation, there will be an opportunity to ask questions. [Operator Instructions] Please note this event is being recorded. I'd now like to turn the conference over to Gretchen Hommrich. ahead. go Please

Gretchen Hommrich

safe welcome comparable Investors To financial meaning our conference contain and of you'll XXXX and quarterly Investor fourth and measure directly Executive in with others quarter for calculated over conference discussed the measure according Good yesterday's Reform our on is extent performance most that financial to I'm within to of annual to may a GAAP any Gretchen find measure XXXX Chief website Litigation our among Securities regarding you provide call. I'll Debbie of news call before Hommrich Act to the Acadia's beyond. year-end reconciliation the call turning Acadia. Private statements and for call Osteen. forward-looking morning Officer, first Acadia's harbor release link. of the expected Vice today's Relations viewing financial President the statements by XXXX under the This including non-GAAP

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

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

Debbie Osteen

team. today for and I'm XXXX Good for for conference our some morning results quarter today here provide and guidance being XXXX. the members with will Officer, financial of our XXXX and and David about quarter you of fourth for us Duckworth Chief executive fourth I year-end other and David management thank our operating remarks and Financial call. with our

we will your our for questions. comments the open line Following

with We demand results XXXX, health strong completing quarter pleased behavioral our reflect financial are the for results growth fourth our robust operating year for Acadia. and another These services. of for of

the we solid While operating XXXX we in of in the quarter year-over-year and see faced related the fourth the challenges continued growth first to of volume and of COVID-XX, of late variant XXXX to surge strong quarter early Omicron trends.

During the point than the any we surge, variant other portfolio across in saw cases entire at Omicron pandemic. more our

market cases and dropped in While the quickly varied another, further impact our end we our the of employees January. data at starting saw to with overall accelerated function from we real-time support Despite to greatest the recruiting then utilizing be the and in centralized challenges, impact has December, and to new recruiting January by any these needs continue identify facilities. successful to evaluating timing one

teams operations. our with XXXX to place the continue disruption and facilities operations our strict patient minimal same COVID from through to that in since have clinical and Additionally volumes manage had we support or with protocols using

and revenue with highest this on communities For days Throughout X.X%. the patient of serve. the XXXX of fourth same-facility an of for X.X% fourth our quarter standards with and including day of care safety we an have quarter per XX.X% we the in providing patients patient XXXX, increase revenue in remained the increased our compared year, increase focused of

and our of care employees quality and operations seeking health for for an clinicians continued and experienced use have have patient treatment We issues. those to mental are fortunate who team across to dedicated provide substance

team our employees of under of support extraordinary We their are our unwavering for conditions. proud patients of extremely

manage Our despite ability operations execute our strong growth challenging a and strategy, to our reflect results environment. our

Acadia diversified lines through and use eating our across treating issues remains all we behavioral mental service the a is pandemic, for substance offer across acute including managed areas treatment all and demand have of substance we strong patients uniquely disorders options positioned the of services ages. have use As our and while global of all very disorders, health, needs, with seen of greater for those and disorders acceptance our lines. health service societal psychiatric treatment co-occurring

lines Our of country, while individual's fourth the with enable over was focus bringing added needs track across to XX patients serve XXX to record our of respect growth options, demand allowing the almost three long-term quarter years. maintaining key greater to strategic and support of the a to network keen strong with address service initiatives XXX The XXXX extending for treatment to very added total the existing behavioral expansive beds facilities, our unmet the diverse us on services. across In facilities we our XXXX, access fourth active and bed additions health care, sustained in needs. our the past beds quarter, to

We Behavioral adult in in Acadia Chicago facilities, health XX-bed are for make open greater the and behavioral adults address operate children's also is Chicago enter investments to to health is need the improve for Acadia north acquired services as of hospital The the exciting which reopening the begin This which summer children. XXXX. expected Illinois. XXX-bed to opportunity Montrose and area Prior of the to outpatient XXXX Health for slated the on an significant and are real operations facilities, and facility infrastructure the Hospital. side behavioral will estate for located to hospital three non-operational will

need disorder. comprehensive to designed our medication-assisted address with expand growing network critical centers, opioid of to and for the for which dealing continue are patients treatment treatment We use

the quarter, in opened number During CTCs, the fourth opened XX total to we bringing XXXX. five CTCs

a were thorough market conduct quarter, partners, and joint new reach three the to expanding of process. announce pleased fourth Each partnerships. competitive During to our ventures XX we our

the reputation because knowledge track to behavioral in they and our We needs strong and with experience the system care, meet communities are for collaborate their partner, as of hospitals. health behavioral chosen constructing of serve. new high-quality that our record in health proven our the partners We

it align important is with culture our mission, that theirs. partners our values to Additionally, and

