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Acadia Healthcare (ACHC) Q1 Earnings Top Estimates, Rise Y/Y

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Acadia Healthcare Company Inc.’s (ACHC - Free Report) first-quarter 2021 earnings of 47 cents per share beat the Zacks Consensus Estimate by 4.44%. The bottom line also surged 12% year over year. Results reflect improvement in the company’s U.S business, which gained from solid volumes as well as a strong cost management.

However, the company’s revenues of $551.2 million (surpassed the company’s guided range of $540-$550 million) beat the Zacks Consensus Estimate by 1.6% and also increased 8.2% year over year.

Consolidated adjusted EBITDA was $119.5 million (surpassed the company’s guided range of $110-$115 million), up 23.8% year over year.

 

The company’s same-facility revenues increased 7.4% year over year including an increase in revenue per patient day of 4.5% and a rise in patient days of 2.7%. Same-facility adjusted EBITDA margin improved 280 basis points to 26.5%.

The company added 92 beds to its operations in the first quarter to meet growing demand for services across the United States.

Total expenses increased 7.7% year over year to $521.9 million due to higher salaries, rent, other operating expenses and debt extinguishment cost.

Financial Update (as of Mar 31, 2021)

Cash and cash equivalents were $178.9 million, down 52% from the level on Dec 31, 2020. Long-term debt was $1.48 billion, down 50% from the figure as of Dec 31, 2020. The company exited the quarter with total assets worth $4.53 billion, down 30% from the level as of Dec 31, 2020.

Cash From Operations

Net cash provided by operating activities during the quarter was $76 million, up 67% year over year.

Guidance

Following a strong first-quarter performance, the company raised its earnings guidance. It now expects revenues in the range of $2.24-$2.29 billion (compared with the earlier estimate of $2.23-$2.28 billion), adjusted EBITDA in the band of $500-$530 million (up from the earlier range of $490-$520 million) and adjusted earnings per share within $2.30-$2.55 (above $2.20-$2.45 estimated earlier). Interest expense of approximately $17 million per quarter is expected for the remainder of 2021.

Business Developments

The company closed the sale of Acadia Healthcare’s business operations in the United Kingdom on Jan 19, 2021.

Following the end of the first quarter, the company completed the construction of a wholly-owned de novo facility Glenwood Behavioral Health Hospital, which is an 80-bed hospital in Cincinnati, OH. This facility will provide inpatient psychiatric treatment for mental health or substance use disorder. It is expected to be fully operational during the second quarter of 2021.

In March, the company announced a joint venture with Lutheran Health Network of Indiana for a new 120-bed behavioral health hub, which is slated to open in spring 2022 and provide a full continuum of inpatient and outpatient care services. It also announced a joint venture with Geisinger Health to build two new 96-bed behavioral health facilities providing comprehensive inpatient services in the Central and Northeastern regions of the state. The first facility is expected to open in 2022 and the second in 2023.

The company also signed a deal to acquire Vallejo Behavioral, a 61-bed psychiatric hospital in Vallejo, CA from Adventist Health. The transaction is expected to be completed this summer.

Zacks Rank and Performance of Other Players

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

Other stocks in the same space like Community Health Systems Inc. (CYH - Free Report) , HCA Healthcare Inc. (HCA - Free Report) and Universal Health Services (UHS - Free Report) beat on earnings in the first quarter by 311.8%, 23.58% and 13.5%, respectively.

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