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Acadia Healthcare (ACHC) Misses on Q3 Earnings, Trims View

Zacks

Acadia Healthcare Company, Inc. ACHC reported third-quarter 2018 adjusted earnings of 55 cents per share, which missed the Zacks Consensus Estimate by 15%. The bottom line also declined 5.2% year over year.

Earnings missed due to rise in expenses that negatively impacted EBITDA margin.

Quarterly Details

In the reported quarter, revenues rose 6.2% year over year to $760.9 million. However, the top line fell short of the Zacks Consensus Estimate by 0.3%.


Acadia Healthcare Company, Inc. Price, Consensus and EPS Surprise

Total same facility revenues grew 6.2% with a 2.4% increase in patient days and a 3.8% rise in revenues per patient day.

U.S. same facility revenues were up 7.2% year over year to $478.9 million. The company also recorded a 3.3% increase in patient days year over year and 3.8% growth in revenue per patient day.

U.K. same facility revenues rose 4.4% year over year to $245.4 million. The number of patient days inched up 1.3% from the year-earlier period while revenues per patient per day improved 3.1%.

Total same facility EBITDA margin contracted 100 basis points year over year to 23.9%.

Total expenses increased 7.7% year over year to $705.9 million, courtesy of higher salaries, professional fees, supplies, wages and benefits, interest expenses, depreciation and amortization as well as rents and leases.

During the third quarter, Acadia Healthcare added 132 beds to existing facilities, bringing the total up to 806 beds added to new and existing facilities since the end of third-quarter 2017.

Financial Update

Cash and cash equivalents as of Sep 30, 2018 were $48.9 million, down 27.3% from the 2017-end level.

Long-term debt amounted to $3.18 billion as of Sep 30, 2018, up 0.7% from the 2017-end level.

Net cash provided by operating activities at the end of nine months was $286.2 million, up nearly 5.5% year over year.

2018 Guidance Lowered

For 2018, the company expects adjusted earnings per share between $2.25 and $2.27 (down from the previous projection of $2.52-$2.56) on revenues of approximately $3 billion (down from the earlier estimate of $3.02-$3.06 billion). Adjusted EBITDA is anticipated between $605 million and $610 million (compared with the former forecast of $632-$639 million).
Furthermore, the company expects to add more than 800 beds to existing and new facilities in 2018.

Business Update

Following the end of the third quarter, Acadia Healthcare signed definitive agreements for two acquisitions – Mission Treatment and The Whittier Pavilion.

Zacks Rank and Other Releases

Acadia Healthcare has a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Among other firms in the hospital industry, having reported third-quarter earnings so far, the bottom line of LifePoint Health, Inc. LPNT, Universal Health Services, Inc. UHS and HCA Healthcare, Inc. HCA outpaced the respective Zacks Consensus Estimate by 21.7%,11.5%, 11.9%, respectively.

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