Our to a include Services, and premier Central and system healthcare of Colorado, area; a Health partners the systems new one with facility for expand systems, to health inpatient area; Health, outreach. XXX-bed Fairview health outpatient build the a beds of XXX in Florida's in hospital Health, premier latest leading one Minnesota's and community Orlando Cities Denver SCL Twin in programs new

its our On added of ahead. to CON. we of forward projects inpatient and Behavioral network dedicated December de look ventures XXXX. through The outpatient joint allocation hospitals Acadia's behavioral pursuing healthcare consistent Acadia XX criteria Health and acquisition provider is completed of the disciplined transaction our with framework. and four in System a our we growth its is CenterPointe year Missouri for XX, we locations. growth that and the acquisitions capital opportunities markets an We and in in novo's place in Missouri. in requires CenterPointe beds acquisition assets have to XXX Through additional strategy expansions our other existing facility largest acquisition also consists a opportunity attractive acquired footprint in select is This initiatives the meet the state which the high-growth XXXX to operations expand continue acquisitions of that of because state

expand growth see acute added opportunities facilities. the including outpatient also XX and specialty hospital significant care of In comprehensive our intensive services. services We continuum outpatient XXXX and adding to by outpatient we partial at

our strength model the success operating growth in our execute to of XXXX confirms Our our ability and strategy.

our symptoms crisis. pushed in on and the mental We peak believe in the depression to the the elevated levels XX% In has expect traumatic growth and trends outcomes the they Typically, XXXX. X.X% percentage over for who The notably the months to treatment a before of are experienced Health high. encouraged use adults for XXXX has pandemic health depression Journal pandemic that the Lancet after of to well national pandemic Behavioral other early those time. lower noted would the they published into in event Instead, by remained substance This approximately positioned in we than Regional Services. and following was forefront. of the research in different are the found business XX favorable observed Health that then and demand of need expected are the capitalize XX.X% depressive the months study

we As communities always our patients primary mission is to serve. support the and

while as a We will brief our transition. the provide healthcare update continue reach provider. also advancing like leading to high-quality on position to market our behavioral I patient providing and would a CEO focus care, on extending

March retirement As I to you extended XX. my know date

Board has that and will I an Board, continuing working thorough selective and forward I management Board a transition. you. to and role to look team to the process. retirement CEO we ensure the While and soon closely The my forward hope We look announcement remain committed updating search a smooth with my on have highly conducted to

We the on further call. will comments not CEO on search any make today's

detail. our Now I discuss and will in to over XXXX to financial David results call Duckworth guidance turn the more

David Duckworth

good for and the fourth by CARES The for was the provider $XX.X quarter the of fund Thanks income XXXX to Revenue million respectively company $XXX.X in million $XX.X Debbie of morning. XXXX. relief million quarter recorded million and quarter fourth and fourth the compared related the XXXX $XXX.X with of established Act.

XXXX Acadia's diluted Fund, was for adjusted stockholders the million from attributable $X.XX. compared million income the Acadia with to quarter the this adjusted income for $XXX.X last share Excluding was same fourth of Relief $XXX.X EBITDA year and period Provider per

adjusted For earnings and continue the strengthen our XXXX, current our release, reduce in we excludes expenses. presented period transaction-related debt. our income financial to In position

growth $XX cash with was sheet under million, to facility. balance of approximately completed through capital On CenterPointe our a funded of million and revolving flexibility the combination cash December company's the liquidity, acquisition we credit strong which XX, strategy. $XXX on for and of borrowings Our XXXX, hand ample remains consideration support

of $XXX $XXX.X XXXX, Acadia available revolving million cash credit cash of the completion and our As the of reflect CenterPointe December acquisition. million both million and $XXX under equivalents facility in had which XX,

the leverage ratio net approximately XXXX was Our at end of X.X.

received company company repayment and amounts in of the Medicare Payment the $XX Act. Advanced quarter, repaid fourth million the $X.X quarter. $XX advanced Of XXXX the million under received payments XXXX, During the in Program its Accelerated in of CARES to including the million payments pursuant fourth the of continued

throughout repay September repaid also the XXXX. remaining in repay of the to of of million In continue XXXX. deferrals balance and of remaining will $XX payroll half tax we XXXX the second XXXX half the approximately portion We we'll

Now turning to our guidance.

