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Acadia Healthcare (ACHC) Q4 Earnings Beat on Strong Admissions
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Acadia Healthcare Company, Inc. (ACHC - Free Report) reported fourth-quarter 2023 adjusted earnings of 85 cents per share, which beat the Zacks Consensus Estimate by 6.3%. The bottom line improved 21.4% year over year.
Total revenues amounted to $742.8 million, which advanced 10% year over year. The top line outpaced the consensus mark by 1.9%.
The quarterly results benefited on the back of improved patient volumes and expansion initiatives. Solid demand for behavioral health and substance use treatment led to the increased utilization of ACHC’s healthcare services. However, the upside was partly offset by an elevated expense level.
Acadia Healthcare Company, Inc. Price, Consensus and EPS Surprise
Same-facility revenues rose 10.3% year over year to $736.2 million in the quarter under review, which came higher than the Zacks Consensus Estimate of $711 million and our estimate of $710.7 million. The increase came on the back of 7.1% rise in revenue per patient day and a 2.9% improvement in patient days. Admissions inched up 1.5% year over year but fell short of our growth estimate of 3.3%. The average length of stay grew 1.4% year over year in the fourth quarter, higher than our growth estimate of 0.6%.
In the overall facility, patient days and admissions increased 2.8% and 2%, respectively, on a year-over-year basis. Revenue per patient day improved 7% year over year, higher than our growth estimate of 5.6%. Average length of stay inched up 0.8% year over year.
Adjusted EBITDA, excluding income from the Provider Relief Fund (“PRF”), advanced 16.4% year over year to $169.6 million, higher than our estimate of $165.1 million. Adjusted EBITDA margin, excluding income from the PRF, of 27.5% improved 150 basis points year over year.
Total expenses escalated 12.9% year over year to $662.8 million due to increase in salaries, wages and benefits, professional fees, other operating expense, and transaction, legal and other costs. The metric also came higher than our estimate of $625.2 million.
Financial Update (As of Dec 31, 2023)
Acadia Healthcare exited the fourth quarter with cash and cash equivalents of $100.1 million, which rose 2.5% from the 2022-end level. It had a leftover capacity of $516.5 million under its $600 million revolving credit facility at the fourth-quarter end.
Total assets of $5.4 billion increased 7.4% from the figure at 2022 end.
Long-term debt amounted to $1.3 billion, which decreased 1.6% from the figure as of Dec 31, 2022. The current portion of long-term debt amounted to $29.2 million.
Total equity of $2.8 billion dipped 1.1% from the 2022-end level. The net leverage ratio was around 1.9X at the fourth-quarter end.
ACHC generated net cash from operations of $462.3 million in 2023, which climbed 21.5% from the 2022 figure.
Business Update
Acadia Healthcare added 98 beds to its existing facilities in the quarter under review. It also inaugurated two comprehensive treatment centers (CTCs). The company added 13 outpatient programs. The renovated adult hospital and outpatient facility comprising 101 beds and a part of the Illinois-based Montrose Behavioral Health Hospital was inaugurated by ACHC in the fourth quarter.
Additionally, it completed the Turning Point Centers buyout on Feb 22, 2024. The acquired company is a specialty provider of substance use disorder and primary mental health treatment services that caters to the Salt Lake City of UT.
1Q24 Outlook
Revenues are forecast to be $775-$785 million. Adjusted EBITDA is anticipated between $170 million and $175 million. Adjusted earnings per share (EPS) are estimated between 78 cents and 83 cents.
2024 Guidance
Revenues are projected between $3.18 billion and $3.25 billion, the mid-point of which indicates an improvement of 9.7% from the 2023 reported figure of $2.9 billion.
Adjusted EBITDA is expected to be $730-$770 million, the mid-point of which suggests 10.7% growth from the 2023 reported figure of $677.7 million.
Adjusted EPS is forecast between $3.40 and $3.70 in 2024, the mid-point of which implies a rise of 3.2% from the 2023 figure of $3.44.
Interest expenses are estimated within $110-$120 million. Depreciation and amortization expenses are anticipated in the $150-$160 million band. The tax rate is expected within 24.5-25.5%. Stock compensation expenses are projected to lie between $40 million and $45 million.
Operating cash flows are forecast to be $525-$575 million for 2024. Expansion capital expenditure is anticipated between $425 million and $475 million. Maintenance and IT capital expenditure is expected to be $90-$110 million.
ACHC anticipates to add more than 400 beds to existing facilities in 2024. It targets to inaugurate a maximum of 14 CTCs this year. It also aims to open three joint venture facilities in Texas, Colorado and Michigan in 2024.
Zacks Rank
Acadia Healthcare currently has a Zacks Rank #4 (Sell).
Of the Medical sector players that have reported fourth-quarter 2023 results so far, the bottom-line results of Select Medical Holdings Corporation (SEM - Free Report) , Lantheus Holdings, Inc. (LNTH - Free Report) and Encompass Health Corporation (EHC - Free Report) beat the Zacks Consensus Estimate.
