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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

FORM 10-Q

 

(Mark One)

QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended June 30, 2022

or

TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

 

For the transition period from                      to                     

Commission File Number: 001-35331

 

Acadia Healthcare Company, Inc.

(Exact name of registrant as specified in its charter)

 

 

 

 

 

Delaware

 

45-2492228

(State or other jurisdiction of

incorporation or organization)

 

(I.R.S. Employer

Identification No.)

6100 Tower Circle, Suite 1000

Franklin, Tennessee 37067

(Address, including zip code, of  principal executive offices)

(615861-6000

(Registrant’s telephone number, including area code)

 

Securities registered pursuant to Section 12(b) of the Act:

Title of each class

 

Trading Symbol(s)

 

Name of each exchange on which registered

Common Stock, $.01 par value

 

ACHC

 

NASDAQ Global Select Market

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.    Yes      No  

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).    Yes      No  

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

 

Large accelerated filer

 

Accelerated filer

  Non-accelerated filer

 

Smaller reporting company

 

Emerging growth company 

 

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.  

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).    Yes      No  

At July 28, 2022, there were 90,841,009 shares of the registrant’s common stock outstanding.

 

 

 


 

 

 

ACADIA HEALTHCARE COMPANY, INC.

QUARTERLY REPORT ON FORM 10-Q

TABLE OF CONTENTS

 

PART I – FINANCIAL INFORMATION

 

 

 

 

Item 1.

  

Financial Statements

1

 

 

 

 

  

Condensed Consolidated Balance Sheets (Unaudited)

1

 

 

 

 

  

Condensed Consolidated Statements of Income (Unaudited)

2

 

 

 

 

  

Condensed Consolidated Statements of Comprehensive Income (Unaudited)

3

 

 

 

 

  

Condensed Consolidated Statements of Equity (Unaudited)

4

 

 

 

 

  

Condensed Consolidated Statements of Cash Flows (Unaudited)

5

 

 

 

 

  

Notes to Condensed Consolidated Financial Statements (Unaudited)

6

 

 

 

Item 2.

  

Management’s Discussion and Analysis of Financial Condition and Results of Operations

22

 

 

 

Item 3.

  

Quantitative and Qualitative Disclosures About Market Risk

34

 

 

 

Item 4.

  

Controls and Procedures

34

 

 

PART II – OTHER INFORMATION

 

 

 

 

Item 1.

  

Legal Proceedings

35

 

 

 

Item 1A.

  

Risk Factors

35

 

 

 

Item 2.

  

Unregistered Sales of Equity Securities and Use of Proceeds

35

 

 

 

Item 6.

  

Exhibits

36

 

 

SIGNATURES

37

 

 

 


 

 

PART I – FINANCIAL INFORMATION

Item 1.

Financial Statements

Acadia Healthcare Company, Inc.

Condensed Consolidated Balance Sheets

(Unaudited)

 

 

 

June 30,

2022

 

 

December 31,

2021

 

 

 

(In thousands, except share and per

share amounts)

 

ASSETS

 

 

 

 

 

 

 

 

Current assets:

 

 

 

 

 

 

 

 

Cash and cash equivalents

 

$

128,368

 

 

$

133,813

 

Accounts receivable, net

 

 

300,313

 

 

 

281,332

 

Other current assets

 

 

89,351

 

 

 

79,886

 

Total current assets

 

 

518,032

 

 

 

495,031

 

Property and equipment, net

 

 

1,857,295

 

 

 

1,771,159

 

Goodwill

 

 

2,205,307

 

 

 

2,199,937

 

Intangible assets, net

 

 

70,214

 

 

 

70,145

 

Deferred tax assets

 

 

3,015

 

 

 

3,080

 

Operating lease right-of-use assets

 

 

137,495

 

 

 

133,761

 

Other assets

 

 

91,281

 

 

 

94,965

 

Total assets

 

$

4,882,639

 

 

$

4,768,078

 

 

 

 

 

 

 

 

 

 

LIABILITIES AND EQUITY

 

 

 

 

 

 

 

 

Current liabilities:

 

 

 

 

 

 

 

 

Current portion of long-term debt

 

$

21,250

 

 

$

18,594

 

Accounts payable

 

 

111,479

 

 

 

98,575

 

Accrued salaries and benefits

 

 

140,528

 

 

 

137,845

 

Current portion of operating lease liabilities

 

 

25,178

 

 

 

23,348

 

Other accrued liabilities

 

 

143,218

 

 

 

126,499

 

Total current liabilities

 

 

441,653

 

 

 

404,861

 

Long-term debt

 

 

1,384,073

 

 

 

1,478,626

 

Deferred tax liabilities

 

 

82,278

 

 

 

74,368

 

Operating lease liabilities

 

 

119,183

 

 

 

116,841

 

Other liabilities

 

 

116,935

 

 

 

110,505

 

Total liabilities

 

 

2,144,122

 

 

 

2,185,201

 

Redeemable noncontrolling interests

 

 

75,475

 

 

 

65,388

 

Equity:

 

 

 

 

 

 

 

 

Preferred stock, $0.01 par value; 10,000,000 shares authorized, no shares issued

 

 

 

 

 

 

Common stock, $0.01 par value; 180,000,000 shares authorized; 89,774,397

   and 89,028,158 issued and outstanding at June 30, 2022 and

   December 31, 2021, respectively

 

 

898

 

 

 

890

 

Additional paid-in capital

 

 

2,640,979

 

 

 

2,636,350

 

Retained earnings (accumulated deficit)

 

 

21,165

 

 

 

(119,751

)

Total equity

 

 

2,663,042

 

 

 

2,517,489

 

Total liabilities and equity

 

$

4,882,639

 

 

$

4,768,078

 

 

See accompanying notes.

1


 

Acadia Healthcare Company, Inc.

Condensed Consolidated Statements of Income

(Unaudited)

 

 

 

Three Months Ended

June 30,

 

 

Six Months Ended

June 30,

 

 

 

2022

 

 

2021

 

 

2022

 

 

2021

 

 

 

(In thousands, except per share amounts)

 

Revenue

 

$

651,719

 

 

$

582,156

 

 

$

1,268,372

 

 

$

1,133,355

 

Salaries, wages and benefits (including equity-based compensation

     expense of $6,580, $9,031, $14,505 and $16,065, respectively)

 

 

339,388

 

 

 

309,233

 

 

 

675,150

 

 

 

613,566

 

Professional fees

 

 

40,440

 

 

 

34,696

 

 

 

77,351

 

 

 

66,313

 

Supplies

 

 

25,022

 

 

 

22,633

 

 

 

48,721

 

 

 

43,955

 

Rents and leases

 

 

11,192

 

 

 

9,620

 

 

 

22,441

 

 

 

19,032

 

Other operating expenses

 

 

84,937

 

 

 

73,751

 

 

 

166,362

 

 

 

145,761

 

Income from provider relief fund

 

 

(8,550

)

 

 

 

 

 

(8,550

)

 

 

 

Depreciation and amortization

 

 

29,128

 

 

 

25,650

 

 

 

58,054

 

 

 

50,544

 

Interest expense, net

 

 

16,565

 

 

 

16,687

 

 

 

32,352

 

 

 

45,714

 

Debt extinguishment costs

 

 

 

 

 

 

 

 

 

 

 

24,650

 

Loss on impairment

 

 

 

 

 

23,214

 

 

 

 

 

 

23,214

 

Transaction-related expenses

 

 

3,940

 

 

 

1,675

 

 

 

7,522

 

 

 

6,285

 

Total expenses

 

 

542,062

 

 

 

517,159

 

 

 

1,079,403

 

 

 

1,039,034

 

Income from continuing operations before income taxes

 

 

109,657

 

 

 

64,997

 

 

 

188,969

 

 

 

94,321

 

Provision for income taxes

 

 

27,725

 

 

 

19,333

 

 

 

45,127

 

 

 

25,537

 

Income from continuing operations

 

 

81,932

 

 

 

45,664

 

 

 

143,842

 

 

 

68,784

 

Loss from discontinued operations, net of taxes

 

 

 

 

 

 

 

 

 

 

 

(12,641

)

Net income

 

 

81,932

 

 

 

45,664

 

 

 

143,842

 

 

 

56,143

 

Net income attributable to noncontrolling interests

 

 

(1,853

)

 

 

(1,150

)

 

 

(2,926

)

 

 

(1,912

)

Net income attributable to Acadia Healthcare Company, Inc.