release, As in of guidance the press our noted we quarter first full XXXX. for year and providing are

million expense interest the of $X.XXX million, $XXX million which to and a of billion; adjusted $XXX range a to repayments $XXX a for in of of million. and in $XX cash share revenue full million million in XXXX, stock Medicare of expansion guidance year a earnings $X.XX payroll a of a in billion million million expense in EBITDA approximately per of a $XXX $XXX of And to First earnings diluted range adjusted a XX%, range of million, to for $XX expense in and EBITDA range of $XXX million, $XXX adjusted million; includes to tax range $XXX share operating $X.XX. $XXX of expenditures range million in compensation expenditures $XX of flows our to and rate in $X.XXX range to range range a of revenue $XXX $X.XX $XXX adjusted the XXXX, million includes XX% a a of $XX $XXX payments $X.XX, advanced $XX maintenance includes quarter depreciation capital a our capital million in million, range diluted range approximately in first amortization guidance per tax in of million, in to to deferrals; to to million

this guidance does or future a transaction-related divestitures the include of expenses. impact As reminder acquisitions any not

volumes the the incur normal with ramping the up the after at Our first end the of of taxes of and guidance considers payroll the year quarter seasonality holidays higher year. we level beginning expected

trends volume of on impact volumes our reflects variant it and the reflects February. staffing January, guidance the patient costs quarter first the of Omicron in our also in month strong While

business demand favorable by a Our confidence full represents trajectory. growth in and year the strong supported guidance our trends

service is reach to As we growth existing additional patients centered strong across, distinct opportunities all that strategy pathways growth it our for and in that, markets Acadia have we Acadia's will the and around to XXXX provide demand beyond, previously more in support believe our relates new and shared of Acadia's lines.

that First, particular the on can facilities allows expansions to key we the in that improve meet demand of we the profitability. us structure, growth and and represent existing facility margins we facility, driver market, to to believe and growth our investment. best an continue existing leverage a are add When but return beds also which cost

expansions and XXX each to through have XXXX. year this facility We goal through beds add a year,

de to with identify approximately California, XXX XX for important facilities, XX-bed in help markets Chicago, acute has there Acadia along fill XX-bed and record growth We identify these believe novo behavioral and facilities that need An with an to to expect In inpatient Hospital Indio markets to open and locations. accelerate novos are a novos in XXXX. wholly-owned CTC strong CTC de psychiatric de Children's continue to to We projects. opened of underserved XX we since beds. and the inpatient two with XXXX, which include health six success this significant facility for de a add develop opportunities novo Acadia gap. for treatment six objective is

to open after XX For to de CTCs. years to we year inpatient with XXXX, one X novos two per expect along

a leading across to Health are for their country, Services, Behavioral who options proud health treatment strong communities. respective expand work systems we a looking to especially in health help behavioral provider of are As leading the with partner

access not Lutheran Network be new joint Later in might us otherwise expect to relationships For that in the joint community through partners' Fort to established ventures Health provide reputation two and with Wayne open allow our ventures and payers. Health we and leverage in Covenant Acadia, Indiana. these with year, Knoxville, Tennessee, this facilities market available

behavioral through our health XX expect expect and also systems, continue and we access XXX XXXX, commitment In by year. XXXX venture with to beds and facilities, to and partners In four further We and treatment. openings beds quality XXXX, we with de XXXX, CTC accelerate to six we To XXX and two and XXX will who expect ventures existing facilities opening to bed XXXX seek care premier to accelerate novos open joint joint add expand inpatient partnerships additions year. per summarize between to our share between in opening over health and per approximately to JV open additions X,XXX to locations. bed two five

to the visibility our This XX% our and ability allocation We EBITDA that, growth management we our financial are rate enable strong questions. for the the very With we serve patients, operating call for our into the of strength, is and disciplined investment growth, robust our our our us meet to achieve over and we a the the for next several proven supported which services. model, will diversified in open have our next years, that proud to capital Grant, stakeholders. expect strategy, initiatives by the focus our several for demand, industry communities ready our years. business, Through, cost we demand on our deliver greater value are to

Operator

question today with Tanquilut [Operator from go Please first Our Instructions] comes Brian ahead. Jefferies.

Brian Tanquilut

looks question labor what for especially it like to congratulations about and and my morning a concern behavioral first providers. of lot Debbie, the good I Hey, you. you market guys. guess Obviously, for

you could How about So environment about. quarter. Thanks. performance thinking the should mean how going should thinking that? I are good thinking forward? this you're had you margin we just about we be How what seeing? we address be And past Obviously, that? labor if