Select Medical reported fourth-quarter 2023 adjusted earnings of 36 cents per share, which surpassed the Zacks Consensus Estimate by 16.1%. The bottom line soared 63.6% year over year. Net operating revenues amounted to $1.7 billion, which advanced 4.9% year over year. The metric beat the consensus mark by 3%. Adjusted EBITDA of $180.1 million rose 20.9% year over year. Revenues of the Critical Illness Recovery Hospital segment amounted to $567.1 million in the fourth quarter, which inched up 0.9% year over year.
The Rehabilitation Hospital segment’s revenues improved 9.4% year over year to $260.2 million in the quarter under review. Year-over-year increases of 8.9% and 6.6%, respectively, in admissions and patient days contributed to the strong performance of the unit. Revenues amounted to $298.2 million in the Outpatient Rehabilitation segment, which grew 6.1% year over year in the fourth quarter The improvement can be attributed to an 11% rise in patient visits, partially offset by a 2% decline in revenue per visit.
Lantheus delivered adjusted EPS of $1.75 in the fourth quarter of 2023, up 27.7% year over year. The figure topped the Zacks Consensus Estimate by 18.2%. LNTH registered revenues of $353.9 million in the fourth quarter, up 34.5% year over year. The figure topped the consensus estimate by 1%. For the quarter under review, Precision Diagnostics reported revenues of $100.6 million, up 6.6% from the year-ago quarter. Revenues in the Radiopharmaceutical Oncology segment totaled $230.6 million, up 42.8% year over year.
Strategic partnerships and other revenues were $22.8 million, up 214.9% from the year-ago quarter. In the quarter under review, gross profit increased 37.5% to $229.9 million. The gross margin expanded 141 basis points to 64.9%. Total operating profit totaled $137.5 million against the year-ago quarter’s operating loss of $171.7 million.
Encompass Health reported fourth-quarter 2023 adjusted EPS of 95 cents, which outpaced the Zacks Consensus Estimate by 14.5%. The bottom line rose 8% year over year. Net operating revenues amounted to $1.2 billion, which advanced 9.6% year over year in the quarter under review. The top line beat the consensus mark by a whisker. EHC’s net patient revenue per discharge inched up 0.9% year over year in the fourth quarter. Total discharges of 59.2 million improved 8.3% year over year.
Net and comprehensive income of $119.1 million grew 1.4% year over year in the quarter under review. Adjusted EBITDA advanced 9.6% year over year to $255 million. It added five beds to its existing hospitals in the quarter under review.
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Acadia Healthcare (ACHC) Q4 Earnings Beat on Strong Admissions
Acadia Healthcare Company, Inc. (ACHC - Free Report) reported fourth-quarter 2023 adjusted earnings of 85 cents per share, which beat the Zacks Consensus Estimate by 6.3%. The bottom line improved 21.4% year over year.
Total revenues amounted to $742.8 million, which advanced 10% year over year. The top line outpaced the consensus mark by 1.9%.
The quarterly results benefited on the back of improved patient volumes and expansion initiatives. Solid demand for behavioral health and substance use treatment led to the increased utilization of ACHC’s healthcare services. However, the upside was partly offset by an elevated expense level.
Acadia Healthcare Company, Inc. Price, Consensus and EPS Surprise
Acadia Healthcare Company, Inc. price-consensus-eps-surprise-chart | Acadia Healthcare Company, Inc. Quote
Q4 Operations
Same-facility revenues rose 10.3% year over year to $736.2 million in the quarter under review, which came higher than the Zacks Consensus Estimate of $711 million and our estimate of $710.7 million. The increase came on the back of 7.1% rise in revenue per patient day and a 2.9% improvement in patient days. Admissions inched up 1.5% year over year but fell short of our growth estimate of 3.3%. The average length of stay grew 1.4% year over year in the fourth quarter, higher than our growth estimate of 0.6%.
In the overall facility, patient days and admissions increased 2.8% and 2%, respectively, on a year-over-year basis. Revenue per patient day improved 7% year over year, higher than our growth estimate of 5.6%. Average length of stay inched up 0.8% year over year.
Adjusted EBITDA, excluding income from the Provider Relief Fund (“PRF”), advanced 16.4% year over year to $169.6 million, higher than our estimate of $165.1 million. Adjusted EBITDA margin, excluding income from the PRF, of 27.5% improved 150 basis points year over year.
Total expenses escalated 12.9% year over year to $662.8 million due to increase in salaries, wages and benefits, professional fees, other operating expense, and transaction, legal and other costs. The metric also came higher than our estimate of $625.2 million.
Financial Update (As of Dec 31, 2023)
Acadia Healthcare exited the fourth quarter with cash and cash equivalents of $100.1 million, which rose 2.5% from the 2022-end level. It had a leftover capacity of $516.5 million under its $600 million revolving credit facility at the fourth-quarter end.
Total assets of $5.4 billion increased 7.4% from the figure at 2022 end.
Long-term debt amounted to $1.3 billion, which decreased 1.6% from the figure as of Dec 31, 2022. The current portion of long-term debt amounted to $29.2 million.