 

$

80,079

 

 

$

44,514

 

 

$

140,916

 

 

$

54,231

 

Basic earnings per share attributable to Acadia Healthcare

    Company, Inc. stockholders:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Income from continuing operations attributable to Acadia

    Healthcare Company, Inc.

 

$

0.89

 

 

$

0.50

 

 

$

1.57

 

 

$

0.76

 

Loss from discontinued operations

 

 

 

 

 

 

 

 

 

 

 

(0.15

)

Net income attributable to Acadia Healthcare Company, Inc.

 

$

0.89

 

 

$

0.50

 

 

$

1.57

 

 

$

0.61

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Diluted earnings per share attributable to Acadia Healthcare

    Company, Inc. stockholders:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Income from continuing operations attributable to Acadia

    Healthcare Company, Inc.

 

$

0.88

 

 

$

0.49

 

 

$

1.54

 

 

$

0.74

 

Loss from discontinued operations

 

 

 

 

 

 

 

 

 

 

 

(0.14

)

Net income attributable to Acadia Healthcare Company, Inc.

 

$

0.88

 

 

$

0.49

 

 

$

1.54

 

 

$

0.60

 

Weighted-average shares outstanding:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic

 

 

89,724

 

 

 

88,842

 

 

 

89,492

 

 

 

88,543

 

Diluted

 

 

91,473

 

 

 

90,590

 

 

 

91,504

 

 

 

90,381

 

 

See accompanying notes.

2


 

Acadia Healthcare Company, Inc.

Condensed Consolidated Statements of Comprehensive Income

(Unaudited)

 

 

 

Three Months Ended

June 30,

 

 

Six Months Ended

June 30,

 

 

 

2022

 

 

2021

 

 

2022

 

 

2021

 

 

 

(In thousands)

 

Net income

 

$

81,932

 

 

$

45,664

 

 

$

143,842

 

 

$

56,143

 

Other comprehensive income:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Foreign currency translation loss

 

 

 

 

 

 

 

 

 

 

 

(4,260

)

Gain on derivative instruments, net of tax of $0.1 million

 

 

 

 

 

 

 

 

 

 

 

19

 

U.K. Sale

 

 

 

 

 

 

 

 

 

 

 

375,606

 

Other comprehensive income

 

 

 

 

 

 

 

 

 

 

 

371,365

 

Comprehensive income

 

 

81,932

 

 

 

45,664

 

 

 

143,842

 

 

 

427,508

 

Comprehensive income attributable to noncontrolling interests

 

 

(1,853

)

 

 

(1,150

)

 

 

(2,926

)

 

 

(1,912

)

Comprehensive income attributable to Acadia Healthcare

     Company, Inc.

 

$

80,079

 

 

$

44,514

 

 

$

140,916

 

 

$

425,596

 

 

See accompanying notes.

3


 

Acadia Healthcare Company, Inc.

Condensed Consolidated Statements of Equity

(Unaudited)

(In thousands)

 

 

 

Common Stock

 

 

Additional

Paid-in

 

 

Accumulated

Other

Comprehensive

 

 

Retained Earnings (Accumulated

 

 

 

 

 

 

 

Shares

 

 

Amount

 

 

Capital

 

 

Loss

 

 

Deficit)

 

 

Total

 

Balance at December 31, 2020

 

 

88,024

 

 

$

880

 

 

$

2,580,327

 

 

$

(371,365

)

 

$

(310,386

)

 

$

1,899,456

 

Common stock issued under stock incentive plans

 

 

705

 

 

 

7

 

 

 

12,733

 

 

 

 

 

 

 

 

 