Debbie Osteen

waves manage of restricting are think a been the done into those we I Well, that than been we good we I with of do challenges time, all labor without December, that the able I I saw fall team throughout we all has think with in manage some a in very our labor of markets demonstrating are in can the early and environment. impacted think job challenges, through think I growth. tight some XXXX dealing And think others. the that then that certainly XXXX. And for we've have more to

the think few of made I a recruiting lot we've centralized a our And done having I of a supports things team made sense think that have those one facilities. and is difference. that

recruiting though very we that they they able mobilize a have that team facility, then have in as to at see real-time needs need successful are we and So we we and employees. in successful what think what even been we were recruit. data retaining recruiting making each with and and know part December a continued the other we sure the to time focus was that done that we've we of absences, team to I on is consistently And but challenging tried Omicron are

we done individual with stay we've that So a that I we've this think year onboard but elements on lot to think retain that are programs about an implemented And staff. safety that us. focused good and past company staff. to do recruit and across that the other and as have and important and the we our ensure to there's environment when things they money our to how those also important, monetary is Certainly, flexibility we also

we we've recruit So we're that it's the can I and through Brian, and see tight right them we already weather to we retain and can optimistic but January process that we any might staff shown that very a think we've that market XXXX, we plan that that have challenges in seen present.

Brian Tanquilut

appreciate to drug about of lot settlement their addiction the those the with settlement or And treatment. dollars on And Debbie, I distributors distributing that. signed for just a opioid the opioid discussion stuff. agreed there's states then

providers just how what of such would you yet that in or So your as hearing terms that from if guys? benefit trickle you're anything state benefit down curious, to

Debbie Osteen

individuals. settled. last we've them that been I week pleased there have we we Yes. involved over a and have knows situation this to actually talking our in are of prior we important. crisis been with did everyone the states. mean, even get XXX,XXX And as And were settlement what's to And to deaths see about been

allowed that certain, expanding But also development, have treatment so are for we other we're that care opioid And our for used effective be few do they outcomes we things the that ways deliver that workforce tracking are within that things to demonstrate patients. think that focused and states is what the things which in going on can Each and do offer process. to in coverage be is service be preventative is I expansion, settlement. a to funds and there positive. these state it are to other and to is think state I freedom. we is what So the used other stipulated can't with

is engaged. active voice talking very been are gets doing sure And state decisions we're lobbies in then our officials so division how distributed. in is the leaders also that money what CTC have the and our making just make heard, with will our others And about

Brian Tanquilut

Thank guys. you Awesome.

Debbie Osteen

you Thank

Operator

Our next question go comes A.J. with from Credit ahead. Rice Please Suisse.

A.J. Rice

get you're everybody. We best beds a doing wishes JVs. that say of Hi addition And a that Debbie. development in again, two activity row. calls There's to to lot new

it You've on through. take contribution Maybe all the or margin, those us in cost take factored What long that confirm if How you into got you to expansions. is guidance the you have could remind you've I'll just CTC us different of you but those? the just that last mature that -- XXXX on outlook get a to that reflected I'm And does assuming to avenues Can ask night. for start-up growth? your development is walk offered typically?

David Duckworth

four, we in XXXX. this our facilities guidance $XX XXXX. over we start-up increase does to which of some We for that A.J. XXXX's growth further there of openings assume million $XX that are million our those opened into in to going yes, accelerate in new range year start-up is expect a XXXX losses incurred over factored in and which losses some what

be third first of at of venture relationships faster with sources and do as venture somewhat ramp-up joint for company facility, a payers at look with a given in through level our be head of at joint the set new that project, community Our year. Many have their is around will we breakeven margins referral that that times the our operations that in we will do goal with location. a partner and start end we year the it by facilities

breakeven of have new another. loss seen wholly-owned guidance. first year goal our in first to year. joint inpatient vary this is that than million $XX factored between the facility ventures end the into But a So like we for that that by to faster that all in they can is those of million ramp Losses expect novo. would some said million But facilities year be some one from de is in $X.X to -- $XX $X for our that And per I million. that we facility general

Debbie Osteen

have and making we goes is very just very in have of a think have that we that detail as just They And to They that David try leverage get before the we a And as in that looking as help staff breakeven. does they very open job facility. that A.J. I'd we partner, joint done just good as we're I of relationship at team period JVs, before, open well engaged the the with sure beds found say, reaching reduce often that all a we prepared our in and think, start-up it into I said will time. venture physicians. putting minimize the are

that you at getting are facility to when open and favorable So is point where getting just breakeven. a at a we look

A.J. Rice

maybe my follow-up just And question. Okay.

You pricing. It seeing could I talk can had partly absolute year-to-year day. mix. patient what per partly X.X% revenue pricing about up be Can know be quarter on there? just maybe that strong this patient you're you

Debbie Osteen

about very strong reimbursement, as our we we've Well, some we been rate had in have increases fortunate, think because XXXX.

for services. they're Our the services supporting recognizing and need our payers are the and us

a growth. of have per larger payer if revenue greater Those portion our recovered commercial they at be early by areas. we've both covered our a patients see look the they also of we day. -- seen more service we acute of payers. and facilities mix, tend volume And our it patients specialized more are We which The to We is mix represented have have commercial XXXX. as in facilities. is to specialty do as -- specialty strong We demand component in and those higher a have traveling

revenue and some role in requires net just services. and opening specialty again that more well become rates recognize payers to give intensity specialized also we our staff And within as with new a our more the programs played of has specialty strong been even those they've willing programs our for as higher hospitals. that So, that

A.J. Rice

so Okay, great. Thanks much.