Total equity of $2.8 billion dipped 1.1% from the 2022-end level. The net leverage ratio was around 1.9X at the fourth-quarter end.
ACHC generated net cash from operations of $462.3 million in 2023, which climbed 21.5% from the 2022 figure.
Business Update
Acadia Healthcare added 98 beds to its existing facilities in the quarter under review. It also inaugurated two comprehensive treatment centers (CTCs). The company added 13 outpatient programs. The renovated adult hospital and outpatient facility comprising 101 beds and a part of the Illinois-based Montrose Behavioral Health Hospital was inaugurated by ACHC in the fourth quarter.
Additionally, it completed the Turning Point Centers buyout on Feb 22, 2024. The acquired company is a specialty provider of substance use disorder and primary mental health treatment services that caters to the Salt Lake City of UT.
1Q24 Outlook
Revenues are forecast to be $775-$785 million. Adjusted EBITDA is anticipated between $170 million and $175 million. Adjusted earnings per share (EPS) are estimated between 78 cents and 83 cents.
2024 Guidance
Revenues are projected between $3.18 billion and $3.25 billion, the mid-point of which indicates an improvement of 9.7% from the 2023 reported figure of $2.9 billion.
Adjusted EBITDA is expected to be $730-$770 million, the mid-point of which suggests 10.7% growth from the 2023 reported figure of $677.7 million.
Adjusted EPS is forecast between $3.40 and $3.70 in 2024, the mid-point of which implies a rise of 3.2% from the 2023 figure of $3.44.
Interest expenses are estimated within $110-$120 million. Depreciation and amortization expenses are anticipated in the $150-$160 million band. The tax rate is expected within 24.5-25.5%. Stock compensation expenses are projected to lie between $40 million and $45 million.
Operating cash flows are forecast to be $525-$575 million for 2024. Expansion capital expenditure is anticipated between $425 million and $475 million. Maintenance and IT capital expenditure is expected to be $90-$110 million.
ACHC anticipates to add more than 400 beds to existing facilities in 2024. It targets to inaugurate a maximum of 14 CTCs this year. It also aims to open three joint venture facilities in Texas, Colorado and Michigan in 2024.
Zacks Rank
Acadia Healthcare currently has a Zacks Rank #4 (Sell).
You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Other Medical Sector Releases
Of the Medical sector players that have reported fourth-quarter 2023 results so far, the bottom-line results of Select Medical Holdings Corporation (SEM - Free Report) , Lantheus Holdings, Inc. (LNTH - Free Report) and Encompass Health Corporation (EHC - Free Report) beat the Zacks Consensus Estimate.
Select Medical reported fourth-quarter 2023 adjusted earnings of 36 cents per share, which surpassed the Zacks Consensus Estimate by 16.1%. The bottom line soared 63.6% year over year. Net operating revenues amounted to $1.7 billion, which advanced 4.9% year over year. The metric beat the consensus mark by 3%. Adjusted EBITDA of $180.1 million rose 20.9% year over year. Revenues of the Critical Illness Recovery Hospital segment amounted to $567.1 million in the fourth quarter, which inched up 0.9% year over year.
The Rehabilitation Hospital segment’s revenues improved 9.4% year over year to $260.2 million in the quarter under review. Year-over-year increases of 8.9% and 6.6%, respectively, in admissions and patient days contributed to the strong performance of the unit. Revenues amounted to $298.2 million in the Outpatient Rehabilitation segment, which grew 6.1% year over year in the fourth quarter The improvement can be attributed to an 11% rise in patient visits, partially offset by a 2% decline in revenue per visit.
Lantheus delivered adjusted EPS of $1.75 in the fourth quarter of 2023, up 27.7% year over year. The figure topped the Zacks Consensus Estimate by 18.2%. LNTH registered revenues of $353.9 million in the fourth quarter, up 34.5% year over year. The figure topped the consensus estimate by 1%. For the quarter under review, Precision Diagnostics reported revenues of $100.6 million, up 6.6% from the year-ago quarter. Revenues in the Radiopharmaceutical Oncology segment totaled $230.6 million, up 42.8% year over year.
Strategic partnerships and other revenues were $22.8 million, up 214.9% from the year-ago quarter. In the quarter under review, gross profit increased 37.5% to $229.9 million. The gross margin expanded 141 basis points to 64.9%. Total operating profit totaled $137.5 million against the year-ago quarter’s operating loss of $171.7 million.
Encompass Health reported fourth-quarter 2023 adjusted EPS of 95 cents, which outpaced the Zacks Consensus Estimate by 14.5%. The bottom line rose 8% year over year. Net operating revenues amounted to $1.2 billion, which advanced 9.6% year over year in the quarter under review. The top line beat the consensus mark by a whisker. EHC’s net patient revenue per discharge inched up 0.9% year over year in the fourth quarter. Total discharges of 59.2 million improved 8.3% year over year.
Net and comprehensive income of $119.1 million grew 1.4% year over year in the quarter under review. Adjusted EBITDA advanced 9.6% year over year to $255 million. It added five beds to its existing hospitals in the quarter under review.