12,740

 

Repurchase of shares for payroll tax withholding, net of

   proceeds from stock option exercises

 

 

 

 

 

 

 

 

(4,521

)

 

 

 

 

 

 

 

 

(4,521

)

Equity-based compensation expense

 

 

 

 

 

 

 

 

7,034

 

 

 

 

 

 

 

 

 

7,034

 

Other

 

 

 

 

 

 

 

 

2,208

 

 

 

 

 

 

 

 

 

2,208

 

Other comprehensive income

 

 

 

 

 

 

 

 

 

 

 

371,365

 

 

 

 

 

 

371,365

 

Net income attributable to Acadia Healthcare

   Company, Inc.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

9,717

 

 

 

9,717

 

Balance at March 31, 2021

 

 

88,729

 

 

 

887

 

 

 

2,597,781

 

 

 

 

 

 

(300,669

)

 

 

2,297,999

 

Common stock issued under stock incentive plans

 

 

188

 

 

 

2

 

 

 

5,620

 

 

 

 

 

 

 

 

 

5,622

 

Repurchase of shares for payroll tax withholding, net of

   proceeds from stock option exercises

 

 

 

 

 

 

 

 

(580

)

 

 

 

 

 

 

 

 

(580

)

Equity-based compensation expense

 

 

 

 

 

 

 

 

9,031

 

 

 

 

 

 

 

 

 

9,031

 

Net income attributable to Acadia Healthcare

   Company, Inc.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

44,514

 

 

 

44,514

 

Balance at June 30, 2021

 

 

88,917

 

 

 

889

 

 

 

2,611,852

 

 

 

 

 

 

(256,155

)

 

 

2,356,586

 

Common stock issued under stock incentive plans

 

 

89

 

 

 

1

 

 

 

3,254

 

 

 

 

 

 

 

 

 

3,255

 

Repurchase of shares for payroll tax withholding, net of

   proceeds from stock option exercises

 

 

 

 

 

 

 

 

(444

)

 

 

 

 

 

 

 

 

(444

)

Equity-based compensation expense

 

 

 

 

 

 

 

 

8,923

 

 

 

 

 

 

 

 

 

8,923

 

Net income attributable to Acadia Healthcare

   Company, Inc.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

66,126

 

 

 

66,126

 

Balance at September 30, 2021

 

 

89,006

 

 

 

890

 

 

 

2,623,585

 

 

 

 

 

 

(190,029

)

 

 

2,434,446

 

Common stock issued under stock incentive plans

 

 

22

 

 

 

 

 

 

412

 

 

 

 

 

 

 

 

 

412

 

Repurchase of shares for payroll tax withholding, net of

   proceeds from stock option exercises

 

 

 

 

 

 

 

 

(189

)

 

 

 

 

 

 

 

 

(189

)

Equity-based compensation expense

 

 

 

 

 

 

 

 

12,542

 

 

 

 

 

 

 

 

 

12,542

 

Net income attributable to Acadia Healthcare

   Company, Inc.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

70,278

 

 

 

70,278

 

Balance at December 31, 2021

 

 

89,028

 

 

 

890

 

 

 

2,636,350

 

 

 

 

 

 

(119,751

)

 

 

2,517,489

 

Common stock issued under stock incentive plans

 

 

633

 

 

 

7

 

 

 

3,742

 

 

 

 

 

 

 

 

 

3,749

 

Repurchase of shares for payroll tax withholding, net of

   proceeds from stock option exercises

 

 

 

 

 

 

 

 

(15,490

)

 

 

 

 

 

 

 

 

(15,490

)

Equity-based compensation expense

 

 

 

 

 

 

 

 

7,925

 

 

 

 

 

 

 

 

 

7,925

 

Net income attributable to Acadia Healthcare

   Company, Inc.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

60,837

 

 

 

60,837

 

Balance at March 31, 2022

 

 

89,661

 

 

 

897

 

 

 

2,632,527

 

 

 

 

 

 

(58,914

)

 

 

2,574,510

 

Common stock issued under stock incentive plans

 

 

113

 

 

 

1