Debbie Osteen

A.J. you, Thank

Operator

Kevin Our Fischbeck with Bank question of next Please comes America. from ahead. go

Kevin Fischbeck

Maybe last clarify How growth that that to because in does revenue higher day? kind day the a Is separately attached revenue revenue to metric? question just revenue All it, from comes that there. broken without day CTC of to out in impact contributing the a Great. right. per per or is that that

David Duckworth

Kevin that our have whether line that growth that in it since is our CTC of revenue other lines, much does division's we've service Yes. in stat. revenue it's And growth really volume impact day our doesn't with rate with pricing is the seen division the is within could any rate or we per impact since on in have on impact it service currently. significantly an it's above lines an does other if their pretty different not is line service Where lines. impact below metric. see metric a But much the growth or what significant other

Kevin Fischbeck

rate you So, representation that per actual day. good as view of a

David Duckworth

mentioned Yes, factors that course the around the rate mix, payer along then and Debbie service increases. of payer with mix,

Kevin Fischbeck

looking to is just construction you're Okay. question a but up I guys going again this that the this year then you year announced other guidance CapEx lot accelerate that forward. have is And of

to some would big able to couple or spending free years Do of finance the flow, you through next of have that understand. you're Just in to I growth to money over sure be years? you fully believe that cash CapEx make fund to ads going to couple that embedded the potentially want expecting next guys borrow the you're

David Duckworth

Yes.

for increase right the And -- should even those greater able see flows. that would to excess as even to cash the currently some out cash that with those looking in past. fund into free up capacity in years, we'll debt should done that fully to we investments. years be we the outlook is continue over course, flows CapEx believe to projects. guidance not then with expect we next in opportunities our Our CapEx where be grow a And years those be as there do occurring next able fund an now free CapEx those expansion the CapEx flow couple funded step of that the outer we've with But in we in we cash for expansion as have use of XXXX be

Kevin Fischbeck

right, Thank excellent. you. All

David Duckworth

Thanks Kevin.

Operator

with Our question SVB Please go ahead. comes Whit from next Leerink. Mayo

Whit Mayo

Hey thanks.

here. to couple releases some development topic that equation has know demand changed. think the and of velocity are or side mean certainly the industry second. for number press a you've just but the of Just out on I you really a Maybe the don't has of the the activity the us or I we're finger resources level changed this I has changed added that coming from driving you think that don't of point to? of But if impact that's your know that observations two making of put what one internally on engagement we activity know here sort an I or is having Debbie. like I just key influence. don't if you today increased would had to kind

Debbie Osteen

the our markets think a a we're that think We Well, we they I there's in see that it's And I operations. that that in. existing occupancy certainly bed were to out and pretty that's that's brought think from the see the patients see demand beds case additional to team I And facility. our that the they ability demand our do add such strong expansions. strong. is at And

and systems to JVs, which the they a did issues three with have and substances key in people are our And long. for quarter solution think six So, best health in looking the health announce are to fourth where we added staying respect we return. that mental factor. a That's XXXX. that's partners the issues the ERs and too I do

talk been area. And we're driver. job, and stands great visit that have think a at brought partnerships, done to other all record. potential track a that of doing our they And in so I partners very Acadia strong our our communicating look really partners. they a in and I team And what that's has in itself. It for

really So key is I there out of a demand factor, it's help. and just a that now do greater that's but a acceptance right with think just around seeking

of bed partnerships we end there then, the to So but patients. are these novos see itself able it's manifesting to where as de at were complete transaction also treat the And in we expansions, our these enough our not now all beds several now Missouri, are beds this. well as know as there that out other providers of for December gone the we are through right we It's faring -- think there on all for not in that years.

with. a there's the think think of do is with we our this has we lot have fact there I to And low. leverage opportunity So -- that,

the thinking fortunate part have really it all use And capacity diversification. and the about of with we're our it we what grow. We're also we But it have best capital? demand across the factor because but should leverage are of in that on then Where opportunities the our of is now, is ability the this to services. now be execute have that We every our strategically that's out where to US.

Whit Mayo

over the expectation just of grow the your some numbers we EBITDA synergy numbers idea have in to around year you But Maybe are I potentially follow-up. think don't and domain. really, mean, I'm this any for that specifically I heard around CenterPointe. opportunities. an how I looking you helpful. just public That's give as some could and and that see think initiatives the contribution there I you time, implement

David Duckworth

the margin We transaction us and in those we're we and and those an opportunities improvement for of of to and that will below acquisition new throughout revenue beds that it December processes initiatives those we their continuing acquisition Whit, what that first average for and margins their that at with -- historically, we what Acadia, see the account that having really to we terms for beyond in growth But margins. there enhance and bring around and facilities platforms in integrate over on on well part And in facilities, tie guidance the expect We It those those are say the a existing the facilities of the in growth just XX. met our Acadia we I'll facilities place do should is for does believe the then Acadia think do improvement, and facilities. bring for is other facilities have growth. implement are looking our what about year excited it's into as doing the does X% lot projects profile our closed with growth we improve can margin. year into of

Whit Mayo

all Well, question one what half expect earlier can of of it to just of million said think year? losses. you let to think $XX CenterPointe, be I Is startup mean, me $XX absorb trying the I David this that that possible through maybe just that impact there. ask will million follow-up overall

David Duckworth

Yes. Yes, Whit.

to million somewhere they of to in the acquired closer run look our at looking in could the as And range million think I about $XX we acquisition. do that to we in back the business, range million. of $XX as the of they a exiting is we the be year be think kind think would of XXXX, historically rate the should year, at EBITDA the expectation end more that one where year, grow $XX million $XX so by

Debbie Osteen

like pro And was I plans, started had of that concrete do plans always happening. actually but which forma think, we Whit, might had on those was they not It a CenterPointe, very executing happen, to with see. something it and

putting outpatient very going motivated team have opportunities in into place. bed those expansions our and grow to that's very even to feed is think and we nicely other base They a very continuum. the a programs that So strong

So opportunity where we've about set, of criteria it's that we our all for think one it as M&A. met

Whit Mayo

the Thanks Great. time. for

Operator

comes Bank. Please Chickering Deutsche Pito ahead. with next go from Our question

Pito Chickering

A.J.'s see we'll you Good morning, guess, echo grasp see XQ, maybe I soon for and to questions. I guess, Thanks comment, taking steady, we'll what I guys. Hey. my happens.

Going back and on your to labor, Brian's question difference between pretty substantial. your peers is results

And us the XQ, how what percent think due versus of, And and also you versus of, sort retention couple third how in Can any was a you XXXX. could your XXXX? we quantify to So they in fourth quarter? fourth should of about track how it refresh on staff in in you you contract hired that quarter quarter be quantify Can labor questions. fourth quarter versus that quick in overtime? can acquisitions

David Duckworth

retention a have level wage been new that our was do by do been There with that's if markets, we been vary the not our use We quarter time, at labor I we've of XXXX, more X% we pay has that where that's Pito, pay of It job especially, X about premium hire including also temporarily, percentage consistent. retention that our agency our because earlier year. agency like sometimes through But components metrics. very pandemic. looked metrics, overall just our our labor the does been And around see I pay retention and related pay of the has the certain trended but labor the rates. a premium the we've have at stable. and cost we labor do of X% are that consistent as to stable labor fourth source in last different. very labor. by had the fourth of to times time very to Over another markets in along sick has are our with quarter stable that With base It's also respect in It's premium gone throughout labor, still category market, the but year. there's higher of premium labor consistent. just

see great So and our that we and to we premium job volume do finding labor level, to been our stable. support component just the continue has across the a a local staff markets of demand at the

Pito Chickering

question. follow-up a then And Okay.

generally the to commercial prior payers pandemic, as managed COVID. stay aggressively During they on did to as

sort commercial versus today what managing payers behavior seeing XXXX. stay, like curious from of, a you're Just

per in sort revenue as price to that day you in guess, question, a increases pricing at much. And so was on it of fit commercial where follow-up where I XXXX, as look relative does Thanks the XXXX?

Debbie Osteen

really is relaxed. that for we did We have our we that a be. might services, service showing a Pito, commercial not to whatever And in of the behavior see payers. follow a need from our didn't there certainly really process change big see that

nine length acute been our for line, fact In around service fairly stay our has been of days. it's stable

And diligently to service the I sure that's in in make work I think setting high-quality payers. happens. think collaboration right our we that, interested very that so work in done we They're and with

services see So the requirements. to Medical during they big at across level important necessity at still our with a our the have them. that. pullback is think time, to we teams little didn't relax that time facility from our payers, And and pandemic, where still least, our our overall, it's good a pretty of we in show job see more we, are bit out among stable. facilities. to place. will acuity been a that's And they've I -- And done clinicians But,

Pito Chickering

increases Can in And XXXX. the help us? you then versus so day quantify per Thanks much. that for XXXX rate just commercial

David Duckworth

good with our We payers, continue relationships. maintain Pito to closely commercial work

depending Many importance As services And the discussion factors you we has changed that and the average which to in as payers relationship really we've on be about say of average, are And regarding pricing rate what we different the think increases think and more But pricing we seen in markets care on our And that number we the the across just quality the depends those historically, course, I than the with the know, increases of our in-network, increase is, payers, long-standing But commercial years our could payers was that. of market, payer, and factors. across consistent may expectations we've an it most value, ago. the depend X% level. really would a programs. it that couple had. services would of on realize not provide a X% the past we on the average that seen. provide the have of be what on of

Pito Chickering

much so guys. Thanks, Great.

Operator

ahead. go from Mok Andrew comes question next Our with UBS. Please

Andrew Mok

Hi, good morning.

different of us And labor, you help that couple driving labor the a questions. can are inpatient On settings? you and what's pressure labor and pressures setting between understand specialty difference? follow-up which Just seeing

David Duckworth

And not that Yes of and to has diversification acute we Andrew, but nurses than from in course, just components the have have we perspective. we service our our the in and do do may We staffing specialty. where geographic all different -- that counselors labor can the of may a behavioral, percentage have of us another, look also We one believe helped look we a wage services those environment, be navigate it labor diversified we as depend service service line only -- does greater different on line, have compared therapists ability our specialty, to to service in. from of percentage a for greater lines but we the the geographic But difficult a in -- to inflation think our line wouldn't we service reflect for it markets necessarily market. helped lines and metric us or do geographic has have, the we to back on we a in we're give acute. have as because and diversification, that the total,

Andrew Mok

would out? follow And quarter. from supplemental [indiscernible] just on you of then a sort benefit payments any that the quick call Was there state

David Duckworth

Yes.

the annual did did we of and have to and full the state about benefit finalized and fourth sort that our in and benefit the in of program state program record this program new Florida, a was was new in numbers of directed one We a that million -- approved the was company. net quarter $X payments that have we program implemented that

programs the trends that lot one we related program a of that something quarter the was to that, to did quite And in other strong seen, Other did that, first one that and implemented and way and program us. we some for we've to And incremental the we fourth that $X Florida XXXX, continue year into in be day the was the participate record is that provide revenue quarter, So across that time. have time. of any guidance many strong the than does a those quarter this supplemental effective for the around for million in addition per year in program. did states likelihood have we in can our it in some here will pricing should first XXXX. next for reflect been not benefit that fourth we

Andrew Mok

Got it. color. for the Thanks

David Duckworth

Andrew. Thanks,

Debbie Osteen

you. Thank

Operator

with ahead. Our next go from question will come BMO. Borsch Please Matthew

Matthew Borsch

any for forecast your it? forecast talk long-term could you hoping opioid I how the on at, in look maybe sign Yes. sources – just you're the as mean do you abatement treatment. about that I'm of about at just look based you thinking do see that you you

Debbie Osteen

we pandemic it's before. of the in opioids, there many demand it crisis that what's right additional as as prevalence worse Well, need them, using think our than that made now and for at just and a those And we look services. I the with still was of about states we're think think is the even and real clinics happened we

are that the same at trends individuals seeing seeking very reimbursement. opioid are also We favorable I we're seeing time some in treatment. And think

states XXXX. became the opioid of the in part then October opioid So And cover effective of Medicare for XXXX, treatment. first in treatment Medicaid mandated to

coming in worsening of you of about caused but it that the worse When we in deaths XX%. And deaths there's an – added the – need some continuing. we really XX about do these overdose over see I because the services. even it's is epidemic, – was. we XXXX for think thinking we're and more treatment a there gotten it's So crisis also of has XXX,XXX than think this clinics also increase And fentanyl that is it's the big in think still the now

that across we and is year. add demand services. to we We a are look think I every our stage, service there believe robust we provide individuals which opportunities very our As growing offering, have

when that And – clinics have We team continue look strong provider. abating. have a they involved less And very do capital and there. as we and experience. We're ahead we we add we see to will of largest don't lot we we the so so, have a do

this as to as a at it states. that continue put careful in to line. the we position level. we is worse to pretty overall and clinics is add happening about that we'll service good where But We're getting some There state add not reimburses that think we're So and see variation. opportunity we crisis a our every same in good

Matthew Borsch

talked similar the new generalize And about maybe new can your and them? long-term at how XXX characterizes you markets note what if planning screen just you as you all understood on on a I comment, the about markets,

Debbie Osteen

we markets XXX at Well there de are as look and novo yes, we believe that builds are underbedded.

a factors a we work sure look criteria it staff to enter availability. present. have at and very look clear We And we it's that of market a other of for. make We lot what do but market that we that can We make some want have sure underbedded is We yes, at costs. has certainly look reimbursement. that are also to front-end construction

a bed differ cost to build. in states what Some

So bed, usually, if to it more costs fortunately, stronger. build a is reimbursement the

contemplated. So that is all of

process robust very I sense. We the most it's that very makes where – around a building and of have a think now we're just what

get the are would because what how hospital operations the us we the on place. couple suggest making of that engaged team we We – very process. not and we ahead steps there a build of are going where novos, in you of de weeks our we but a are to number that to But identified are a that's markets on grow strong steps is So XXX that those can that we've take are in have just that opportunity real to every meet a based markets for think on we on sure there and process the demand. build when in involved side

Matthew Borsch

congratulations. All and you right. Thank

Debbie Osteen

you. Thank

Operator

Our last Sarah go question today comes from James Barclays. Please with ahead.

Sarah James

improvement market in in. you're little availability half? you Thanks any Hi. of bit viewing a in or labor assuming squeezing how for about, for the seasonality you me Can second labor talk year? of Are sort this the

David Duckworth

payroll quarter is number the the We Sarah, Omicron return from year past And first of very holidays greater then, into the trends cases January, the in around strong and we've really factored seen variant. a which seasonality this our to taxes. for we in mentioned course typical some seen February. the what of that we've in

in see think seasonality, So, QX are fourth very But quarter some factored guidance. year. the a of quarter seasonality end our QX We holidays. the Outside and the not we of our around do first later in is year the that into just that, similar. we of do lot see

premium our labor we've COVID half moderation other to that of are some could of see the it seen think especially correlated than the we are the through second year. a that get which do we the that other to stable will we As that of around minds in pay environment be that we pay, some lot labor things think very in throughout But the labor, closely continue, in replacing pretty just some out. the environment year. year, Maybe relates and and cases moderation employees now the premium will

Sarah James

growth. any give color guys what earlier in cost-saving the little for the XXXX And that if reflected you of XX% And initiatives opportunity Can those on that driving is are? Great. you a flagged us numbers? long-term

David Duckworth

we targets, our years our some purchasing most established those $XX X.X identified at facility, Well, and place new guess, has to team early savings that manage procurement programs sustaining corporate team a we job done that a an really in I XXXX. having of savings by level. million And ago outstanding facility realized of a cost and a corporate, lot and

margin improvement, guidance improvement of also, our just for of but course our reflected volume our from that And cost have the around there's reflect from new but words, around according So and group, operations into group. we growth, to relating team do those identify. an same to target, not basis volumes we way directly facility embedded savings that's what factored points the our the become operations, have a approach ongoing externally savings guidance. focus did is in really other we that it's really set other In been manage sustained. focus margin management. patient that an see. in XX some our cost And efficiencies in way efficiencies of can ongoing the we we None We on XXXX does that

Debbie Osteen

We real good just a And can add and and things and a we these couple that put that see a years issues has advantage disciplined around they with some company. other framework have facilities David the of I gone up size groups it We think, framework. experience utilizing with of taking pricing And comes as and the a that And of and resource pretty in place number we're Sarah, dramatically. the good inflationary we food the changed in of our scale ago. of facilities I'll said. to purchasing what the

are our big – and to we're we really use other another ways our various as on make regularly we're advantage meet So and that contractors to take we that's area and we want we of which vendors. other our identifying with because contracting size in and operator that, a is to that, scale pricing, sure deal

Sarah James

Congratulations again, Debbie.

Debbie Osteen

Thank you.

Operator

our closing turn concludes session. this Osteen to question-and-answer Debbie for remarks. I gentlemen, and like would over back conference to any Ladies the

Debbie Osteen

efforts proud stay we December of a our would for gain of Before This career the XXXX. my the end the helped opportunity like that, hope has I'm need who clinicians, call, of and more patients since we've truly and on recovery physicians healing. has towards highest I been path Acadia and the accomplished team, and what and highlight of the me. in in play a I my staff, to nurses, privilege have mental than say it part health XX,XXX to in been great extraordinary joined

the implementing have Board. today, day I I've the our growth improving every being from stand-alone your with of our continue remarkable my is three us that, look company and is commitment last role the been to well the on dedicated years, Over employees, in under lives. Acadia largest and Thanks trying rewarded circumstances. witnessed our strategy, again all saving for interest knowing health continuing work I Acadia our solidifying for executing Healthcare. the to Acadia's position positioned and pathways, most as in behavioral care and forward US. the

do us additional directly. not have you hesitate If good day. questions contact please to today, Have a

Operator

now concluded. for today's you presentation. has attending conference The Thank

You may now disconnect.

Acadia Healthcare (ACHC) 1 Mar 222021 Q4 Earnings call transcript